NY Security Deposit Rules for Landlords
NY landlords may take one month’s rent as a deposit, must hold it in trust, offer inspections, and return it with an itemized statement within 14 days.
8 min read · Updated
To keep a security deposit lawfully in New York, take no more than one month’s rent, hold it in trust separate from your own money (in an interest-bearing New York bank account if the building has six or more apartments), offer the tenant move-in and move-out inspections, and return the deposit with an itemized statement within 14 days after the tenant leaves. Miss the 14-day statement and you lose the right to keep any of it.
These rules come mainly from General Obligations Law (GOL) §7-108, added by the 2019 Housing Stability and Tenant Protection Act, and GOL §7-103. A lease clause that waives them is void. The checklist below turns the statute into a step-by-step compliance routine.
At a glance
- Maximum deposit
- One month’s rent
- GOL §7-108(1-a)(a)
- Where it’s held
- In trust, not commingled
- GOL §7-103(1)
- Interest account
- 6+ apartment buildings
- NY bank, prevailing rate; owner may keep 1%/yr
- Return deadline
- 14 days after move-out
- With itemized statement of any deductions
- Late statement
- Forfeit any right to keep it
- GOL §7-108(1-a)(e)
- Willful violation
- Up to 2× the deposit
- Punitive damages, plus actual damages
Deposit compliance checklist
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Security deposit compliance (NY)
0/10How much you can collect
GOL §7-108(1-a)(a) says no deposit or advance may exceed one month’s rent. Two narrow exceptions apply: certain seasonal-use dwelling units, and units where the tenant is the owner or shareholder of a cooperative and occupies under a proprietary lease. For an ordinary NYC rental, the cap is one month, full stop.
For rent-stabilized apartments, HCR says the same one-month limit applies and the deposit must be kept in an interest-bearing account in a New York State bank. If the rent goes up at renewal, the RTP-8 renewal form has a line for any additional deposit, which keeps the deposit at one month of the new rent. Units under rent control have their own rules; check with HCR.
Holding the deposit: trust, accounts and interest
| Rule | Buildings with fewer than 6 units | Buildings with 6 or more units |
|---|---|---|
| Held in trust, not commingled | Required | Required |
| Interest-bearing account at a bank in NY | Not required by §7-103 (rent-stabilized units: HCR requires one) | Required, at the prevailing rate |
| Written notice of bank name, address and amount | Required if deposited in a bank | Required |
| Administrative fee you may keep | 1% per year, if you choose an interest-bearing account | 1% per year of the deposit |
| Tenant’s share of interest | Belongs to the tenant if the account earns interest | Paid annually, applied to rent, or paid at lease end (tenant’s option per the AG) |
If a lease ends between interest payment dates, GOL §7-103 says you pay the interest earned up to that point. The security deposit calculator estimates the tenant’s interest and refund.
The move-out sequence
When the tenant gives notice
Tell them in writing about the pre-move-out inspection
They have the right to request one and to be present. This notice is not required if the tenant gives less than two weeks’ notice.2 weeks to 1 week before the tenancy ends
Inspection, if requested
Give at least 48 hours’ written notice of the date and time. Afterward, give an itemized statement of proposed deductions. The tenant may fix the items before moving out.Move-out day
Final walk-through and photos
Document condition, meter readings and anything left behind.Within 14 days of move-out
Itemized statement and refund
List each deduction with its reason and cost, and return the balance plus any interest owed.
What you may and may not deduct
| Allowed (reasonable, itemized cost) | Not allowed |
|---|---|
| Unpaid rent | Ordinary wear and tear (faded paint, light scuffs, normal carpet wear) |
| Damage caused by the tenant beyond ordinary wear and tear | Damage caused by a previous tenant |
| Unpaid utility charges you bill the tenant for directly | Conditions listed in a signed move-in inspection agreement |
| Moving and storage of the tenant’s belongings left behind | Routine turnover cleaning or repainting that is just wear and tear |
Penalties for getting it wrong
- No itemized statement within 14 days: you forfeit any right to keep any part of the deposit, even for real damage.
- Any violation of §7-108(1-a): liable for the tenant’s actual damages.
- Willful violation: punitive damages of up to twice the deposit, on top of actual damages.
- Burden of proof: in a dispute, you must show that what you kept is reasonable. Tenants often sue in Small Claims Court; see security deposit cases in Small Claims.
Related rules owners ask about
- Rent receipts: the Attorney General says you must give a written receipt for rent paid any way other than a tenant’s personal check, and for personal checks on request. See rent receipts in New York.
- Late fees: capped at $50 or 5% of monthly rent, whichever is less, and only after rent is more than five days late (RPL §238-a). Check yours with the late fee checker.
- Tracking deposits across units: use the security deposit tracker.
Is my security deposit legal, and what am I owed back?
Open full calculator →At 0.5% the landlord's 1% per year fee uses up all the interest. At higher rates you'd get the difference.
General information, not legal advice. Send by a method you can prove (email plus certified mail).
GOL 7-108(1-a): one-month cap with seasonal and owner-occupied co-op exceptions, permitted deductions, ordinary wear and tear and prior-tenant damage barred, move-in inspection offer and signed agreement, move-out inspection notice and timing (1-2 weeks before end, 48 hours written notice), 14-day itemized statement and forfeiture, landlord burden of proof, willful violation punitive damages up to twice the deposit, waivers void. GOL 7-103: trust, no commingling, six-or-more-unit interest-bearing account at a bank in NY, written notice of bank name/address and amount, 1% per annum administrative fee, interest paid annually or held in trust. AG guide: tenant options for interest, 5-day transfer on sale with registered/certified mail notice, rent receipt rules. HCR: stabilized deposits capped at one month and kept in interest-bearing NY bank account. RPL 238-a(1)(b): $20 or actual cost background check fee; RPL 238-a(2) late fee $50 or 5%, after 5 days. Re-verified 2026-10-12 against statute text: added the less-than-two-weeks-notice exception to the pre-move-out inspection (7-108(1-a)(d)); corrected the table to show the 1% administrative fee and tenant interest apply to any interest-bearing account, not only 6+ unit buildings (7-103(2)); sale-of-building transfer timing now cited to GOL 7-105 (at deed delivery or within 5 days, registered/certified mail notice).
Sources
- General Obligations Law § 7-108 (deposits and advances for residential premises) · New York State Senate (accessed October 12, 2026)
- General Obligations Law § 7-103 (money deposited as security; trust; interest) · New York State Senate (accessed October 12, 2026)
- Residential Tenants’ Rights Guide · Office of the New York State Attorney General (accessed October 12, 2026)
- General Obligations Law § 7-105 (turning over deposits on sale) · New York State Senate (accessed October 12, 2026)
- Leases (security deposits for rent-stabilized units) · NYS Homes and Community Renewal (accessed October 12, 2026)
- Real Property Law § 238-a (fees, charges and late fees) · New York State Senate (accessed October 12, 2026)
General information, not legal, tax or financial advice. Rules change; confirm with the agency or a professional before you act.