BY JOHN KIRITSIS, ESQ., CPA, MBA, MS, JD, LL.M
- Limit on Security Deposits:
In NYC, there is a limit on the amount landlords can charge for security deposits. As of September 2021, the maximum security deposit allowed for an unfurnished residential rental unit is one month’s rent. For furnished units, the maximum security deposit is limited to two months’ rent.
- Return of Security Deposits:
Landlords are required to return the security deposit, minus any lawful deductions, within a certain timeframe after the tenant vacates the premises. As of my last update, landlords have 14 days to return the deposit for tenants of buildings with six or more units, and 45 days for tenants of buildings with fewer than six units.
- Deductions and Itemized Statements:
Landlords can deduct only specific types of charges from the security deposit, such as unpaid rent, repair costs for damages beyond normal wear and tear, and unpaid utilities. Within the specified timeframe for returning the deposit, landlords must provide tenants with an itemized statement explaining the deductions.
- Written Receipt:
Upon receiving the security deposit, landlords are required to provide tenants with a written receipt indicating the amount of the deposit, the location where it is being held, and the name and address of the bank where it is deposited.
- Interest on Security Deposits:
As of September 2021, landlords are not required to pay interest on security deposits held for residential rental units.
- Storage of Deposits:
Security deposits must be kept in a separate, interest-bearing account in a New York bank. The account must be in the landlord’s name, with interest accruing to the benefit of the tenant.
- Penalties for Non-Compliance:
If landlords fail to comply with the regulations regarding security deposits, tenants may be entitled to penalties, including the return of the full deposit plus interest and potential additional damages.
Keep in mind that these regulations are subject to change, and there might be specific nuances that could impact the application of these rules to your particular situation. It’s essential to verify the most up-to-date regulations by consulting the New York City Housing Preservation and Development (HPD) website or seeking advice from legal professionals who specialize in NYC landlord-tenant law.
Citations, References and Potentially Useful Resources for Further Information:
New York State Constitution
Federal Securities Regulation
New York State Martin Act
New York Condominium Act
New York State Security Regulations
New York Business Corporation Law
New York Limited Liability Company Law
New York Uniform Partnership Act
Federal Internal Revenue Code
New York State Tax Laws, Rules & Regulations
New York City Tax Laws, Rules & Regulations
Winston Churchill Owners, Inc. v. Regents Real Estate Associates
Board of Managers of the Park Regis Condominium v. Park Regis Owners Corp.
Park Sutton Condominium v. 447 E. 57th St. LLC
28 E. 10th Street Corp. v. Veras
Riverside Syndicate, Inc. v. Munroe
Essex House Condominium v. Marks
The Parc Vendome Condominium v. Atkinson
54-56 Meserole Street Owners Corp. v. Rossi
The Beekman Regent Condominium v. Bottiglieri
Chelsea 19th LLC v. West 19th Street Realty LLC
New York Department of Finance
New York City Department of Buildings
New York City Bar Association
New York State Bar Association
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