Source: http://massachusettslandlords.com/castenholtz/
Timestamp: 2019-04-22 07:04:51+00:00

Document:
Present: ARMSTRONG, KASS, & FINE, JJ.
CIVIL ACTION commenced in the City of Boston Division of the Housing Court Department on January 18, 1984.
The case was reported to the Appeals Court by Patrick J. King, J.
James A. Scanlon for the defendants.
Kurt M. Pressman for the plaintiff.
the Cairas’ failure to place the deposit in a separate escrow account within thirty days of receipt, as required by Section 15B (3) (a). The Cairas did not pay or offer to pay interest to the plaintiff on the security deposit. Fourteen months after receiving the deposit, the Cairas sold the real estate to a new owner and transferred to him the security deposit together with the accrued interest. Neither the Cairas nor the new owner gave the plaintiff the notification required by Section 15B (5). Two months later the plaintiff brought this action. He continued to occupy the premises, both then and at the time of trial.
In considering the relationship between the subsection (3) (a) remedy and that of subsection (7), neither of the parties nor, by implication, the judge has taken the position that the remedies are cumulative: i.e., that the tenant could be entitled both to the return of the deposit and, in addition, to the treble-damages remedy. Without express guidance in the statute, courts are reluctant to infer a legislative intention to permit such a cumulation of remedies. McGrath v. Mishara, 386 Mass. 74 , 84-85 (1982).
(7) might be moderated where a landlord may have committed a technical violation but was acting in good faith, McGrath v. Mishara, 386 Mass. at 80, were rejected in Mellor v. Berman, 390 Mass. 275 , 280-283 (1983). Thus, it also seems improbable, in the absence of express language to that effect in Section 15B, that the treble damage remedy would be ruled unavailable to a tenant who remains in possession, unless it proved impossible to reconcile the remedial provisions of subsection (3) (a) and subsection (7) without implying such a limitation.
(d), and (e) — involve a failure by the landlord to comply with his duties in handling the tenant’s security deposit money. Paragraph (a) is a failure to deposit it in a separate bank account, as required by subsection (3) (a); par. (d) involves a failure to transfer the security deposit money to the landlord’s successor in interest when he transfers title to the premises, as required by subsection (5); and par. (e) involves a failure to return the deposit, or so much thereof as the tenant may be entitled to, to the tenant at the termination of the tenancy, as required by subsection (4). These breaches in the handling of the deposit expose the landlord, under subsection (7), to the potential of a treble damage recovery, together with interest, costs, and attorney’s fees. Hampshire Village Associates v. District Court of Hampshire, 381 Mass. at 152. Jason v. Jacobson, 387 Mass. 21 , 21 n.2 (1982). Mellor v. Berman, 390 Mass. at 279 & n.7. The two remaining violations set out in subsection (6), (b) and (c), do not involve mishandling of the tenant’s deposit money and do not expose the landlord to the possibility of treble damages but only entitle the tenant to a return of the deposit.
landlord refuses to acknowledge his error and return the deposit, thus forcing the tenant to employ legal process to vindicate his rights, the landlord will be liable for treble damages, interest, costs, and attorney’s fees. The purpose of subsection (7) is not to pillory the landlord, but to make resort to litigation feasible for the tenants. Without subsection (7), normally “the legal expense of chasing a security deposit would be more than the amount of the deposit.” Hampshire Village Associates v. District Court of Hampshire, 381 Mass. at 153, and Mellor v. Berman, 390 Mass. at 282, both quoting from Goes v. Feldman, 8 Mass. App. Ct. 84 , 91 (1979). Where the landlord discovers or acknowledges his error and returns the deposit, and the tenant is not forced to resort to litigation to vindicate his rights, the multiple damages and attorney’s fees provisions of subsection (7) have no application. As thus understood, the purpose of Section 15B is seen not to be arbitrarily penal; rather, “the underlying goal [is to establish] an `equitable relationship'” between tenants and landlords. McGrath v. Mishara, 386 Mass. at 85.
We thus see no inconsistency between the provisions of subsections (3) (a) and (6) (a), on the one hand, both calling for a return of the deposit, and subsection (7) on the other, calling for treble damages and attorney’s fees. The former envision compliance by the landlord without the necessity for litigation. The latter envisions making the remedy by litigation financially feasible, and thus efficacious, where the landlord refuses to return the deposit on demand after failing to establish the separate account within thirty days.
the transfer of the security deposit to the owner, there having been no compliance with any of the relieving provisions ([a], [b], or [c]) of that subsection. The judge’s findings do not indicate whether the plaintiff sought a return of his deposit prior to bringing this action; but the commencement of the action itself would, in accordance with contract law, operate as a demand. Farmers Natl. Bank v. Venner, 192 Mass. 531 , 535 (1906). Cormier v. Brock, 212 Mass. 292 , 295 (1912). Geffen v. Paletz, 312 Mass. 48 , 49 (1942). 3A Corbin, Contracts Section 643, at 76-77 (1960). Cf. Warren v. ball, 341 Mass. 350 , 354 (1960); Teletransmissions, Inc. v. David, 5 Mass. App. Ct. 864 , 864-865 (1977). There is no finding of a tender promptly thereafter; rather, it has been the Cairas’ position that the tenant must seek a return of the deposit from the new owner. [Note 6] Therefore, there has been a violation of subsection (6) (a), and the Cairas, despite having transferred the security deposit to their successor, are liable to the tenant for treble damages, interest, costs and attorney’s fees, in accordance with the provisions of subsection (7).
the principle applied in Mellor v. Berman, 390 Mass. at 284, we decline to assess appellate attorney’s fees or costs. So ordered.
[Note 2] This action was commenced in 1984 (at which time the security deposit had not been returned to the tenant) prior to the effective date of the amendments to Section 15B effected by St. 1983, c. 645. The principles applicable to the case would not be altered by the 1983 amendment or by St. 1984, c. 170, Section 2A, which retroactively restored Section 15B (5), which is involved in the present case, to the form it had prior to the 1983 amendments. Section 15B was also amended by St. 1981, c. 92, which added Section 15B (9), not involved in the present case.
[Note 4] A construction that avoids any redundancy between subsection (6) (a) and the last sentence of subsection (3) (a) does not seem possible. To say that the landlord “forfeit[s] his right to retain . . . the security deposit” (subsection ) is the same as to say that “the tenant [is entitled] to immediate return of the security deposit” (subsection  [a]). There is no similar redundancy with respect to pars. (b), (c), (d), or (e). Possibly the draftsman simply intended, for convenience sake, to group in subsection (6) all violations which would result in the landlord’s losing the right to hold the deposit. More likely, there was a reason to retain the last sentence of subsection (3) (a): The forfeiture under subsection (3) (a) may be broader than that under subsection (6) in that both mandate forfeiture if the landlord fails to establish the separate account, but subsection (3) (a) goes further to mandate forfeiture where the landlord’s sole transgression lies in failing to give the tenant a conforming receipt within the specified time. By inference the latter could be regarded less seriously than a failure to establish the separate account itself and be thought not to justify potential exposure to the more sweeping penalty provisions of subsection (7) — exposure that would result from incorporating in subsection (6) (a) both of the duties imposed on the landlord by subsection (3) (a).
[Note 6] Because the new owner is not a party to this litigation, we do not decide what rights an original landlord might have against a new owner, upon either returning the security deposit to a tenant or paying treble damages to the tenant.

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