New York Security Deposit Laws in 2024

Overview of Security Deposit Laws in New York

A security deposit is an upfront payment made by a renter to a landlord to cover any potential damages or unpaid rent. Landlords in New York can legally charge up to 1 month's rent for an unfurnished apartment and up to 2 month's rent for a furnished apartment as a security deposit. 

The purpose of security deposits is to give landlords peace of mind that any damages beyond normal wear and tear or unpaid rent can be covered by the deposit. If a tenant moves out and leaves the unit undamaged and paid up, the landlord must return the full deposit within 14 days. However, the landlord can withhold part or all of the deposit if there are damages or unpaid rent that exceed the deposit amount.

Security deposits cannot be used by tenants to pay the last month's rent in New York. The deposit is solely intended to cover damages and unpaid rent, not normal rental payments. Landlords also cannot require additional security deposit payments when the rent increases - the original deposit amount should sufficiently cover damages regardless of changes to the rent.

Security Deposit Rules in New York

Section 7-103 of the New York General Obligations Law outlines the requirements for security deposits in rental agreements in New York. This law provides certain protections for tenants and responsibilities for landlords when dealing with security deposits.

Some key provisions of Section 7-103 include:

• Landlords cannot demand a security deposit that is more than 1 month's rent for an unfurnished apartment or 2 month's rent for a furnished apartment.
• Landlords must return the full security deposit to the tenant within 14 days after the tenant has moved out. This applies as long as the tenant has not caused damage beyond normal wear and tear.
• If the landlord is keeping any portion of the deposit for damages, they must provide the tenant with an itemized list of deductions within 14 days.
• Landlords must notify tenants of the bank where the security deposit is held if it is over $500 and in an interest-bearing account. 
• Tenants have the right to inspect the property within 5 days of vacating to assess any damages. This helps prevent unfair deductions.
• If landlords fail to comply with these rules, tenants may recover twice the security deposit in damages in a legal case.

So in summary, Section 7-103 sets limits on security deposits, requirements for prompt refunds, and penalties if landlords wrongly withhold deposits. This helps protect tenant rights regarding security deposits in New York.

How Much Can a Landlord Charge for a Security Deposit in New York?

In New York, landlords are allowed to charge up to 1 month's rent for an unfurnished apartment as a security deposit. For a furnished apartment, landlords can charge up to 2 month's rent as a security deposit. 

The 1 or 2 month's rent limit applies statewide, including in New York City. Landlords cannot require additional security deposit payments beyond this even if the rent increases. The original security deposit paid should be sufficient to cover any potential damages.

There are a few exceptions where landlords may require deposits above 1 or 2 month's rent:

• If pets are allowed, an additional pet deposit can be charged, typically up to 1 month's rent. This is refundable when the tenant moves out without pet damages.
• For short-term rentals less than 1 year, landlords can collect a security deposit up to 6 month's rent. This applies to furnished seasonal rentals. 
• If utilities are included in the rent, the landlord may require an additional deposit for these services. Typically no more than 1 or 2 month's extra rent.

Aside from these exceptions, the general rule remains that landlords can only collect 1 month's rent for an unfurnished apartment or 2 month's for a furnished unit. Charging any additional nonrefundable fees outside of the security deposit is illegal in New York.

Returning the Security Deposit in New York

Landlords in New York are required to return security deposits within 14 days after the tenant has moved out of the apartment and their lease has ended. This 14 day timeline applies regardless of whether the landlord plans to deduct any amount from the deposit or return it in full. 

If the landlord retains any portion of the security deposit for damages, they must provide the tenant with an itemized statement of the costs and damages for which the deposit is being used within the same 14 day timeframe. This statement should list each repair or cost that the landlord incurred, along with dollar amounts and receipts if available. 

If the landlord fails to return the full security deposit or provide an itemized deduction statement within 14 days, they are considered in violation of New York law. Tenants may have grounds to take legal action against the landlord to recover their full deposit. Potential consequences for the landlord can include:

• Having to return the full security deposit, even if legitimate damages occurred
• Paying the tenant 2-3 times the amount of the security deposit in damages  
• Covering the tenant's legal fees related to recovering the deposit
• Tenants can file a claim in small claims court without needing a lawyer

Therefore, it is essential that landlords follow the proper security deposit return procedures within the 14 day timeline to avoid potentially serious legal and financial consequences in New York.

