New York Security Deposit Laws: Limits, Returns, HSTPA Rules

The New York General Obligations Law (effective September 27, 1964) serves as the primary statutory framework for security deposits, which was fundamentally overhauled by the Housing Stability and Tenant Protection Act (HSTPA) of 2019. Before the HSTPA, landlords in many parts of the state could charge multiple months' rent as a deposit. Today, the rules are strict, uniform, and aggressively enforced.

The One-Month Cap

Under NY General Obligations Law § 7-108, as amended by the HSTPA, landlords can collect a security deposit of no more than one month's rent. This applies to most residential tenancies in New York State, though specific exceptions exist for registered seasonal use dwellings and owner-occupied cooperative apartments.

What Counts Toward the Cap

The one-month cap is all-inclusive. Landlords cannot collect:

• Additional "last month's rent" in advance.
• Move-in fees, key deposits, or pet deposits that, combined with the security deposit, exceed one month's rent.
• Any other up-front charge that functions as additional security.

Pet Deposits

Under the HSTPA, a landlord cannot charge a separate pet deposit that would bring the total up-front charges above one month's rent. Any damage caused by a pet would be deducted from the single security deposit at lease-end.

The 14-Day Return Deadline

This is one of the strictest return deadlines in the country. After the tenant vacates the unit and the tenancy terminates, the landlord must:

1. Return the full deposit, or
2. Provide an itemized statement of all deductions along with the remaining balance.

This must be completed within 14 days. If the landlord fails to return the deposit or provide the itemized list within this window, the landlord forfeits the right to retain any portion of the deposit, regardless of whether there was legitimate damage.

Allowable Deductions

A landlord can deduct from the security deposit only for:

• Unpaid rent owed at the end of the tenancy.
• Damages beyond normal wear and tear caused by the tenant.
• Non-payment of utility charges payable directly to the landlord under the lease.
• Moving and storage costs for the tenant's belongings.

In any dispute regarding deductions, the landlord bears the burden of proof as to the reasonableness of the amount retained.

Normal Wear and Tear vs. Damage

• Normal Wear and Tear: Faded paint, minor scuffs on hardwood floors, worn carpet in high-traffic areas, small nail holes from hanging pictures.
• Damage: Large holes in walls, broken fixtures, stained or burned carpet, unauthorized alterations.

Pre-Move-Out Inspection

Under GOL § 7-108(1-a)(d), landlords must notify tenants in writing of their right to a pre-move-out inspection. If requested, the inspection must occur between two weeks and one week before the tenancy terminates, and the landlord must provide an itemized statement of proposed repairs to allow the tenant to cure the condition before move-out.

Prohibited Practices Under the HSTPA, the following are illegal:

• Requiring a deposit greater than one month's rent, regardless of the tenant's credit score, rental history, or immigration status.
• Charging a non-refundable deposit for any purpose.
• Retaining the deposit for normal wear and tear.
• Failing to provide the itemized deduction statement within 14 days.
• Failing to notify the tenant in writing of the name and address of the banking organization where the deposit is held.
• Using the security deposit during the tenancy (e.g., applying it to a missed rent payment without the tenant's written consent).

How Landager Helps

Landager tracks lease terms, HSTPA deadline compliance, and security deposit interest - making it easy to handle your property portfolio while staying compliant with New York regulations.

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