The statute, briefly
Massachusetts General Laws chapter 186, section 15B governs security deposits on residential tenancies in the Commonwealth. Three things in it matter most to owners:
- The deposit must be held in a separate, interest-bearing account in a Massachusetts bank
- Interest accrued on the deposit belongs to the tenant, paid annually or credited at lease end
- Within thirty days of receiving the deposit, the landlord must furnish the tenant with a receipt that includes the name and address of the bank holding the funds, the account number, and the amount
That last item is the one most landlords miss. The penalty for noncompliance is meaningful: a court may award the tenant the full amount of the deposit plus interest, regardless of whether the landlord otherwise had a valid claim against it.
What Northwind does
Every deposit we collect on behalf of an owner goes into a segregated, interest-bearing account at a Massachusetts-chartered bank. The receipt — bank name, branch address, account number, deposit amount — goes to the tenant within seven days of move-in, well inside the statute's thirty-day window. We track interest accrual quarterly and either credit the tenant at lease end or remit it annually depending on the lease term.
None of this is unusual for a Massachusetts firm; the rules have been in place since long before we started in 2008. What we sometimes find is that owners switching to us from out-of-state managers, or from self-management, have been holding deposits in commingled accounts without realizing the exposure that creates.
What that means at switchover
When we take over an existing tenancy, the first thing we do is transfer the deposit out of the prior holder's account and into our segregated account, with a fresh receipt to the tenant inside thirty days. If you are an owner thinking about switching managers and your deposits are commingled today, that is the cleanest moment to fix it. We handle the paperwork on your behalf.
Questions about a specific situation are best handled directly. The principles in this post are not legal advice; they are how we operate.