Quick description: As a tenant, you’re entitled to interest paid on your deposits to your landlord.
Why should I care?
As a renter, you probably had to put down a security deposit, right? And maybe last month’s rent, too. So that sucks. But you know what doesn’t suck? Beer. Burritos. And, uhm, books.
So good news: In Massachusetts, you’re entitled to get up to 5% interest on your deposits to your landlord. It’s all thanks to good old Chapter 186, Section 15B of Massachusetts general law.
In plain English
Here’s how it works, without the legal mumbo jumbo (sorry, pre-law geeks):
- You give your landlord a deposit for last month’s rent and/or security deposit
- At the end of the rental year, you get back the interest earned (because it’s like the deposit is still your money)
- Interest can equal up to 5% of the total, or whatever the interest rate is at the bank where your landlord deposited the money
For instance, if you ponied up $800 in last month’s rent, at the end of the year your slumlord is supposed to cut you a check. Assuming your landlord’s bank pays out 1% interest, that’s $8 you get back. AKA a free lunch. Or 20 lunches, if you count ramen.
Courses of action
What if your landlord doesn’t pay up within 30 days at the end of the year? You have a few options:
- If you’re staying on as a tenant, you can deduct the amount from your next month’s rent.
- If you’re done as a tenant, you get 3x the interest earned, plus court costs and attorney fees.
What to keep in mind
At the end of each rental year, keep a lookout for an interest check from your landlord. Or you could be missing out on a little extra cash that’s rightfully yours.