Security Deposits, Interest and Banks
My landlord placed my deposit in a bank that has branches outside of Massachusetts and in an account that only pays 2% interest. I thought the law in Massachusetts required my money to be deposited in a Massachusetts account that pays 5% interest.
-- Tim, no town given
-- Tim, no town given
In today’s banking environment, many banks have branches in more than one state, and Massachusetts law does not forbid landlords from depositing security deposits in such institutions. However, a recent appeals court decision makes it clear that the security deposit must be deposited in a Massachusetts branch. Accordingly, even if the bank is based in Massachusetts, the landlord cannot make the actual deposit in a New Hampshire branch, for example.
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As for the interest rate, the landlord is only required to pay 5% interest OR a lesser amount that she actually receives on the account. The landlord need not pay any interest on the deposit if the tenant resides in the apartment for less than one year.
(Submitted by the Editor) http://www.malawforum.com/content/security-deposits-interest-and-banks
