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SJC Heard Case on Massachusetts’ Security Deposit Law

January 28, 2017

The Supreme Judicial Court of Massachusetts (SJC) heard on November 5, 2016 a case that raises the issue of whether a violation of the procedural requirements of the security deposit law can provide a defense to a landlord’s attempt to gain possession of an apartment.

Details of the case

In Meikle v. Nurse, the case begins when a tenant started renting from a landlord in 2011. During that time, a one-year lease was signed with an agreed rent of $1,300 per month with a $1,300 security deposit. After the year was up, the lease became an at-will agreement. In June of 2014, the landlord attempted to recover possession of the rental unit from the tenant. According to the tenant’s brief to the SJC, the landlord terminated tenancy without fault of the tenant. In response, the tenant alleged the landlord breached the implied warranty of habitability and violated the security deposit law.

Ultimately, the Housing Court Judge held that the landlord breached the security deposit law by failing to provide the tenant with a receipt within thirty days of receiving the deposit and by not paying the tenant the interest accrued on her security deposit. As a result, the court found the landlord owed treble damages (three times the rent) plus the accrued interest on the security deposit. However, the lower court also found that the violation did not constitute a defense to possession and thus awarded possession to the landlord. The tenant argues that this is "contrary to the plain language of the security deposit statute" which states that prevailing based on "any counterclaim or defense under this section," provides an affirmative defense to possession.

Impact of the case

The anticipated decision of the SJC could help guide similar disputes in the future and provide clarification for landlords and tenants as to the effect of violating the security deposit law. A recent article discussing the case in Massachusetts Lawyers Weekly notes that, contrary to theMeikle ruling, precedent cases have held that violations of the security deposit law resulted in a successful defense to a landlord’s claim for possession. Amherst attorney Peter Vickery, on behalf of the statewide group, filed an amicus brief and stated that "It's about the distinction between a counterclaim and a defense. Nobody disputes, if a landlord who is suing for rent and possession has violated the security-deposit laws, then the tenant can raise that as a counterclaim. The statute makes that clear. The statute also says that some claims and counterclaims can also serve as defenses. There's a list of them in Chapter 239, Section 2A. Security-deposit violations are not on that list."

Regardless of how the SJC rules on this contested issue, landlords in the Commonwealth have begun to forego security deposits due to such problems. This dynamic is compelling prudent landlords to refuse security deposits and cover potential damage costs by charging higher rents. If the SJC decides that security-deposit violations do give rise to a defense against possession, fewer and fewer landlords will ask for security deposits, and rents will rise accordingly.

Importance of legal counsel

This case provides an example of the many issues that can arise in landlord-tenant relations. As a result, those who are facing these issues are wise to seek the legal counsel of an experienced commercial and residential leasing lawyer. An experienced attorney will review the details of your unique case and work to protect your legal rights and avoid any potential pitfalls.

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