Massachusetts Security Deposit Interest
Massachusetts requires deposit interest under certain conditions. The rate rule includes 5%. Condition: holds a security deposit pursuant to this section for a period of one year or longer from the commencement of the term of the tenancy
Interest rules
| Interest required | Conditional |
|---|---|
| Condition | holds a security deposit pursuant to this section for a period of one year or longer from the commencement of the term of the tenancy |
| Rate rule | Five percent per year, or the lesser amount of interest actually received from the Massachusetts bank where the deposit is held. |
| Current rate | 5% per year, or the lesser bank rate actually received |
| How interest builds up | Beginning with the first day of the tenancy; paid at the end of each year of the tenancy. Statute does not specify compound vs simple. |
| When it must be paid | Payable to the tenant at the end of each year of the tenancy; if tenancy ends before the anniversary, all accrued interest within 30 days of termination. Landlord must send a statement and either pay the interest or notify the tenant that it may be deducted from the next rent. If after 30 days from the end of each year the tenant has not received notice or payment, the tenant may deduct the interest from the next rent payment. |
| When interest may be lost | No separate forfeiture rule is supplied here; check the statute before assuming interest is lost. |
| What you can recover | If the lessor fails to pay any interest to which the tenant is then entitled within 30 days after the termination of the tenancy, the tenant shall be awarded damages equal to three times the amount of interest, together with court costs and reasonable attorneys fees. Separate treble-deposit damages under §15B(7) apply to specified deposit-handling failures (escrow, return, transfer), not to annual interest nonpayment as such. |
| Statute | Mass. Gen. Laws ch. 186, § 15B(3)(b), (2)(a), (7) |
Statute says
A lessor of residential real property who holds a security deposit pursuant to this section for a period of one year or longer from the commencement of the term of the tenancy shall, beginning with the first day of the t
What this means
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This estimate holds the selected rate constant for the whole period. Past or future rates may differ. It assumes interest has not already been paid and does not apply forfeiture rules.
Condition: holds a security deposit pursuant to this section for a period of one year or longer from the commencement of the term of the tenancy
The result assumes this condition is met.
Five percent per year, or the lesser amount of interest actually received from the Massachusetts bank where the deposit is held.
Listed rate: 5% per year, or the lesser bank rate actually received
Accrual: Beginning with the first day of the tenancy; paid at the end of each year of the tenancy. Statute does not specify compound vs simple.
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Free Massachusetts template, built from verified state data
I rented [rental property address] from [lease start date] to [move-out date]. I paid a security deposit of $[amount]. I returned the keys on [date] and gave you my forwarding address in writing on [date]. Under Massachusetts law (Mass. Gen. Laws ch. 186, § 15B), a landlord must return the deposit or send a written, itemized list of deductions within 30 days after termination of tenancy/occupancy (end of the tenant's occupancy).
FAQ
Does my landlord owe deposit interest in Massachusetts?
Only when the legal condition is met. holds a security deposit pursuant to this section for a period of one year or longer from the commencement of the term of the tenancy
Which interest rate should I use?
5% per year, or the lesser bank rate actually received Five percent per year, or the lesser amount of interest actually received from the Massachusetts bank where the deposit is held.
When must the landlord pay the interest?
Payable to the tenant at the end of each year of the tenancy; if tenancy ends before the anniversary, all accrued interest within 30 days of termination. Landlord must send a statement and either pay the interest or notify the tenant that it may be deducted from the next rent. If after 30 days from the end of each year the tenant has not received notice or payment, the tenant may deduct the interest from the next rent payment.