New York security deposit laws limit how much a landlord can collect, require deposits to be handled as trust funds, and set deadlines for returning money after a tenancy ends. Knowing the rules can help tenants protect their funds and respond when a landlord claims deductions. The details may vary with the type of rental, including whether a building is owner-occupied or rent-regulated, so tenants should check which provisions apply to their situation.
How Much Can a Landlord Charge?
For most residential rentals in New York, a landlord may collect no more than one month’s rent as a security deposit. This limit comes from New York’s Housing Stability and Tenant Protection Act of 2019 and applies to rentals across the state, including New York City. A landlord generally cannot get around the cap by calling extra security a “cleaning fee,” “last month’s rent,” or another label.
A deposit is separate from rent. A landlord may collect rent due under the lease, but cannot require an additional month of rent as security on top of the one-month deposit limit. Tenants should ask for an itemized receipt or written record identifying any payment collected and what it covers.
There can be different rules for certain arrangements, such as some seasonal rentals, hotels, and housing outside the usual residential landlord-tenant relationship. Owner-occupied buildings with six or fewer units are also excluded from some key security-deposit requirements under New York law. Because exceptions can turn on the property and tenancy, a tenant should not assume every protection applies identically to every rental.
How Landlords Must Hold Security Deposits
New York law treats residential security deposits as trust funds belonging to the tenant, not as the landlord’s ordinary operating money. A landlord generally must keep the deposit in a New York bank account separate from personal or business funds. The landlord cannot use it as their own money while the tenancy continues.
For a building with six or more dwelling units, the landlord must place deposits in an interest-bearing account at a New York banking organization. The landlord must notify the tenant in writing of the bank’s name and address and the amount of the deposit. The tenant is entitled to the interest, less a permitted administrative fee of up to 1% of the deposit per year. The landlord may also apply the interest toward rent or pay it to the tenant, as allowed by law.
In buildings with fewer than six units, the rules requiring an interest-bearing account and interest payments generally do not apply. However, the trust-fund requirement remains relevant where the statute applies. Tenants can review the lease and request written confirmation of where a deposit is held if the landlord has not provided the required information.
Rules for Rent-Regulated Apartments
Rent-stabilized and rent-controlled apartments are subject to the same general one-month security-deposit limit. A landlord cannot demand a larger deposit simply because an apartment is rent-regulated. A rent-regulated tenant may also have specific protections concerning rent and lease terms; deposit questions can be checked with the New York State Division of Housing and Community Renewal (DHCR).
When a rent-regulated apartment changes tenants, a new deposit should not be based on an amount greater than one month of the lawful rent that may be charged to the incoming tenant. Existing deposits and interest may require separate accounting. Tenants should keep lease renewals, rent records, and deposit receipts, particularly when the apartment has a long rental history.
When a Landlord Can Make Deductions
A security deposit is not a general fund for routine upkeep or ordinary turnover costs. A landlord may generally deduct for unpaid rent or damage beyond reasonable wear and tear, subject to the lease and applicable law. Examples of potentially chargeable damage may include a broken fixture caused by the tenant or a large hole in a wall. Faded paint, minor scuffs from normal use, and ordinary aging generally are not tenant-caused damage.
New York law also restricts charges for routine cleaning and repairs that are part of a landlord’s legal obligations. A tenant should leave the apartment in reasonably clean condition, remove personal property, and document its condition at move-out. Photos or video taken before and after the tenancy can help distinguish pre-existing conditions and normal wear from damage that occurred during occupancy.
Landlords should be able to explain deductions and support them with an itemized statement. Tenants can ask for invoices, receipts, photographs, or other records that show the work performed and its cost. A charge should reflect a reasonable expense rather than an upgrade that leaves the landlord with a better unit than before.
Move-Out Inspections and Notice
In many residential rentals covered by New York’s inspection provisions, a tenant may request a pre-move-out inspection. The landlord must give written notice of the tenant’s right to request one, generally after either party gives notice that the tenancy will end. If the tenant requests an inspection, it must take place within the statutory period before the tenancy ends, with at least 48 hours’ notice of the inspection time.
After the inspection, the landlord must provide an itemized statement of repairs or cleaning that could lead to deductions. The tenant then has an opportunity to address the listed conditions before moving out. This process can prevent surprises, though it does not guarantee that no deduction will be made if damage or unpaid rent remains.
