A recent Massachusetts Appeals Court case highlights the perils for landlords in failing to safeguard the security deposit.
In 2013, the landlord filed a summary process action against the tenant for nonpayment of rent. The case was eventually moved to the civil docket where a trial was held, which resulted in a favorable ruling for the tenant including for security deposit violations.
The security deposit law is long and storied, but the judiciary has repeatedly affirmed the purpose of the law is to protect tenant's money. The legislature wrote the lengthy protective language to encourage strict compliance. This includes automatic fee shifting provisions, allowing lawyers representing a tenant who proves a violation to recover fees and costs.
In this case, the tenant alleged that the landlord did not place the security deposit in a valid account and did not provide the tenant with the bank name, address and number of the account.
On appeal the landlord argued that the trial court judge's exclusion of an alleged security deposit receipt was improper.
The Appeals court determined that because the jury found the landlord did not place the deposit into a correct account, it did not matter if they saw the receipt or not. The account itself was improper.
The Appeals court awarded the tenant's attorneys fees for the appellate work done on the case.
As is clear for anyone doing landlord/tenant work, a properly held and managed security deposit is imperative for landlords, who ignore it at their own peril.
Michelle Holdings, LLC v. Johnston, 99 Mass. App. Ct. 1106 (2021).
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