New York Security Deposit Refund

A security deposit is an amount of money that a tenant may be required to pay their landlord or building management company before they can rent a leased property. This security deposit serves as a form of insurance that may be used to pay for damages that the tenant causes to the rental property.

If there has not been any damage done to the rental unit by the time the tenant is ready to move out, their security deposit will be returned to them in full. In the majority of states, a security deposit is typically the same as the cost of one month’s rent.

The period of time that the landlord will have to return the security deposit to the tenant will vary by state. For example, in New York, the Security Deposit Law provides that landlords cannot charge tenants more than one month’s rent for the security deposit.

This also provides that a New York landlord has 14 days from the date that the tenant vacates the premises to return the security deposit. The landlord might not return the security deposit, or they might only return a partial amount. In this case, the landlord has to supply the tenant with a list of reasons why the deposit was withheld.

Examples of when landlords may be legally permitted to withhold a tenant’s security deposit include if the tenant:

• Owes rent;
• Caused damage to the rental unit beyond standard wear and tear issues;
• Has unpaid utility bills that are paid directly to the landlord and not to a utility company.

New York landlords also have a duty to store security deposit payments in separate accounts where they can earn interest if the landlord has six or more rental units. If the rental property has less than six units, this requirement does not apply.

If an individual has any questions about security deposit refunds or the Security Deposit Law in New York, they should consult with a local New York attorney.

How Long Does a Landlord Have to Return a Security Deposit?

Every state has its own requirements about the time limit for returning the tenant’s security deposit. Landlords in New York have 14 days from the date that the tenant vacates a property to return the security deposit.

The landlord, as noted above, is required to provide an itemized list of reasons for the amounts that were paid to make repairs to the property, which may be used to explain any amounts that were withheld from the tenant’s deposit.

A New York landlord may fail to return a security deposit within the required time frame and may not provide a list of reasons or evidence of receipts for repairs. If this is the case, the landlord may lose the right to claim any remaining portion of the security deposit, regardless of the reason that it might be needed. Additionally, New York landlords are not able to charge new tenants more than one month’s rent for a security deposit.

Assume that a tenant has moved into a New York apartment or has a rental agreement that is dated after July 14, 2019. In this case, a landlord may be legally forced to return any portion of the tenant’s security deposit that is more than the tenant’s rent for one month.

What Can I Do if My Refund Amount Is Not Correct?

There are several things a tenant in New York can do if they believe that the amount of their security deposit refund is not correct, including:

• A New York tenant can submit a letter to their landlord that requests an explanation of the deductions along with any supporting documents, for example, itemized statements, copies of receipts, property repair bills, etc.;
  • The tenant may also use this letter to state why they believe they should receive more than the amount that was initially refunded;
• A New York tenant and landlord can attempt to settle a dispute over a security deposit refund by choosing a method of alternative dispute resolution, for example, mediation or negotiation;
  • In the majority of landlord-tenant cases, the parties will choose some form of mediation;
• A New York tenant may file a lawsuit against their landlord in a local small claims court;
  • It is important to note, however, that this option is only available for cases that are for $10,000 or less in New York City and below $5,000 in other parts of the state; and
• A New York tenant may also file a lawsuit against their landlord in civil court to recover the full amount of their security deposit and any additional damages or legal remedies;
  • For example, if the landlord kept the refund in bad faith, then the tenant would have grounds to sue the landlord in court.

A tenant may be able to recover the full amount of their security deposit as well as any additional damages they may be owed if they prevail in the lawsuit. Additional damages may include:

• Compensatory damages;
• Punitive damages,
• Double the monetary value of the tenant’s original security deposit.

These remedies are typically awarded when the landlord acted in bad faith and kept the tenant’s security deposit after they moved out.

Can I Use My Security Deposit as Last Month’s Rent?

Security deposits are not used as the last month’s rent. At the end of a lease, if the tenant honors the terms of the lease and leaves the rental unit in the same condition as when they rented it initially, except for normal wear, the owner has to return the full security deposit.

If any damage was done, as discussed above, the owner can apply a portion or all of the security deposit to pay for repair costs.

Are Non-refundable Deposits Legal?

Under New York security deposit law, security deposits are considered to belong to tenants. This means that non-refundable deposits are not legal.

The landlord is responsible for holding the security deposit in a trust account for the duration of the tenant’s lease.

Do I Need a New York Attorney for Help with Security Deposit Refund Issues?

If you are a New York tenant and you believe that your landlord deducted or withheld part or all of your security deposit in error, you should notify your landlord immediately. In addition, if your landlord charged more than one month’s rent for your security deposit, you should include the difference in your request.

You should provide your notice in a written statement that includes the amount of the security deposit that you think should be refunded. Although these types of issues can be resolved without a lawyer in some cases, it is recommended that you consult with a New York landlord and tenant lawyer who can help you draft and submit your notice to your landlord.

A New York landlord will be more likely to reply if they are contacted by an individual who has legal authority, such as a lawyer. You may have already submitted a request to your landlord and they have not responded. If this is the case, a lawyer can send a follow-up notice that includes the laws that the landlord may be violating.

If necessary, your lawyer can also file a lawsuit on your behalf and advise you of the potential remedies for your case. Your lawyer will appear in court with you and help ensure that you receive the compensation you deserve.