Most residential leases and rental agreements in New York require a security deposit. This is a dollar amount, usually one month's rent, that's intended to cover damage to the premises beyond normal wear and tear, and to cushion the financial blow if a tenant skips out early on the lease without paying. Here’s a summary of New York landlord-tenant laws that cover the use and return of security deposits.
No. In New York, there's no statutory limit on security deposits for nonregulated units at the state level. But tenants and landlords (especially those in New York City and in rent controlled and rent stabilized rental units) should check city and county laws to see if their municipality has set a cap on security deposits for residential rentals.
To learn more about steps tenants can take to protect their security deposit after they've paid it, check out Nolo's article Protect Your Security Deposit When You Move In.
Under New York law, a landlord must return the tenant's security deposit within a reasonable time after the tenant has surrendered the rental property to the landlord--that is, returned the keys and vacated the property. What's "reasonable" would ultimately be up to a small claims court judge (should a deposit dispute end up in court), but it typically means a window of 21 to 45 days.
Learn more about tenants' rights and landlords' obligations when it comes to the return of the security deposit in Nolo's Cleaning and Repairs a Landlord Can Deduct from a Security Deposit chart and Get Your Security Deposit Back article.
Yes. If a deposit is placed in a bank, landlords in New York must disclose the name and address of the financial institution where the security deposit is being held and the amount of the deposit. The landlord in every rental situation may retain an administrative fee of 1% per year on the sum deposited. Also in New York, landlords of nonregulated units in buildings with six or more units must pay tenants interest on the security deposit. The interest can be subtracted from the rent, paid at the end of each year, or paid at the end of the tenancy (according to the tenant's choice).
If you want to go right to the source and look up New York law on security deposits -- or if you're writing a letter to a landlord or tenant and want to cite the applicable law -- the relevant statute(s) can be found at N.Y. General Obligations Law § § 7-103 to 7-108. To access your state law, check out the Library of Congress’s legal research site.
For other useful information on tenant rights in New York, see the "Tenants Rights Guide" available from the New York State Attorney General.
Updated: November 2017