Change Needed in the Security Deposit Law

This page considers the changes need for Massachusetts security-deposit law. For a practical guide to navigating the law as it stands now, see our related page:

Amicus Briefing for Meikle v. Nurse

We filed this briefing before the Supreme Judicial Court issued their decision. The case was whether a security deposit violation (equivalent to approximately $3 in unpaid interest) would trump an eviction case (no-fault, and subsequently, $3,000 owed in unpaid rent). The security deposit violation first delayed the eviction for two years, and then with the SJC’s decision, ended the eviction in the tenant’s favor.

 

Possible Changes to Security Deposit Law

The following would need to be run through a MassLandlords poll before we can take an official position, but here are some ideas we’ve collected:

  • Make it clear that security deposit violations are counterclaims but not defenses against eviction.
    • Solves the Meikle v. Nurse problem, in which less than $4 of interest outweighs over $3,000 in unpaid rent. (Good for landlord.)
  • Create a de minimis standard below which interest is deemed negligible and payable at the end of the tenancy, rather than yearly.
    • Fixes the problem where landlords are paying pennies to the tenant when the tenant doesn’t care. (Good for landlord and tenant.)
  • Eliminate statutory triple damages for good faith administrative errors.
    • Fixes the problem where failure to sign “under the pains and penalties of perjury” obligates the landlord to repay the tenant three times the amount of the deposit. (Good for landlord.)
  • Allow banks to be out-of-state depositories.
    • Fixes the problem where Massachusetts banks may offer worse rates than electronic depositories like Capital One 360. (Good for tenant.)
  • Allow financial institutions including credit unions to hold deposits, not just banks
    • Fixes the narrow use of the term “bank” where the broader “financial institution” or “FDIC insured depository” should have been used.

 

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