Tip of the Month - June, 2017
SECURITY DEPOSIT RULES
Source: Leases & Rental Agreements (NOLO)
Marcia Stewart, Ralph Warner, J.D.
Attorney Janet Portman
New York General Obligations Law (7-103 to 7-108)
Limit: No statutory limit for non-regulated units.
Disclosure or Requirement: If deposit is placed in a bank, Landlord must disclose the name and address of the banking organization where the deposit is being held, and the amount of such deposit.
Separate Account: Statute requires that deposits not be commingled with Landlord’s personal assets, but does not explicitly require placement in a banking institution (however, deposits collected in buildings of six or more units must be placed in New York bank accounts.)
Interest Payments: Landlord who rents out non-regulated units in buildings with five or fewer units need not pay interest. Interest must be paid at the prevailing rate on deposits received from Tenants who rent units in buildings containing six or more units. The Landlord in every rental situation may retain an administrative fee of 1% per year on the sum deposited. Interest can be subtracted from the rent, paid at the end of the year, or paid at the end of the tenancy according to the Tenant’s choice.
Advance notice of deduction: Not required.
Deadline for Landlord to itemize and return deposit: “Within a reasonable time.”
This web page was updated on 05/29/2017.