Landlords On Notice: Security Deposit Funds Do Not Cover “Reasonable Wear and Tear”

 George Georgountzos

It is often said that being a residential landlord in Massachusetts is difficult. There is a perception that statutory rules favor tenants, particularly with respect to the handling of security deposit funds. Mass. Gen. L. c. 186, §15B outlines the landlord’s responsibility with respect to security deposits. For

example, a landlord may only retain a security deposit equal to the first month’s rent, provided that the tenant is provided a statement of condition within ten (10) days of receipt of the security deposit funds. Security deposits must be held in a separate, interest-bearing account in a bank located in Massachusetts that is outside the reach of the landlord’s creditors, and provide the tenant with the bank’s name, location and account number.  Landlords must pay the tenant the yearly interest on the funds held. Landlords must return the security deposit funds within thirty (30) days after the tenancy ends, or provide a detailed itemization of damages, reasonable wear and tear excluded. Landlords who fail to adhere to these requirements are subject to a strict liability penalty of three times the security deposit funds held, 5 percent interest, plus the tenant’s reasonable attorneys’ fees in an action to recover the security deposit. Many landlords unknowingly and innocently violate provisions but nevertheless find themselves subject to the statute’s penalties.

Landlords should be careful to avoid lease provisions that conflict with the law. The Supreme Judicial Court recently answered two questions concerning provisions in a residential lease that conflicted with Massachusetts law. In Peebles v. JRK Property Holdings, Inc., the SJC addressed: (1) under what circumstances does a landlord who charges a tenant for painting, carpet repair, or similar refurbishment violate the “reasonable wear and tear” prohibitions in the statute; and (2) does a lease that includes a requirement that the tenant have the leased premises professionally cleaned or bear the costs of such professional cleaning from security deposit funds violate the statute? 

The Court confirmed that the language about “wear and tear” in the statute is clear and unambiguous, but a factual determination must be made as to which repair charges are valid and which violate the statute. A landlord needs to assess, among other things, the nature and cause of damages, the condition of the property at the lease’s commencement, and whether deterioration of the conditions are reasonable, normal wear and tear, or something more.  The Court held that the provisions of the JRK Property Holdings lease that mandated the tenant pay for professional cleaning and painting or have those charges deducted from the security deposit violate the clear language of the Massachusetts statute. The linking of the tenant’s responsibility to the security deposit was improper. The SJC did not opine whether a requirement that a tenant pay for professional cleaning, so long as there was an exemption for normal wear and tear, was permissible.

Landlords may require tenants to return the premises to the condition in which they found, but there must be an exception for reasonable wear and tear.  Clearly, in Massachusetts, a landlord who seeks to saddle a tenant with costs and tasks from security deposit funds that address reasonable wear and tear runs the risk of violating the law. 

A Co-chair of REBA’s Residential Landlord/Tenant Section, George is a lawyer at the Boston firm of Rudolph Friedmann LLP, with an active litigation practice representing landlords in disputes with tenants, bringing actions or defending against claims in business disputes, and representing buyers and sellers of commercial enterprises such as restaurants, shops and professional offices. Fluent in Greek, Russian and French, George can be contacted at ggeorgountzos@rflawyers.com.