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Landlords, are you taking your security deposits serious enough? We’re finding that most landlords are not. Guys, Massachusetts law is very clear. As an example, within 30 days of receiving, the security deposit is to be put in a separate bank account. You need to take a receipt of what bank account it’s in and show it to the tenants within 30 days. Once they get to one year in the property, you then have 30 days to give them back their interest.
Take a look at this. Christine, come over here and show them. This is a printout and you can see I crossed the names out on the addresses. This is a printout of security deposits that we, Lamacchia Property Management, has returned to tenants, security deposit interest that we’ve returned to tenants. Look at this, $1.34. What does that say? 91 cents. That says 18 cents.
The point I’m getting at is, it’s a tiny amount of money, but every year that the tenant is in the premises, you have to return that security deposit each and every year throughout. Every time you get to the 12-month mark, you have 30 days to send it along with a receipt, showing that that was the interest that was gained and the actual check. In this particular case, this printout is from our bank.
Obviously, we have hundreds of these that we need to return to tenants. We do it with the bank and we just auto-deposit it back into their account. Not supposed to be deducted from their rent, not supposed to be given to them when they move out, none of that. The other thing, as I mentioned in the beginning, I want to reiterate, the security deposit needs to be held in a separate interest-bearing account.
We just had two landlords in the last three months come on board with us because they got into trouble with their tenants for not returning the security deposits. The frustrating part about it for them is, these tenants actually got in trouble with the landlord to begin with. When the landlord took them to court and they went to court, the tenant found a tenant-landlord attorney who knew the laws. The tenant’s attorney said, “Well, so and so landlord did not return the security deposits as they were supposed to.”
In these two cases, those landlords came to us and said, “Forget it. I’m done being a landlord. You handle the property.” Sometimes people decide to sell, but these people decided to keep it and allow us to manage it, but you have to take it very seriously. We have a blog on our website, lamacchiapm.com, that talks about security deposits. I’m going to put that blog in the comments below here on Facebook. If you’re watching this via email, we’re going to include this blog within the email for you. If you have any questions, let us know, but take your security deposits serious, landlords. Thanks, guys.