A security deposit is a specified sum of money that a tenant may be required to pay a landlord or building management company before renting leased property. The security deposit acts as a form of insurance in that it can be used to pay for any damages that a tenant causes to the rental property. If no damage has been done to a rental unit by the time that the tenant is ready to move out, then their security deposit can be returned to them in full.
In most states, the amount of a security deposit is usually the same as the cost of one month’s rent. However, the period of time that a landlord will have to return a security deposit to a tenant will generally vary by state.
For instance, the Security Deposit Law in New York provides that a landlord may not charge a tenant more than the sum of one month’s rent for a security deposit. The law also provides that a New York (NY) landlord will have 14 days from the date that a tenant vacates the premises to return their security deposit. If the landlord does not return the deposit or only returns a partial amount, then the landlord must also supply the tenant with a list of reasons as to why they withheld it.
Some examples of when a landlord may be legally permitted to withhold a tenant’s security deposit include when they owe rent, if they caused damage to the rental unit that goes beyond standard wear and tear issues, and/or if they have unpaid utility bills that get paid directly to a landlord and not a utility company.
A NY landlord will also have a duty to store security deposit payments in a separate account where it can earn interest. It should be noted that this rule only applies to landlords whose rental property consists of six or more units. If the rental property contains fewer than six units, then this requirement will not apply.
Finally, one last thing to know about the Security Deposit Law in New York is that in the past, these laws were tailored to a landlord’s best interests. Now, thanks to amendments to the law, these regulations can be used to protect NY tenants. To learn more about your security deposit rights and New York’s newly enacted security deposit laws, you should contact a local real estate lawyer for further guidance.
What Is the Time Limit for Returning Security Deposits?
Each state has its own requirements regarding when the time limit for returning a tenant’s security deposit will expire. As of 2019, NY landlords will have 14 days from the time that a tenant vacated an apartment to return their security deposit. The landlord must also include an itemized list of reasons or the amounts paid to make repairs on the property, which can be used to explain why they have withheld any portion of the deposit from the tenant.
If a NY landlord fails to return a security deposit within this time frame and does not provide a list of reasons or evidence of receipts for repairs, then they can lose the right to claim any remaining portion of the security deposit, regardless of the reason that it may be needed.
In addition, landlords in New York are also no longer able to charge new tenants more than one month’s rent for a security deposit. Under the new laws, this action is considered illegal. Therefore, if a tenant has recently moved into a New York apartment or has a lease that is dated after July 14, 2019, then the landlord can be legally forced to return any portion of the tenant’s security deposit that exceeds one month’s rent.
What Can I Do If My Refund Amount Is Not Correct?
There are several things that a NY tenant can do if they feel that the amount of their security deposit refund is not correct. The following list provides some of these options, including:
- A NY tenant may submit a letter to their landlord that contains a request for an explanation of the deductions along with any supporting documents (e.g., itemized statements, copies of receipts, property repair bills, etc.). The tenant can also use this letter to state why they believe they should receive more than the amount that was initially refunded.
- A NY tenant and landlord can attempt to settle a dispute over a security deposit refund by choosing a method of alternative dispute resolution, such as mediation or negotiation. In most landlord-tenant cases, the parties will choose some form of mediation.
- A NY tenant may file a lawsuit against their landlord in a local small claims court. It should be noted, however, that this option will only be available for cases that are for $10,000 or less in New York City and below $5,000 in other parts of the state.
- Lastly, a NY tenant can 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 instance, if the landlord kept the refund in bad faith, then the tenant would have grounds to sue the landlord in court.
As mentioned, a tenant may be able to recover the full amount of their security deposit as well as any additional damages they might be owed if they win the lawsuit. Additional damages may include compensatory damages, punitive damages, and/or double the monetary value of the original security deposit. Such remedies are typically awarded when a landlord has acted in bad faith and has kept the tenant’s security deposit after they moved out.
Do I Need a New York Attorney for Help with Security Deposit Refund Issues?
If you believe that a NY landlord has deducted a portion of your security deposit in error, then you should notify the landlord about the issue immediately. The notice should be given in the form of a written statement and the statement should include the amount of the security deposit that you feel needs to be refunded.
While such matters can be handled without the assistance of a lawyer, it is generally recommended that renters hire a New York landlord and tenant lawyer to draft and submit the notice to the NY landlord. No landlords ever want to be involved in a legal matter, but NY landlords are particularly adept at ignoring renters’ requests for security deposit refunds. Thus, landlords in NY are more likely to reply when the person contacting them has legal authority.
However, if you decide to resolve the issue without the help of a New York lawyer and your landlord is still denying your request to have your security deposit refunded, then you should strongly consider consulting a local lawyer for further legal guidance on the matter. Your lawyer can send a formal follow-up letter to your landlord that contains statements indicating which NY security deposit laws they might be violating.
Your lawyer can also help you file a lawsuit against your landlord, prepare arguments for your case, and represent you in civil court. Additionally, your lawyer will be able to answer any questions you may have about your case and can discuss the potential remedies you may be entitled to if the case is successful.