Security deposit interest in New York
Yes — New York landlords must pay interest on security deposits in buildings of 6 or more units.
Work out what you are owed in New York
Enter your deposit and dates to see what New York law entitles you to.
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Not legal advice. This is an estimate for informational purposes only and is not legal advice. Security deposit laws change and vary by jurisdiction. Verify with the cited statute or consult a licensed attorney in your state before taking action.
How is the New York interest rate set?
No fixed statutory rate. The tenant receives the interest actually earned by the bank account, less the landlord's 1% per year administration fee. An interest-bearing account is mandatory only for buildings with six or more family dwelling units, where the rate must be the prevailing rate paid on similar deposits by banks in that area. For buildings under six units the landlord may hold the deposit in a non-interest-bearing account, in which case no interest is owed.
What does New York law actually say?
New York requires every residential security deposit to be held in trust and never mingled with the landlord's own money. For buildings with six or more family dwelling units the landlord must place the deposit in an interest-bearing account at a New York bank earning the prevailing local rate. For smaller buildings an interest-bearing account is optional, and where none is used no interest accrues.
Where interest is earned the landlord may retain 1% per year as an administration fee in lieu of all other administrative and custodial charges; the remaining interest belongs to the tenant and must be held in trust, applied to rent, or paid annually. If the lease ends between the bank's regular interest payment dates, the landlord pays whatever interest can be collected as at termination. The landlord must notify the tenant in writing of the bank's name and address and the deposit amount.
Any lease provision waiving these rights is void. Rent-stabilized units in New York City and units under the Emergency Tenant Protection Act are governed separately by GOL Sec. 7-107.
When must a New York landlord return the deposit?
14 days.
Fourteen days after the tenant vacates, the landlord must provide an itemised statement of any amount retained and return the balance. Failure to do both within fourteen days forfeits the landlord's right to retain any portion of the deposit.
How much can a New York landlord charge?
Capped at one month's rent, with exceptions for seasonal-use units and owner-occupied cooperative apartments.
What if your landlord does not comply?
Any waiver of this section in a lease is absolutely void. Failure to turn over deposits on transfer of the property is governed by GOL Sec. 7-105. For rent-stabilized units under GOL Sec. 7-107, a willful violation carries punitive damages of up to twice the deposit, and failure to provide an itemized statement and return the balance within 14 days forfeits the landlord's right to retain any part of the deposit. Under GOL Sec. 7-108, a landlord who fails to provide the itemised statement and deposit within fourteen days forfeits any right to retain any portion. Violations carry actual damages, and a wilful violation carries punitive damages of up to twice the deposit. The landlord bears the burden of proving the reasonableness of any amount retained.