What if the Landlord Does Not Return My Security Deposit?

If the landlord does not return your security deposit or provide an itemized list of damages and deductions within 14 days of moving out, they are in violation of New York law. Here are the steps tenants can take to get their deposit back:

Send a Formal Letter Requesting Return of Full Deposit

The first step is to send your landlord a formal letter via certified mail requesting the return of your full security deposit within 7 days. Outline in the letter that under [Section 7-103 of New York law](https://www.nysenate.gov/legislation/laws/GOB/7-103), they are required to return your deposit within 14 days or provide an itemized list of any damages or deductions. State that failure to do so means they have relinquished their right to withhold any of the deposit. 

File a Claim in Small Claims Court

If the landlord still does not comply after receiving your letter, you can take them to small claims court. You can sue for return of your full security deposit as well as up to twice the amount of the deposit in damages. Gather all your documentation including the lease, letters requesting the deposit, and photos of the apartment condition when moving out. The maximum amount you can sue for in small claims court in New York is $5,000, which covers most security deposit disputes.

Damages Tenants Can Recoup

If you win your small claims case against the landlord, you can recoup:

• Full security deposit amount
• Up to 2x the deposit in punitive damages  
• Court filing fees
• Interest on the deposit (if not already paid annually)
• Up to $1,000 in attorney's fees 

By taking legal action, tenants can force noncompliant landlords to return wrongfully withheld security deposits. Make sure to formally request the deposit in writing first, then use small claims court to recover your deposit plus additional damages if needed.

Security Deposits and Rent Increases

When the rent for an apartment goes up, either at lease renewal or during a month-to-month tenancy, landlords cannot require tenants to pay an additional security deposit to cover the rent increase. The original security deposit paid at the beginning of the tenancy is expected to sufficiently cover damages regardless of normal rent increases over the course of the tenancy. 

Landlords in New York are prohibited from charging additional security deposits or fees when the rent goes up. The original security deposit converts to the new rent amount. For example, if the original security deposit was $1,000 for a $2,000 monthly rent, and the rent increases to $2,200, the $1,000 deposit simply converts to cover the new higher rent. The landlord cannot require the tenant to pay an additional $200 to bring the deposit amount to match 1 month's rent under the increase.

Some exceptions may apply in cases of significant rent increases well above normal percentages, such as 50% or double the original rent amount. However, in general, New York landlords cannot demand more security deposit funds when the rent goes up during an existing tenancy. The original security deposit paid at the beginning of the tenancy should sufficiently cover damages regardless of future rent increases.

Interest on Security Deposits in New York

In New York, landlords are not required to pay interest on security deposits. This differs from some other states that mandate interest payments on deposits. 

New York law does not specify that security deposits must be held in interest-bearing accounts. Landlords can hold deposits in any account of their choosing.

Without a legal requirement, most New York landlords do not pay interest on security deposits. Tenants are not entitled to receive interest earnings on their deposit.

The interest rate on security deposits, when paid, is not defined in New York law. There are no set calculations that landlords must follow. Typically, landlords will pay minimal interest, if any.

While tenants have no legal right to interest under New York law, they can try negotiating for interest payments in the lease agreement. This gives tenants recourse if the landlord agrees but fails to pay interest.

Absent a lease provision, tenants have no recourse to claim interest on their security deposit from a landlord in New York. Landlords are permitted to retain any interest earned on the funds.

Using the Security Deposit as Last Month's Rent

Tenants cannot use the security deposit to pay the last month's rent in New York. The security deposit is intended to cover any damages or unpaid rent after move out, not as a prepayment for rent. 

If a tenant deducts the security deposit from their final month's rent, the landlord can take legal action. The tenant would still owe the full last month's rent and could face eviction proceedings for nonpayment. The landlord could also refuse to return the security deposit since it was not used for its lawful purpose.

