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Landlord can't evict tenant if he screws up the security deposit, court rules

The Supreme Judicial Court ruled today that a landlord who never gave a tenant a receipt for her $1,300 security deposit, let alone pay her interest on it, will have to try again if he wants to evict her from her Dorchester apartment.

The state's highest court ruled that the legislature has repeatedly strengthened the security-deposit law as a protection for tenants and that Garth Meikle, who owns a three decker at 41 Wildwood St. in Dorchester, blew it by not giving Patricia Nurse the receipt called for in the law, telling her where he was keeping her money and paying her interest - a bit more than $3.

Because of that, Nurse had the right to fight to stay in the apartment by withholding rent when Meikle let her lease lapse, changed the unit to an at-will one and then tried to evict her in 2014 to make room for family members.

The court said its ruling does not mean Nurse can stay in the apartment forever:

The statute does not impose an obligatory tenancy on the landlord. Nothing in the statute prevents the landlord from bringing a second summary process action for possession after he or she has remedied the violation of the security deposit statute. Also, even where the tenant agrees to pay the amount due the landlord to exercise the right to possession, the landlord may thereafter commence a summary process action. We interpret the Legislature's intent in providing for the tenant's right to retain possession as a timelimited equitable remedy for the particular conduct underlying the tenant's defense or counterclaim.

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Comments

Are property owners no longer allowed to do as they please with their property once the lease is up? Time to raise rents by $500 or so a month to price in this sort of bullshit.

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It's downright un-Amurrican!

The guy blew it by not following a state law that's been on the books since at least 1977, and even then, the court said if he fixes that problem (i.e., pays her the $3 or $4 in interest and tells her where he's keeping the money), then he can evict her. Sucks to be him, but it's not like he got snagged by some new diktat or something.

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Why couldn't the $3 and account number get fixed on the spot, instead of through endless court battles?

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Landlord probably didn't place it in a separate account in the first place, so there's no account number to give. Illegal and incredibly stupid, yes, but how long should his tenant get to live there rent-free as a punishment for that?

Or he's just a stubborn jerk. Tiny quibbles have a way of blowing up way out of proportion when someone's home is on the line. I could easily see a tenant asking for the account info in the middle of some other argument and a landlord going "nuh-uh, you can't make me!" out of sheer cussedness.

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They're breaking the law. As a landlord this is one of the easiest parts of owning a property.

Holding landlords accountable for money that they're responsible to return to a tenant is a good thing. You have to be an idiot to disagree. You have to be an even bigger idiot to fuck this up. This is done so that tenants don't lose what can amount to months and months worth of savings due to fiduciary douchebaggery on the part of the property owner.

There are many times when I sympathize with landlords in MA. This is not even close to one of those times.

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Landlords should obviously be obligated by law to return the security deposit along its pre-determined interest once the lease is up, with stiff penalties if they try to delay it, but it shouldn't matter where they keep the money in the meantime. This is a lot like all the other moronic laws where criminals get to walk because the cop misspelled "cocaine" in his report. "So, I trashed the apament and now I'll live in it rent-free for six months or so and get my deposit back just because that moron of a landlord who worked his whole life just so he could buy that crappy two-family and rent out the downstairs didn't know every single one of the 873873726384995 pro-tenant laws that are on the books."

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because if the landlord is sued, divorces, identity is stolen et cetera that money isn't cordoned off and safe.

the money isn't theirs.

edit: fuggit, as far as i'm concerned it should qualify as unreported income if theyre going to effectively pocket it. go hog wild.

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How does putting the money in a separate account prevent any of those problems?

It's not like the money can only be withdrawn with a secret PIN that only the tenant knows.

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How many thousands of dollars should the penalty be for $3 of interest and an account number?

Or do you think that once the law is broken, all bets are off?

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I'm betting that it was because there was no bank account and no interest rolling over in that account, and, therefore, no exact amount of interest to be known and paid.

Hard to pay out the correct amount of interest if you effectively pocketed the deposit by putting it all in your own savings account (which is why it has to be in a separate, named account).

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I wish the law were clearer about what form that receipt is supposed to take. When I deposited the check for my first renters, the bank had NO IDEA what I was talking about when I asked for a receipt to give them. We ended up going with a photocopy of the form used to open the account with wite-out over the SSN.

Glad it wasn't tested in court because I still don't have a clue if that's what I'm supposed to do. The renters didn't know, my landlord neighbors don't know... In practice I suspect the "receipt" can be a scrap of toilet paper scrawled with "IOU 1 Security Deposit from X bank" but it's not a good feeling to be so uncertain.

Plus I kept a copy of that "receipt" for my own records, but how would I go about proving I gave a copy to a renter who lost it, or forgot ever getting it, or straight up lies about it? I guess next time I'd better have it notarized and sent registered mail...

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I would be afraid to have any interactions related to this stuff unless it was through email. Then, you at least have a record of the correspondence and can argue that an email detailing escrow account details represents a "receipt."

