Security Deposit in Massachusetts

The Massachusetts Appeals Court ruled that a security deposit for a Massachusetts residential lease must be deposited in a Massachusetts branch of a Massachusetts bank: Taylor v. Burke. (subscription required)

The landlord in the case opened the security deposit account in the New Hampshire branch of Citizens Bank.

Under MGL c.186, S. 15(B) , (3)(a) provides: “Any security deposit received by such lessor shall be held in a separate, interest-bearing account in a bank, located within the commonwealth under such terms as will place such deposit beyond the claim of creditors of the lessor, including a foreclosing mortgagee or trustee in bankruptcy, and as will provide for its transfer to a subsequent owner of said property. . . .”

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