Adapted from our Message Boards, where members can ask questions and get answers. Practicing landlords and service providers answer questions, and we combine the best answers into one here.
Q: How Do I Handle Last Month’s Rent in Massachusetts?
Unlike a security deposit, last month’s rent doesn't need to be kept in a separate account. If it’s not in a separate bank account -- separate from your operating account -- then you have to pay 5% interest on the last month's rent. But if it’s in a bank account that is separate, then whatever interest you get from the bank is the interest you pay to the tenant.
The law does require a specific receipt when you take the last month’s rent, as well as annual interest payments. If you don’t make the annual payment, the tenant can withhold their interest from the next month’s rent.
The law on last month’s rent calls for a fine of three times the amount of interest, plus attorney’s fees, if you haven’t paid all the interest owed within 30 days of the end of the tenancy. Compare this with security deposit law, which calls for a fine of three times the amount of the deposit plus attorney’s fees if you mess up the paperwork or the interest payment at any time. In practice, this makes last month’s rent compliance far easier than security deposit compliance.
Q: I gave my tenant a 14-day notice for not paying last month’s rent. He gave me a 30-day notice (intent to move out) and paid last month, but still owes this month. Do I deposit his check? Do I give another notice?
The best advice is to consult with an attorney. When you accept his check, tell him you accept it for use and occupancy only and that he still owes the current month so you are still evicting him. Sign the back of the check “use and occupancy only” as well as telling him this.
Never give multiple notices. If this is the first nonpayment notice in twelve months, the tenant has the right to cure (meaning pay in full everything owed). If he doesn’t cure, or if this isn’t the first nonpayment notice in twelve months, your existing notice stands.
The trick may be in proving the notice was delivered. Hopefully, you hired a constable or the sheriff’s civil process division to deliver the notice. If you just dropped it off in his mailbox, or taped it to his door, your tenant may claim they never got your notice. Paying to have notice served is worth the money.
If your tenant is willing to move out on their own, that’s great, but don’t delay your work to move through the court process. You can be lickety-split with court paperwork while also being friendly and nice and encouraging your tenant to leave on their own. The court process has enough delays, don’t add more by waiting to start.