TIP OF THE MONTH - April 2014

Applying the Security Deposit to the Last Months Rent

Source: New York Landlord’s Law Book
Mary Ann Hallenborg

When giving notice, a Tenant may ask you to apply the Security Deposit towards the last month’s rent.  If no portion of the Tenant’s deposit was labeled last month’s rent, you are not legally obliged to apply it in this way.

Why should you object if a Tenant asks to use a deposit you are already holding as payment for the last month’s rent? The problem is that you can’t know in advance what the property will look like when the tenant leaves. If the tenant leaves his apartment a mess, but the whole Security Deposit has gone to pay the last month’s rent, obviously you will have nothing left to use to make repairs or clean the apartment.  You will have to absorb the loss or sue the Tenant.

Send an itemization even if you don’t send money.  Quite a few Landlords mistakenly believe that they don’t have to account for the deposit to a Tenant who’s been evicted by court order or who breaks the Lease.  But a Tenant’s misconduct does not entitle a Landlord to pocket the entire deposit without further formality.  In general, even if the Tenant leaves owing several month’s rent….more than the amount of the deposit….you should still notify the Tenant in writing, within 30 days, as to how the deposit has been applied toward cleaning or repair charges and unpaid rent.  You may then need to sue the Tenant if the deposit doesn’t cover all damage and unpaid rent.


We counsel prospective Tenants and Landlords that our Lease states that any/all deposits will never be applicable for rent at any time.

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This web page was updated on 04/02/2014.