interest rate on rent security deposit

Asked by Steph6775, Boston, MA Thu Jul 5, 2012

Hello,

I have been renting over the 5 past years with the same landlord. My landlord gave me the security deposit check back with interests of $3.80!! out of a deposit of $3800!!
Does anyone know what that interest rate should be?

Help the community by answering this question:

+ web reference
Web reference:

Answers

7
Great Spaces…, Agent, Dorchester, MA
Thu Jul 5, 2012
Clearly, there are a lot of opinions here. Your best bet is to talk to an attorney that specializes in tenancy law. There is specific case law that applies here.

Here are the specific laws, but again, case law will determine how this is interpreted.
http://www.malegislature.gov/Laws/GeneralLaws/PartII/TitleI/…

A few things. From what my attorney has told me, the owner does not need to put your name on the account. However for tax reporting of the interest earnings, it is wise. It only need be in a "trust" or escrow account which cannot be attached by the landlord's creditors.

A trust or escrow account is not necessarily interest bearing. If for whatever reason, the account was not interest bearing or the landlord did not hold the deposit properly, you may be awarded interest at 5% as well as triple damages.
1 vote
Sherri Way, Agent, Framingham, MA
Thu Jul 5, 2012
Security deposits must ALWAYS be in an escrow account in a Masschusetts bank. The rates right now are really low, so $3.80 might not be out of line, but you would have to calculate it. (I can't do the math in my head!) There are no exceptions to this rule.

The 5% annually does NOT apply to security deposits. The 5% annually applies to last month rent paymetns where the landlord chooses NOT to put the last month's rent into an account. In this situation, the landlord would have to pay you 5% interest on the last month rent amount.
1 vote
Ted Duncan, , Brookline, MA
Thu Jul 5, 2012
Its what the bank gives.
It is extremely low.
Ask to see the bank statement. If it was not held in a separate account he owes you 5% annualized.
1 vote
James Furlong, Agent, Brookline, MA
Thu Jul 5, 2012
The landlord should have deposit the security deposit into a separate interest bearing account in both your names. The interest rate would be determined by that bank. In recent years the interest rate has been very low. If the landlord did not create a separate account there is a default rate that applies (it used to be 5% but that may have changed).
1 vote
Henrietta Ha…, Renter, New York, NY
Tue Apr 4, 2017
Looking for the same answer for New Haven CT area?
0 votes
Howard Chang, Agent, Boston, MA
Thu Jul 5, 2012
1% per year, should be at $38 a year , 5 year total $190.
I just sold a unit with $4350 for last month rent , I have to credit the buyer for 5% interest for one year.
0 votes
Yes, and 8/100ths (.08%) of a percent is $3.04.
Flag Thu Jul 5, 2012
Great Spaces…, Agent, Dorchester, MA
Thu Jul 5, 2012
It is whatever the bank is paying on an FDIC insured account or 5%, whichever is lower. The rate I am getting on my interest bearing escrow accounts is about .08% APR.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more