Real Estate Accounting in Boston
Massachusetts has the strictest security deposit regime in the country, and it has changed behaviour: many Boston landlords now decline to take a deposit at all and collect last month's rent instead. Those are different instruments and they are not accounted for the same way.
Proud AppFolio Stack™ Partners, working directly inside your AppFolio instance.
Massachusetts rules that apply here
- Deposit return deadline
- 30 calendar days
- Statute
- M.G.L. c.186 s.15B
Why Massachusetts Real Estate Professionals Choose REA
AppFolio Expertise, Applied to Boston
Experts in AppFolio Bookkeeping
A security deposit is the tenant's money held in trust. Last month's rent is prepaid rent, a liability that converts to revenue in a specific future month. Recording last month's rent as a deposit leaves revenue permanently understated and a liability that never clears; recording a deposit as prepaid rent recognises income that was never earned and breaks the trust reconciliation. In a Boston portfolio where different units were let on different terms over the years, both errors are usually present at once.
Assigned, Responsive Team
The reason so many landlords avoid deposits here is worth understanding, because it drives the structure. Massachusetts requires the deposit to sit in a separate interest-bearing account at a Massachusetts bank held in the tenant's name, with a receipt disclosing the bank and account number, plus a signed statement of condition early in the tenancy. Failing to use a qualified separate account, failing to return or itemise within 30 days, or failing to transfer the deposit when the property is sold each expose the landlord to treble damages plus interest, costs and attorney fees.
Accurate Monthly Bookkeeping
That third trigger catches people. A deposit does not stay with the seller on a sale, it transfers to the new owner, and a transaction closed without moving the deposit correctly creates treble damage exposure for a portfolio the seller no longer owns. We treat deposit transfer as a closing item with its own reconciliation rather than a post-closing cleanup.
Deposit Compliance for Boston Portfolios
M.G.L. c.186 s.15B
Massachusetts operates the strictest deposit regime in the country. The deposit must be returned, or a compliant itemised statement provided, within 30 days of the tenancy ending, with 5 percent annual interest or the actual interest earned, whichever is less. THREE failures each trigger TREBLE damages plus interest, costs and attorney fees: not holding the deposit in a qualified separate interest-bearing account, not returning or itemising within 30 days, and not transferring the deposit to a new owner when the property is sold.
The deposit must sit in a SEPARATE interest-bearing account at a Massachusetts bank, held in the tenant's name, with a receipt to the tenant identifying the bank and account, plus a signed statement of condition early in the tenancy. This is not a single pooled trust account with a spreadsheet behind it, and an operating account holding deposits is a treble damages exposure before any dispute exists.
All Massachusetts requirementsHow we keep you inside it
- Deposit liabilities tracked per tenant in AppFolio, so a 30 calendar days deadline is answerable from the ledger
- Trust accounts reconciled three ways every month
- Deduction documentation recorded against the correct ledger
- Aging deposits flagged before the statutory window closes
Appfolio Bookkeeping Services from REA
Available to Boston Operators
Trust Bookkeeping
Leverage Appfolio's powerful bookkeeping capabilities with REA's tailored service.
See how it worksCorporate Bookkeeping
REA's skilled team, in combination with Appfolio's comprehensive toolset, addresses the complexity of your corporate financial activities.
See how it worksBank Reconciliations
Employing Appfolio's state-of-the-art system, REA offers bank reconciliation services that brings meticulous accuracy to your finances.
See how it worksFinancial Diagnostic Cleanup
REA utilizes Appfolio's advanced diagnostic tools to swiftly and effectively troubleshoot financial anomalies.
See how it worksTrust Compliance
REA pairs its accounting prowess with Appfolio's detailed reporting to deliver comprehensive Trust Compliance Verification services.
See how it worksAppFolio Accounting & Bookkeeping Services
For Boston Portfolios
- Process Review & Set Up
- Bank Reconciliations
- AP / AR
- Accurate NOI, Balance Sheets
- Recording HUD's & Accruals
- Owner Distributions
- Monthly Statements & Reports
- Management Fees
- Corporate Bookkeeping
- Tenant Chargebacks
Take the Whole Close, or One Function
Boston operators use REA for the full monthly close or for the single function that has become a bottleneck. Each one is performed inside your AppFolio instance.
Trust Accounting
Compliant, audit-ready trust funds
Learn moreBank Reconciliation Services
Three-way reconciliation, every account
Learn moreAccounts Payable & Receivable
Bills paid, rent collected, owners paid
Learn moreBookkeeping Cleanup & Catch-Up
Back books fixed and current
Learn moreCAM Reconciliation
Annual commercial true-ups
Learn moreExperts In All Property Types
- Single-Family
- Multifamily
- Student Housing
- Affordable Housing
- Community Associations
- Commercial
Experts In All Property Types
Residential, commercial and everything in between. The asset class changes what the books have to prove, and our teams are staffed accordingly.
- Single-Family
- Multifamily
- Student Housing
- Affordable Housing
- Community AssociationsSee the page
- CommercialSee the page
Check Out What Our Clients Have To Say About Us
Property Managers, Investors & Owner Operators
Real Estate Accounting truly is a special company. They helped as if they were a part of our company, with the concern and caution as an employee would have, but even more. They quickly ascertained our needs and developed an effective team to help with our accounting needs. They were extremely responsive and always accurate. I would recommend their services to anyone who needs help with their property management accounting.
Adam the owner took a personal interest in my situation and was willing to work with me to see if his company was a good fit. I may be too small for them but I would highly recommend them to anyone considering a bookkeeper for their property management business.
Following a series of erroneous financials from my previous bookkeeper, who lacked expertise in real estate, it's been truly remarkable to receive not only accurate financials on a consistent basis but also proactive advice without prompting. The REA team is a game-changer in real estate accounting!
Frequently Asked Questions
Should we take a security deposit or last month's rent?
That is a legal and risk question for your counsel, but they are accounted for completely differently. A deposit is trust-held tenant money; last month's rent is prepaid rent that becomes revenue in a specific month. We make sure the books reflect whichever you actually took.
What triggers treble damages in Massachusetts?
Three things in particular: not holding the deposit in a qualified separate interest-bearing account, not returning it or providing a compliant itemised statement within 30 days, and not transferring the deposit to the new owner when the property is sold.
What happens to deposits when we sell a building?
They transfer to the new owner, and getting that wrong is one of the treble damage triggers. We handle it as a closing item with its own reconciliation rather than something to tidy up afterwards.
More in Massachusetts
Other Massachusetts markets, the platforms we work in, and the functions available on their own.
AppFolio Bookkeeping for Boston
Schedule a call and we will review your AppFolio setup, your Massachusetts deposit handling, and what it takes to close clean every month.