Although owning a home is the American dream, in high-cost markets like New York, it simply isn’t always realistic. Being a long-term renter gives you the opportunity to stay close to where you work and have the flexibility to move with minimal complications if an opportunity arises elsewhere.
As a tenant in New York, there are laws that protect you. For example, there are numerous rules regarding the security deposit that you pay before you assume occupancy of a rental unit. Landlords charge security deposits to protect themselves from potential financial losses incurred by taking on a new tenant.
Understanding how those rules help protect you will make it easier for you to avoid scams or a landlord who tries to take advantage of you.
The law limits what a landlord can charge
New York law restricts the security deposit on a rental unit to one month’s worth of rent. Landlords should not attempt to charge tenants multiple months’ worth of rent as a security deposit for a single rental unit.
The law requires that the landlord keep the security deposit separate
State law mandates that landlords cannot commingle your security deposit with their personal resources or business accounts. Often, landlords open escrow accounts specifically for individual security deposits.
If you live in a multi-unit building with a commercial landlord, there may be a requirement for your landlord to put the money in an interest-bearing account, which may entitle you to some of that interest when you move out of the units.
The law limits when a landlord can claim the deposit
Summit landlords will do their best to make spurious claims against the security deposit for minor, reasonable cleaning and wear. However, that is not the purpose of a security deposit. Landlords should only make a claim against the security deposit for real damage, lease breaches or unpaid rent.
Damage that exceeds normal wear and tear, such as holes in walls, discoloration of paint due to indoor smoking or pet odors could lead to a claim against the deposit. The landlord could also retain some or all of the security deposit to recover unpaid rent if a tenant moved out without completing the lease or was in clear violation of the lease.
If the landlord wants to make a security deposit claim, they will have to notify the tenant in writing within 14 days and give them an opportunity to respond. Otherwise, they must return the security deposit to the tenant. Understanding your rights can help you stand up for them if you get into a conflict with your landlord about your security deposit.