Fees & Rent

Legal Fees

Landlords may charge:

  1. First month’s rent

  2. Last month’s rent

  3. Security deposit equal to one month’s rent.

  4. Lock fee for the purchase and installation cost of a lock and key.4

  5. Inspection fee: landlords may charge tenants for 50% of the cost of a fee (which is minimal) to have the apartment inspected to make sure it meets the standards of the State Sanitary Code, with such charge spread over 12 months.5

A licensed real estate broker or salesperson may legally charge a fee if a tenant rents an apartment that he locates for him. Apartment seekers should ask about these fees before selecting a rental agent.

All brokers and salespeople who rent apartments must provide each prospective tenant with a written statement stating the following:

  1. The fee amount, if any

  2. The manner and time in which it is to be paid

  3. Whether the fee is contingent on establishing a tenancy

This signed and dated written notice must be given to the prospective tenant upon his first meeting with a real estate broker or salesperson. It must specify the agent’s license number. The agent must request that the prospective tenant sign the fee notice. If the tenant refuses to sign, the broker or salesperson must make a notation of the tenant’s name and refusal on the notice.

A copy of each such written notice must be kept on file for a period of three years from the date it is originally presented. Copies of these records must be furnished to the Board of Registration of Real Estate Brokers and Salespeople or other agents upon request.
Brokers and salespersons are also required to maintain copies of any records concerning the availability of a rental unit for a period of three years from the date it was rented. Additionally, copies of documents that prove receipt of funds, from any eventual or prospective tenant, fees, deposits or payments as well as checks issued on any escrow account over which the agent has issuing authority must be kept on file for three years from the date of issuance.6

Illegal Fees

It is illegal for a landlord to charge any other up-front fees, including:

  1. A deposit to hold the apartment for a prospective tenant.

  2. A damage deposit or fee to allow a tenant to have a pet.

  3. A finder’s fee for renting an apartment that the landlord owns, unless he is a licensed realtor.

Security Deposits

In Massachusetts, it is common practice for landlords to require incoming tenants to pay a security deposit. Such deposit cannot exceed the amount of one month’s full rent.

Upon receiving a security deposit, a landlord must give the tenant a receipt, which must state:

  • The amount of the security deposit

  • The name of the person receiving it

  • The name of the landlord

  • The date on which it is received, and

  • A description of the premises being rented.

The landlord must place the money in a separate, interest-bearing account in a bank located in Massachusetts. Within thirty (30) days of receiving the security deposit, a landlord must give the tenant a second receipt containing the following information:

  • The name and location of the bank where the money is being held

  • The account number, and

  • The amount of the deposit

Since January 1972, a landlord must pay interest on the security deposit after one year’s tenancy and on each succeeding year’s anniversary date. The interest is the amount paid by the bank holding the money, or 5%, whichever is lower.

A security deposit is a form of protection for the landlord should the tenant cause damage to the property or leave owing rent. A security deposit may only be used for three things:7

  1. Unpaid rent

  2. The repair of damages caused by the tenant (this does not include general wear and tear)

  3. The payment of the tenant’s percentage of a property tax increase (provided that there was a tax escalator clause in the tenant’s lease)

The landlord is required to provide the tenant with a written “statement of present condition” of the apartment. This statement must be provided upon the landlord’s receipt of the security deposit or within 10 days after commencement of the tenancy, whichever is later. Should the tenant dispute anything in the statement of condition, he has 15 days in which to notify the landlord in writing of such concerns by submitting a separate list of damages. The landlord has 15 days upon receipt in which to respond to the tenant’s list by either signing it in agreement or attaching a statement of disagreement.8

Landlords are required to maintain a written record of all security deposits received, for a period of no less than two years after the termination of a tenancy. The landlord must make that record available for inspection by any former, current or prospective tenant who asks to see it. The record must include:

  1. A description of any damage claims

  2. A statement of when repairs were made

  3.  Substantiation of repair costs

If a landlord refuses to show these records to a tenant who has paid a security deposit, the tenant is entitled to an immediate refund of the deposit plus interest.9

A landlord has 30 days after the end of the tenancy to return the entire security deposit and its accrued interest. If any deductions are made, the landlord must return the balance along with a statement that includes an itemized listing of the deductions with supporting documentation and receipts.10

If the landlord does not return the security deposit within 30 days of the end of the tenancy, or if the tenant disputes any deductions that the landlord has made, the tenant may sue the landlord. First, though, the tenant may decide to send a demand letter to the landlord, asking for the immediate return of the amount in dispute. Such a letter is not required, but it is often effective. The tenant should make three copies of the letter:

  1. One for the tenant’s own records

  2. Another to be mailed to the landlord by first class mail

  3. A third to be sent to the landlord by certified mail (return receipt requested). In this manner, delivery and notice to the landlord can be confirmed.

