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What is a Security Deposit?

Regulations for how to accept, store and keep a security deposit differ across jurisdictions, but it is a good idea to keep a tenant or subtenant's deposit in a separate escrow account.

You can not charge your subtenant more than one months' rent as a security deposit.

Storing the Deposit

When you receive the security deposit from your subtenant, you must provide a receipt that includes the following information:

+The amount of the security deposit +The date on which it was received +It's intended use +Your name +Your signature

You must hold the security deposit in an interest-bearing account separate from your personal finances in a bank with a location in Massachusetts. You must let your subtenant know the name of the bank, the address of the bank, and the account number where the deposit will be held in writing.

Returning the Deposit

You must return your subtenant's security deposit within 30 days of the end of the sublease term. You can keep all or some of a subtenant’s security deposit if the unit is returned to you with damages that exceed normal wear and tear or if you need to cover unpaid rent. If you withhold any or all of the security deposit for these reasons, you must provide the subtenant, within 30 days, a detailed list of damages and their cost to repair and written evidence (like estimates or receipts) that indicate the cost of repairs. This list "must be sworn to by your or your agent under the pains and penalties of perjury". If you fail to follow any of these instructions, your subtenant is entitled to three times the damages plus court costs and attorney's fees.

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