Thousands of tech forward landlords hold security deposits in a free Baselane banking account.
Limit: In Massachusetts, landlords may collect a tenant security deposit equal to no more than one month’s rent. Collecting more than one month’s rent as a tenant deposit is prohibited under state law. The total amount must be clearly stated in the lease agreement, and landlords are required to hold the funds in a proper security deposit bank account in Massachusetts to comply with state regulations.
Return Deadline: The landlord must return the tenant security deposit, along with any accrued interest, within 30 days after the tenancy ends and the tenant vacates the property. If deductions are made, the landlord must include an itemized statement of damages and receipts or estimates for repairs. Failure to return the tenant deposit or provide proper documentation within 30 days can result in the landlord being liable for up to three times the withheld amount, plus interest and attorney’s fees.
Acceptable Deductions: The tenant security deposit may only be used for unpaid rent, unpaid real estate taxes (if the tenant is responsible), and damage beyond normal wear and tear. The landlord must provide an itemized list of deductions and evidence, such as repair invoices or receipts, when returning the remaining balance of the tenant deposit. Normal wear and tear cannot be deducted under any circumstances.
Where to Deposit: Massachusetts law mandates that landlords place all tenant security deposits in a separate, interest-bearing escrow account at a bank located within the state. The account must be under the tenant’s name, and the landlord must provide written notice to the tenant within 30 days of receiving the deposit. The notice must include the name and address of the bank, account number, and current security deposit interest rate. The interest earned must be paid to the tenant annually or applied toward rent if the tenancy lasts more than one year. Maintaining a security deposit escrow account in Massachusetts or a landlord tenant security deposit bank account in Massachusetts ensures compliance with the state’s strict security deposit laws and protects tenant funds.
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In Massachusetts, landlords may collect no more than one month’s rent as a security deposit. Additional deposits (for pets, alterations, or other reasons) are not permitted under state law. Landlords must return the deposit, minus lawful deductions for unpaid rent or damages beyond normal wear and tear, within 30 days after the tenancy ends.
Baselane Security Deposit Accounts are available to landlords in most U.S. states, including Massachusetts. Baselane partners with federally regulated and state-authorized banks to ensure deposits are held in separate, FDIC-insured accounts that comply with state-specific landlord-tenant laws. Availability may vary based on state banking regulations.
The landlord sets the security deposit amount according to Massachusetts law, up to one month’s rent. Baselane simply provides the compliant banking structure to hold that deposit in a dedicated, interest-bearing account and automatically generate the required documentation for both landlord and tenant.
Baselane Security Deposit Accounts are held with FDIC-insured partner banks and use bank-level encryption to protect your data and funds. Each tenant’s deposit is kept in a separate, secure account, ensuring compliance with Massachusetts law and full transparency for both parties.
No new security deposit agreement is required in Massachusetts if a tenant transitions from a fixed-term lease to a month-to-month tenancy, provided the original deposit remains valid and the tenancy is continuous. However, landlords must still comply with all account holding and annual interest payment requirements.
A landlord in Massachusetts can collect the security deposit at the start of the tenancy, typically when the lease is signed or before the tenant moves in. The landlord must deposit the funds into a Massachusetts-based, interest-bearing account and provide the tenant with a receipt and bank details within 30 days of collection.
Make it easy to manage rental security deposit accounts with Baselane's Banking accounts.