If the demand letter does not get results or if the tenant decides not to send a letter, the tenant can proceed to court, and seek the disputed amount plus interest, court costs and reasonable attorney’s fees. The tenant may seek and the court must award three times the disputed amount in damages whenever the court finds that:

  • The landlord failed to return the security deposit or to provide a written statement with substantiation for any deductions within thirty days after the termination of the tenancy

  • The landlord failed to hold the security deposit in a separate interest-bearing account in a bank located within the commonwealth, or

  • The landlord failed to transfer the security deposit to a successor in interest, such as a new owner of the building.11

Tenants in Boston can seek damages in either the Small Claims or the Civil Division of the Boston Housing Court or the District Court in which the property is located. For claims up to $7,000, relief may be sought in the Small Claims Division although the court may award double or triple damages above that amount. All other actions above that dollar amount must be pursued as civil actions in the Civil Division.12

Last Month’s Rent

It is common practice in Massachusetts for landlords to require an incoming tenant to pay the last month’s rent in advance. Upon receiving payment of the last month’s rent, the landlord is required to provide a signed receipt containing the following information:

  • The amount received

  • The date it was received

  • Its intended application

  • The name of the person receiving it

  • A description of the premises being rented

  • A statement of the interest to be paid, and

  • A statement that the tenant should provide the landlord with a forwarding address where the interest may be sent

A landlord must pay interest on the last month’s rent, even if the money is held for less than one year. The interest is the amount paid by the bank, if any, holding the deposit or 5%, whichever is lower. Landlords are not legally required to hold last month’s rent payments in separate bank accounts. If the tenancy lasts for more than 12 months, the interest is due on the anniversary date of the tenancy, but the tenant may be given the option of applying it to his or her next rental payment. The payment of interest on the last month’s rent has been legally required since April 1, 1984. A landlord may be held liable to the tenant for triple damages plus attorneys’ fees for failure to pay the interest within 30 days after the end of the tenancy.

The pre-payment of the last month’s rent protects the landlord should the tenant leave without paying the last month’s rent. If the tenant makes this pre-payment, it is to be applied as rent for the last month of his tenancy.

If the Building is Sold

A landlord is required to transfer the security deposit and last month’s rent to the new landlord if he sells the building. Until the tenant is given notice, the previous landlord is responsible for the deposits or payments. If the monies are not turned over to the new landlord, the tenant may sue the previous landlord for triple damages.

The new landlord is still liable for the deposits/payments even if he never received them from the previous owner. This liability may be settled by the offer of free use and occupancy of the unit for the period of time equal to the amount paid. Properties that have been foreclosed upon or seized for back taxes may be exempt from this section of the law.13

If the building is being sold for condominium conversion, see Condo Conversion.

Other Information About Security Deposits and Last Month’s Rent

A tenant cannot be made to pay a security deposit or last month’s rent twice for the same apartment.

If a landlord gives a tenant a rent increase, he can also ask the tenant to pay the difference in the last month’s rent and security deposits so that they equal one month’s rent.

If a tenant is under a lease with no security deposit or last month’s rent payment written into it, he cannot be asked for either until the lease is terminated and a new tenancy is created.

Rent Increases

Rent control was abolished in Massachusetts by a statewide referendum in 1994. Now, with very few exceptions, a landlord can charge whatever rent the market will bear.

Rents cannot be increased during the term of a lease, but tenants-at-will can be given rent increases at any time as long as the landlord provides a proper written thirty-day notice terminating the current tenancy and offering a new tenancy at a higher rent. The thirty-day notice must be received by the tenant at least 30 days before the rent increase is to take effect, or one full rental period if the month is longer than 30 days.41

Late Payment of Rent

There is no “grace period” for the payment of rent. If the rent is due on the first of the month, rent paid after that date is considered late. The only exception to this is for any tenant whose source of income is a government check such as a Social Security or disability payment which arrives later than the first of each month. This exception only holds if payment is made promptly upon receipt of the government check.

A landlord can collect a late fee only if there is a “late payment penalty” clause in a lease, and then not until the rent is 30 days late.46 A lease cannot have a “discount clause” for paying the rent on time, as this is a late payment clause in disguise and is illegal.

Rent Withholding

A tenant may consider withholding rent if the landlord fails to make repairs, provided that:

  1. There are code violations

  2. The landlord knew of, was informed of or should have known of the conditions

  3. The damages were not caused by the tenant

  4. Needed repairs can be made while the tenant is in residence

  5. The conditions “endanger or materially impair” the health or safety of the tenant(s)33

While the law does not mandate it, it is wisest for the tenant to set up a separate bank account for the withheld rental payments. In the event that the landlord attempts to evict for non-payment of rent, the tenant can raise rent withholding as a defense. The Court may order the withheld rent to be put into a court-controlled escrow account.

The existence of code violations can be established by having the apartment and common areas inspected by the Inspectional Services Department.

4. G.L. c. 186, §15B (1)(b)
5. City of Boston Code, Section 9-13
6. 254 C.M.R. 7.00
7 G.L. c.186, §15B(4)
8 G.L. c. 186, §15B (2)(c)
9 G.L. c. 186, §15B (2)(d)
10 G.L. c. 186, §15B (4)
11. G.L. c 186, § 15B (6)
12 G.L. c. 218, §21
13. G.L. c. 186, §15B(5), (7A)