Hand or mail them a hard copy and you have no evidence.

People complain about phone calls going out of style but legally speaking, phone calls are useless.

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The receipt is just a piece of paper the landlord makes with:

(1) the bank’s name and address
(2) the account number
(3) the amount of the deposit

If you honestly need someone else to make a form for you, see here:

http://www.umocss.org/pdfs/Security%20Deposit%20Receipt.pdf

Honestly, why are you asking the bank to make you a receipt? Does the grocery store ask their bank to make receipts for their customers? You are the business owner, the tenant is your customer, you make the receipt.

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Are you new? When you receive any payment or property from anyone, just make a receipt. It can be handwritten even. Have both people sign two copies.

(Also, FYI, if anyone's a landlord and wants to do this the easy way, open a Capital One 360 checking account, and then you can create as many savings accounts as you want with unique account numbers just by clicking a button on their website. Also useful for situations like wanting to show that money paid to a kid or elder or whomever is in a separate account rather than your general funds, or whatnot.)

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That doesn't seem to be the case. The lower court ruling (which the tenant appealed) was that the landlord is due a couple months unpaid rent, minus the security deposit and four dollars interest.

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I still remember being told by my landlord on Charles St. that they were not giving us checks for interest on our deposit. It just wasn't worth the hassle of fighting. I know, I know, I just helped them set a precedent so they can do it to others.

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Same here, my interest was 40 cents last year. LL told me to deduct off the next rent check.

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Interest rates were a lot higher back when this law was written :)

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rents were a lot lower

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My current landlord sends me a check for an annoyingly small amound of change four times a year...the interest on my security deposit. My previous apartment, the landlord and I signed an agreement that any interest would be deposited back into the same account as the actual security deposit, and the landlord would give me a copy of the statement. When I moved out the security deposit I got back was a tiny bit bigger than the one I had given the landlord. That certainly was easier, but I'm not sure if it was technically legal. It's definitely not common.

It is neither unusual or illegal for a landlord to choose not to renew a lease, nor in the case of a building of three units or fewer, to issue an eviction so that he or she can give the apartment to family members,...as long as the landlord follows ALL the legal requirements to do so. In this case, he didn't. He can try again later after he does what he needs to do to be in compliance withe the law.

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My old roommates and i sued our last landlord over this. he claimed that we damaged the unit, which we didn't, and he withheld half our security deposit. took him to court over it and won. as it turns out, he didn't even have a leg to stand on (if we had damaged the unit) because a few months after we moved in him he emptied our security deposit escrow account (which he never gave us information on) and it remained empty until we moved out 4 years later. the portion of the security deposit he did return came from his personal checking account. that alone doomed his case against us. in the end, we were made whole, our lawyers fees were paid and we each got a small amount of cash awarded to us as a penalty.

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A friend of mine was dating a guy who lived with three others in an apartment in Cambridge back in the mid-80s.

When they moved, the landlord claimed that they damaged the apartment and he wouldn't give them back their deposit.

The landlord neglected three things:

1) he violated the law we are talking about
2) he didn't have before move-in and after move-out pictures to support his claim (and the four guys did)
3) one of the guys on the lease had Dershowitz for a surname (Alan Dershowitz' nephew)

The settlement and penalties paid for their entire next year of rent.

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But had they actually damaged the apartment?

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According to other reporting on the story story, the landlord did put the security deposit into a proper account, and was just unable to get an appropriate "receipt" from the bank.

So the result of this litigation is that the tenant got to stay in the apartment an extra 18 months. Was the tenant paying rent that whole time, or just milking the landlord?

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part of the law is that they must be able to provide that receipt. this is 101. zero sympathy. if you can't follow this basic law what other laws aren't you following as a landlord?

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Yea and free rent and inability to terminate tenancy agreement is a totally reasonable result of that failure.

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next time he should follow the law with money that isn't his.

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It is.

These laws exist for a reason. If there were no penalties and no enforcement, a whole lot of money would vanish on a regular basis.

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That is one of the main reasons rents are so damn high in Boston - landlords need to price in the potential headaches and losses form getting a scumbag tenant who happens to know all the loopholes. Do away with all the bullshit that allows tenants to live rent-free for a year just because the landlord didn't cross all the T's and landlords will charge less once they know they won't have to charge extra now to make up for the potential deadbeat they're pretty much guaranteed to get at some point. Lease is up? Here's your security deposit, here's your interest, out you go! Cops being called on you three times a week for the past month? Two weeks to vacate the premises before your crap get tossed out on the curb, along with your ass! And on the flip side, start cracking down on slumlords who are violating laws that actually matter.

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> was just unable to get an appropriate "receipt" from the bank.

Well, that reporting is incompetent because nothing in the ruling, or the law, says anything about getting a receipt from a bank. The receipt is something the landlord can make in 2 minutes, or find templates for online.

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