These inspection requirements have statutory exceptions, including for some owner-occupied buildings with six or fewer units. Tenants should check whether the building is covered and keep copies of any inspection notice, request, and proposed itemization.
The 14-Day Deadline to Return a Deposit
For covered residential tenancies, a landlord must return the security deposit within 14 days after the tenant vacates. If the landlord keeps any portion, the landlord must provide an itemized statement explaining the deductions within that same 14-day period. The deadline makes it important for tenants to provide a reliable forwarding address and preserve proof of the date they surrendered the apartment.
If a landlord misses the deadline, New York law generally bars the landlord from keeping any part of the deposit, regardless of the reason for the proposed deduction. This does not automatically resolve every dispute or guarantee immediate payment; a tenant may still need to request the funds or bring a legal claim. The law also provides for potential punitive damages when a landlord’s violation is willful, as determined through the legal process.
The statutory deadline may not apply to every rental arrangement. In particular, some requirements have exceptions for owner-occupied buildings with six or fewer units. Tenants in such buildings should verify the applicable rule rather than relying on the 14-day requirement without checking coverage.
What Happens When a Rental Property Is Sold?
A change in ownership does not normally erase the tenant’s right to the security deposit. New York law generally requires the outgoing landlord to transfer the deposit to the new owner or return it to the tenant. The tenant should receive notice identifying the new owner or the party responsible for holding the deposit.
When a building is sold, tenants should keep the sale notice, lease, deposit receipt, and any communication about the transfer. If the new owner claims no deposit was received, the tenant’s records can help establish the amount paid and identify the prior landlord. Tenants should not pay a second deposit merely because ownership changed without first confirming the legal basis for the request.
Steps Tenants Can Take to Protect a Deposit
- Keep written records: Save the lease, payment confirmation, move-in checklist, inspection reports, and messages about repairs.
- Document the apartment: Take dated photos or video at move-in and move-out, including appliances, floors, walls, and fixtures.
- Give a forwarding address: Send it in writing and keep proof of delivery or a copy of the message.
- Request an inspection: If the apartment is covered, ask for a pre-move-out inspection and respond to the itemized list.
- Return keys and remove belongings: Confirm the surrender date in writing and keep a record of key return.
- Review deductions promptly: Compare the itemized statement with the apartment’s condition and request supporting documentation.
How to Dispute an Improper Deduction
A tenant who believes a deposit was wrongfully withheld can begin with a concise written demand. The letter should state the deposit amount, move-out date, forwarding address, and the amount being requested. It can also ask for the itemized deduction statement and copies of supporting receipts or invoices. Keeping the tone factual and retaining proof that the demand was sent can help if the dispute continues.
If the landlord does not resolve the issue, tenants may consider filing in small claims court, where eligible money disputes can be heard without the formal procedures of higher courts. The applicable monetary limit depends on the court and location. Tenants should bring the lease, proof of payment, move-out evidence, the landlord’s itemization, and copies of all relevant correspondence.
New York tenants can also contact the New York State Attorney General’s consumer resources for general information. In New York City, 311 can direct renters to local housing assistance and legal-service resources. Rent-regulated tenants can contact DHCR for questions about regulated rent and related protections. These agencies can provide guidance, but a court may be needed to order repayment in an individual dispute.
Key New York Security Deposit Rules at a Glance
| Issue | General Rule |
|---|---|
| Maximum deposit | Usually no more than one month’s rent for a residential tenancy |
| Handling funds | Security money is held in trust, not treated as the landlord’s personal funds |
| Interest | Generally required for deposits in buildings with six or more units, subject to a permitted administrative fee |
| Permitted deductions | Generally unpaid rent and tenant-caused damage beyond reasonable wear and tear |
| Return deadline | For covered tenancies, within 14 days after the tenant vacates, with an itemized statement for deductions |
| Important exception | Some requirements do not apply to owner-occupied buildings with six or fewer units |
New York security deposit protections are strongest when tenants keep clear records from move-in through move-out. The one-month cap, trust-account rules, deduction limits, and 14-day return deadline provide a framework, but coverage exceptions matter. When a dispute involves a significant amount or unusual rental arrangement, checking the current statute or consulting a New York tenant attorney can clarify the next step.