Security Deposit vs. Last Month’s Rent

We recommend landlords collect a security deposit of one month’s rent instead of last month's rent in advance.  The security deposit better protects the landlord.

Although this does require additional record keeping and opening a separate security deposit account; we feel that it offers the property owner a bit more leverage when tenants are moving out.  Tenants obviously want to get their entire security deposit refunded after moving out, therefore they seem to move out in a more diligent manner (i.e., not scratching the paint on walls, making sure the unit is left clean, trash & personal belongings removed).  A security deposit also offers a bit of financial security should the tenant not pay rent or owe back rent.  Damages and unpaid rent are legally deductible from a tenant’s security deposit.

Additional forms would be the Security Deposit Receipt & Apartment Condition Statement., which would be completed at the commencement of the lease.  We highly recommend owners document apartment conditions with both still photos and or videos.  Landlords are required to place these funds in a MA interest-bearing account and to notify tenants where funds are being held (Security Deposit Receipt form).  Landlords are required to return security deposit plus any accrued interest less any unpaid rent and documented damages and repair charges, within 30 days of tenants vacating the property.  This is documented on the Security Deposit Worksheet that would be returned along with any monies to the vacating tenant.