Last Month's Rent Explained

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Last Month’s Rent: It is common practice in Massachusetts for landlords to require an incoming tenant to pay the last month’s rent in advance. Upon receiving payment of the last month’s rent, the landlord is required to provide a signed receipt containing the following information: 
  • The amount received 
  • The date it was received 
  • Its intended application 
  • The name of the person receiving it 
  • A description of the premises being rented 
  • A statement of the interest to be paid, and 
  • A statement that the tenant should provide the landlord with a forwarding address where the interest may be sent 
A landlord must pay interest on the last month’s rent, even if the money is held for less than one year. The interest is the amount paid by the bank, if any, holding the deposit or 5%, whichever is lower. Landlords are not legally required to hold last month’s rent payments in separate bank accounts. If the tenancy lasts for more than 12 months, the interest is due on the anniversary date of the tenancy, but the tenant may be given the option of applying it to his or her next rental payment. A landlord may be held liable to the tenant for triple damages plus attorney’s fees for failure to pay the interest within 30 days after the end of the tenancy.The pre-payment of the last month’s rent protects the landlord should the tenant leave without paying the last month’s rent. If the tenant makes this pre-payment, it is to be applied as rent for the last month of his tenancy.

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