Tenants should be sure to pay their full rent each month during the lease term. The purpose of the security deposit is solely to have funds available for the landlord to cover damages left behind after move out. Using it instead of paying rent leaves the tenant vulnerable to eviction and losing their deposit.

Nonrefundable Deposits in New York

Section 7-107 of the New York General Obligations Law prohibits landlords from charging any nonrefundable fees for things like cleaning, repairs, or keys. All security deposits in New York must be fully refundable at the end of the lease term.

Some landlords may try to skirt this law by calling the security deposit a "move-in fee" or other misleading name. They may also include language in the lease stating the deposit is nonrefundable. However, these practices are illegal according to Section 7-107.

If a landlord charges a nonrefundable fee or refuses to refund a security deposit, the tenant has several options:

• Send a formal letter requesting return of the full deposit within 7 days. Reference Section 7-107 in the letter and state you will take legal action if it is not returned.
• File a complaint with the New York State Division of Housing and Community Renewal (DHCR). The DHCR helps resolve issues between landlords and tenants.
• Take the landlord to small claims court. You can sue for return of up to $5,000 in small claims court without needing a lawyer in New York. Bring documentation showing the nonrefundable fee and copies of any letters you sent the landlord.
• Report the landlord to the New York State Attorney General's office for violating rental laws.

Tenants have the right to challenge illegal nonrefundable fees and security deposit policies in New York. Knowing the law and promptly taking action can help tenants recover their full security deposit.

Seasonal Rentals and Security Deposits

The security deposit laws in New York apply equally to tenants renting seasonal properties like summer beach houses or winter ski cabins. Landlords of short-term vacation rentals must follow the same rules outlined in the state's General Obligations Law when it comes to security deposits.

The one month rent limit on security deposits applies regardless of whether the rental period is for a full year, a summer season, or just a weekend. Landlords cannot require a larger security deposit simply because the rental period is shorter.

Additionally, seasonal landlords must return security deposits within 14 days after the tenant vacates the property, just as with a year-round rental. There are no exceptions that allow keeping the deposit for longer because it's a vacation property. 

The provisions around providing tenants an itemized list of damages also apply to seasonal rentals. If keeping any part of the security deposit, the landlord must document what the deductions were for within the 14 day window after move out.

In summary, New York lawmakers have not created different security deposit rules for short-term vacation rentals versus standard year-round rentals. The same tenant protections exist regardless of the length of the rental agreement. Tenants renting a cabin for a long weekend have the same legal rights when it comes to security deposits as those renting an apartment all year.

Frequently Asked Questions

What is the security deposit rule in New York?

In New York, landlords can collect up to one month's rent as a security deposit, regardless of the length of the lease. The deposit must be returned to the tenant within 14 days of vacating the property, along with an itemized statement covering any deductions made.

What to do if a landlord doesn't return the security deposit in New York?

If a landlord in New York fails to return the security deposit within 14 days after you vacate, you can send a written request for the deposit. If it's still not returned, you may file a claim in small claims court or seek legal assistance to recover the deposit.

Can a landlord keep a security deposit for breaking a lease in New York?

Yes, in New York, if a tenant breaks the lease, the landlord may keep part or all of the security deposit to cover unpaid rent or other losses directly resulting from the lease break. However, landlords are also required to mitigate damages by attempting to re-rent the unit.

Can landlords charge a security deposit for painting and cleaning in New York?

Landlords in New York can use the security deposit for cleaning and painting only if it's necessary to restore the rental unit to the same condition as when the tenant moved in, beyond normal wear and tear. Landlords cannot use the deposit for routine painting and cleaning if the tenant has lived in the dwelling for a long time.

What are my rights as a tenant in New York state?

As a tenant in New York State, you have rights to a habitable environment, repairs conducted in a timely manner, protection against retaliation, and the right to privacy. New York law also provides tenants with protection against unlawful evictions, requiring landlords to follow a legal process and provide proper notice.

Can I use my security deposit as last month's rent in New York?

No, in New York, tenants are generally not allowed to use their security deposit as the last month's rent unless specifically agreed to by the landlord. Using the security deposit for rent without the landlord’s consent can lead to penalties or legal action.