Massachusetts security deposit account for landlords
Easily collect and manage deposits for every property with dedicated security deposit accounts.
Why use a security deposit account in {{ state }}
Security deposit funds are instantly separated, making move-in, move-out, and returns completely clear.
Benefits for property
owners
Repair and maintenance
Covers property damage such as paint, carpet, or floor damage, including costs caused by pets.
Fund separation
Meet state requirements for holding deposits in a dedicated tenant security deposit account.
Streamlined returns
Simplifies refunding tenants while accounting for deductions like cleaning or unpaid utilities.
Benefits for tenants
Fair protection
Funds are protected from misuse, covering only actual repair costs like cleaning, carpet replacement, or floor damage.
Transparency on deductions
Tenants can clearly see allowable charges, protecting against unfair claims on normal wear and tear.
Savings potential
Deposits may be held in a tenant security deposit account or rental deposit account that earns security deposit interest, helping tenants recover more than they put in.
Baselane accounts cannot hold security deposits in states requiring escrow or state-based accounts, but can be used to collect, track, and securely transfer deposits to compliant external accounts.
{{ state }} security deposit account
Landlords must hold every tenant's security deposit in Massachusetts in an escrow, interest-bearing account. This security deposit bank account in Massachusetts confirms that the funds are not the landlord’s property and are held safely until the lease ends.
{{ state }} security deposit
limits
The maximum security deposit Massachusetts landlords can charge is one month's rent. Compared to the national average security deposit, this amount might be favorable to tenants.
{{ state }} security deposit interest
Interest on security deposit in Massachusetts is mandatory if the tenancy lasts for a year or more. The state law security deposit rule requires landlords to pay the security deposit interest rate equal to the bank’s rate or 5% annually, whichever is lower. You can pay interest to tenants annually or deduct it from their next rent payment.
Go beyond standard security deposit accounts
Collect, return, and track deposits by tenant and
property, even when funds are held in external accounts.
{{ state }} security deposit accounts
Keep every deposit organized and accounted for with secure transfers to [State] security deposit accounts.
Unlimited accounts for all entities
Manage deposits for all entities under one login — LLCs, corporations, partnerships, and individuals.
Free online payments
Collect rent and deposits online for free and easily return deposits via ACH, wire, or check.
Automated bookkeeping
Track and tag payments to the right tenant and property — automatically.
Essentials for every door
Everything you need for every part of the rental process.
Lease creation and e-sign
Upload or create and e-sign state-specific leases online.
Free tenant screening
Screen tenants online for free — instantly verify credit, background, evictions, ID, and income.
Property-specific accounts
Open unlimited checking and savings accounts to easily separate funds for all your properties with no monthly maintenance fees.
{{ state }} security deposit rules
1 month’s rent
Yes (only for tenancies over 1 year)
Separate, interest-bearing escrow bank account in a Massachusetts-based financial institution; inform tenant of account location and number in 30 days
Unpaid rent or fees, repairs, lease violations, and cleaning costs
30 days
Additional resources
ARTICLE
How to collect security deposits
FAQs
How much security deposit can a landlord charge in Massachusetts?
The Massachusetts security deposit limit is strictly capped to one month's rent. You can also collect first and last month's rent plus the security deposit, but all three amounts must be equal to one month's rent each.
Is interest required on Massachusetts landlord security deposits?
Yes, Massachusetts security deposit interest is required if the tenancy lasts a year or more. The money must be in a separate landlord tenant security deposit bank account in Massachusetts, and pay the tenant interest annually (5% or the bank's rate, whichever is lower).
How should I issue a security deposit receipt to tenants in Massachusetts?
You must give the tenant a written notice within 30 days of depositing the money and include the bank's name, location, the account number, and the deposit amount. If you fail to do so, you lose your right to keep the tenant’s security deposit.
How many days to return the security deposit in Massachusetts?
You must return the tenant's security deposit in Massachusetts, along with any earned interest, minus valid deductions, within 30 days of the tenant moving out. If the tenant leaves before a written lease formally ends, you have 30 days after the lease's original end date to return it.
What can a landlord deduct from a security deposit in Massachusetts?
Landlord rights security deposit rules in Massachusetts allow landlords to deduct unpaid rent and severe property damage (house rental, apartment, condo) caused by tenants beyond normal wear and tear, such as floor damage, large holes in the walls, or broken appliances. Be careful when listing down deductions, as wrongful deductions can result in you facing double damages.
Can a security deposit be used for unpaid rent in Massachusetts?
Yes, you can use the funds from the security deposit escrow account in Massachusetts to cover unpaid rent. But make sure to send an itemized list of deductions to tenants, including the rent they owe.
Can a landlord keep a security deposit for breaking a lease in Massachusetts?
Yes, funds in a landlord's security deposit in Massachusetts can be used to cover any losses when the tenant breaks the lease term early. You can use it to cover rent owed until you find a new tenant, provided your lease agreement allows this.
