Property Management
A Massachusetts property manager collects a security deposit. Which of the following statements about interest on the deposit is TRUE?
ANo interest is required for the first year
BInterest must be paid annually at 5% or the passbook savings rate, whichever is lower✓ Correct
CInterest only accrues if the tenancy exceeds 2 years
DThe tenant can waive interest in the lease agreement
Explanation
Massachusetts law requires security deposit interest to be paid annually at 5% per year or the passbook savings account rate, whichever is lower. Tenants cannot waive this right in a lease.
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