Property Management
A Massachusetts property manager who receives a security deposit from a tenant must pay interest on it annually at a rate not less than:
AThe federal funds rate
BThe rate paid by the largest bank in Massachusetts on passbook savings accounts✓ Correct
C5% per year regardless of market rates
DThe prime rate plus 2%
Explanation
Massachusetts Chapter 186 §15B requires landlords to pay interest on security deposits at a rate equal to the rate of interest paid by the largest commercial bank in Massachusetts on regular savings accounts. This rate is typically tied to passbook savings rates at institutions like Sovereign Bank (or its successors).
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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