In almost every lease or rental agreement, there is a requirement that the tenant pays a security deposit to the landlord before the start of the rental term. Landlords and tenants often disagree over the amount of the deposit that should be returned to the tenant at the end of a rental term. Landlords are required to inform tenants of the reason any amount of the security deposit is not being returned by providing an itemized list of deductions within fourteen (14) days of the tenant moving out. If the landlord does not return a portion of the security deposit and does not provide an itemized list articulating the reason for the deduction, tenants should request one, as the landlord must inform the tenant of any withholding. Additionally, a landlord may try to charge a tenant other fees and deposits under the rental agreement that are against the law.
If a landlord withholds an amount from the security deposit that they are not entitled to, the tenant may need to file a claim in small claims court or another court to get the security deposit back.
Under New York State law, it is unlawful for your landlord to charge certain deposits or fees, or for deposits or fees to exceed a specific amount.
Under New York State law, a landlord is not allowed to charge or collect:
Please refer to New York General Obligations Law § 7-108 (security deposits), New York Real Property Law § 238-a (other fees), and New York Real Property Law § 235-i (key fees).
A tenant is entitled to use various methods to pay rent. According to NY CLS Real P § 235-g, a landlord cannot require a tenant to use an electronic billing or payment system as the sole method for paying rent, nor can they charge a fee for choosing not to use such a system. Additionally, upon receiving rent payments in cash or any instrument other than a personal check, the landlord must provide a written receipt. A landlord can contract out of paying a broker’s commission as long as it is clearly outlined in the lease or brokerage contract.
Tenants in New York can pay rent using cash, certified checks, money orders, and personal checks, and they cannot be compelled to use electronic payment systems exclusively.
A landlord can contract out of paying a broker’s commission as long as it is clearly outlined in the lease or brokerage contract. The liability of the broker fee can be outlined in the contract signed by the parties. Contracting around or into obligations can generally be done by two sophisticated parties.
As stated above, a landlord may not charge or collect any deposit or advance greater than the amount of one-month’s rent. Therefore, if a landlord collects a security deposit equal to one-month’s rent, they cannot also charge the tenant a rent advance, such as “last-month’s rent.” A security deposit cannot be used to pay rent, except for any unpaid rent due and owed after a tenant moves out. Additionally, a landlord cannot request a non-refundable security deposit; this is unlawful and any agreement accepting it is void.
After a tenant moves out, the security deposit must be returned to the tenant within 14 days. If any amount has been deducted from a deposit, the landlord must send the tenant an itemized list of these deductions within the same 14-day period. Deductions are only lawful for:
If a landlord does not return the deposit or provide an itemized list of deductions within the 14-day period, the landlord forfeits any right to keep the deposit, regardless of how damaged the apartment is or how much rent may be owed, and must return the entire amount to the tenant. Tenants may bring a claim in Small Claims Court to recover the security deposit from the landlord. Please refer to New York General Obligations Law § 7-108.
If a property has six or more rental units, the landlord must place the security deposit in an interest-bearing account and return any interest earned on the deposit to the tenant. In this situation, the landlord is allowed to keep one percent (1%) of the total amount of the deposit as an “administrative fee.” Please refer to New York General Obligations Law § 7-103.
A landlord CAN withhold or deduct from a tenant’s security deposit for:
A landlord CANNOT withhold or deduct from a tenant’s security deposit for:
Effective June 14, 2019, the Housing Stability and Tenant Protection Act of 2019 eliminated a landlord’s ability to withhold a portion of a residential tenant’s security deposit for attorneys’ fees or late fees. See General Obligations Law § 7-108(1-a)(b).
Remember, even if your landlord is deducting from your security deposit for a legitimate reason, they must give you an itemized list of any deductions within 14 days of your move-out, or else they must return your full deposit.
A landlord shall not charge a tenant a fee for the reproduction of keys to a single dwelling greater than one hundred ten percent of the actual cost of reproduction, provided such limitation shall not apply if a tenant requires the reproduction of keys for a single dwelling more than three times in a calendar year.
Disagreements between tenants and landlords over security deposits are very common. It is important for tenants to document the condition of the rental unit before moving in and moving out.
Landlords are required to offer an inspection of the rental unit before a tenant moves in. It is best to ask for an inspection if a landlord doesn’t offer one. After the inspection, the landlord must create a written agreement listing any damages that existed before the tenant moved in. Landlords may not deduct costs associated with conditions that existed prior to move-in.
It is important to carefully inspect the apartment. You may want to use a checklist and take pictures and videos of any damage or defects. Inspect the entire rental unit, including but not limited to:
Any notes, photos, and videos should be included in a written agreement with your landlord. Landlords may have a standard form or checklist they regularly use for these inspections. If a landlord already has a form or checklist, it is important to add any additional damages or defects that might not be covered by their form. Taking these steps may help protect a tenant from improper charges to their security deposit when they move out.
A tenant is also entitled to a move-out inspection if the landlord has at least two weeks’ notice of the date the tenant is moving out. The landlord is required to notify the tenant in writing of their right to request an inspection. The inspection should happen one to two weeks before the move-out date. After the inspection, the landlord is required to create an itemized list of any damages they intend to charge for, giving the tenant an opportunity to fix them before leaving. If the landlord does not offer the inspection, the tenant may request it themself.
Again, a landlord must return a security deposit or provide an itemized list of any charges within 14 days after the tenant has moved out. Failure to do so may result in the forfeiture of the entire security deposit. Please refer to New York General Obligations Law § 7-108.
If a landlord wrongfully withholds a security deposit or fails to provide an itemized list within 14 days, the first step a tenant should take is to send a demand letter. The letter should inform the landlord of the wrongful withholding and state that the tenant will sue in small claims court if the funds are not returned by a certain date.
If a landlord refuses to return a security deposit, mediation is an option. Ithaca tenants can use the Community Dispute Resolution Center for assistance. For more information, visit https://www.cdrc.org/.
Finally, tenants can sue landlords in small claims court. In these lawsuits, the landlord has the burden to prove that the amounts withheld are reasonable. If a tenant wins, a judge can award punitive damages of up to twice the amount of the security deposit if the landlord’s violation is found to be willful.
Successors in interest (new property owners) are liable for security deposits if they have actual knowledge of the deposit. They must notify tenants within 30 days of the property transfer if there is no record of a security deposit. Landlords and tenants cannot waive or modify the rights guaranteed by the Security Deposit Law, even if the lease agreement says otherwise.
Landlords may be able to deduct from a tenant’s security deposit for the reasonable costs of removing disability-related modifications made by the tenant to the unit.
Generally, tenants are responsible for paying for the utilities they actually consume. The division of a utility bill among tenants in a building is subject to specific regulations and the lease agreement. A utility bill may be divided equally if the lease stipulates such an arrangement, or tenants may agree to this privately. Tenants may also ensure that the utility bill is divided equally through private contracting, outside of the lease agreement.
If a tenant pays a utility bill that the landlord was responsible for, the tenant may deduct that amount from a future rent payment. If a landlord’s failure to pay for a utility service results in a discontinuance of that service, the landlord may be liable for compensatory and punitive damages, as this may constitute a breach of the warranty of habitability.
