If a security deposit is not properly accounted for, canthe lease be voided?

In MA the state law requires landlords to: Hold the deposit in an interest-bearing bank in the state separate from your own money; Give a receipt to the tenant within 30 days of taking the deposit, identifying the bank, address, account number, and the amount of the deposit held; and pay 5 % interest or any lesser amount of interest actually received from the bank where the deposit is held, if the tenant resides on the premises for at least 1 year. Said payment is to be made on the anniversary date of the tenancy. If this hasn’t occurred in the 1+ years of living there is the lease nullified?

Asked on November 29, 2011 under Real Estate Law, Massachusetts


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

No, the lease would not be nulified. A lease or other contract is terminated by a party's breach of material provision, which is a provision going to "the heart" of the contract or lease--which in this case, is leasing property fit for its intended purpose. The failure to properly account for a security deposit will give rise to a cause of action (i.e. grounds to sue), but does not mean that the tenant is not getting the "benefit of his bargain"--premises fit to use. Since the tenant is still getting what he or she paid for, the failure to properly account for the security deposit does not terminate or void the lease.

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