New York City is the largest renter market in the United States, and roughly two in three occupied homes in the city are rented. The Census Bureau’s QuickFacts puts the city’s owner occupied housing rate at 32.8 percent for 2020 to 2024, with a median gross rent of $1,821 a month and a median household income of $80,483 (U.S. Census Bureau QuickFacts, New York City). Current asking rents in much of the city run well above that long run median, so a deposit is real money.
New York rewrote its deposit rules in the Housing Stability and Tenant Protection Act of 2019, and the protections it created are among the strongest in the country: a one month cap, a pre move out inspection, a 14 day deadline, and forfeiture for landlords who miss it. This guide explains each rule, for both market rate and rent stabilized apartments.
Homzora is a housing research publisher, not a law firm. This article explains New York law in plain English and is not legal advice for your situation.
The core rules
| Rule | What the law requires | Source |
|---|---|---|
| Cap | No deposit or advance may exceed one month’s rent | N.Y. Gen. Oblig. Law § 7-108(1-a)(a) |
| Move in inspection | The landlord must offer an inspection before you move in; conditions recorded then cannot be charged to you | § 7-108(1-a)(c) |
| Move out inspection | The landlord must tell you in writing of your right to an inspection before you leave | § 7-108(1-a)(d) |
| Deadline | Itemized statement and the balance within 14 days after you vacate | § 7-108(1-a)(e) |
| Missed deadline | The landlord forfeits any right to retain any portion of the deposit | § 7-108(1-a)(e) |
| Burden of proof | The landlord must prove the amount retained was reasonable | § 7-108(1-a)(f) |
| Willful violations | Punitive damages of up to twice the deposit, plus actual damages | § 7-108(1-a)(g) |
The one month cap
Section 7-108 of the General Obligations Law states that no deposit or advance shall exceed the amount of one month’s rent, with narrow exceptions such as qualifying seasonal units and owner occupied cooperative apartments (GOL § 7-108(1-a)(a)). For rent stabilized apartments, New York State Homes and Community Renewal confirms that the 2019 law limits the security deposit for any apartment to one month’s rent (HCR Fact Sheet 9, Security Deposits and Other Charges).
Any lease term that waives or modifies these rights is void (§ 7-108(3)).
What a landlord may and may not deduct
The deposit is fully refundable except for amounts lawfully withheld for (§ 7-108(1-a)(b)):
- Unpaid rent.
- Damage caused by the tenant beyond normal wear and tear.
- Unpaid utilities payable directly to the landlord under the lease.
- Moving and storage of the tenant’s belongings.
The landlord may not withhold for ordinary wear and tear or for damage caused by a prior tenant. And if you requested a move in inspection, conditions recorded in that signed agreement cannot be deducted later (§ 7-108(1-a)(c)).
The move out inspection
This is one of the most useful protections a New York renter has. The landlord must notify you in writing of your right to request an inspection before the tenancy ends and to be present. If you request it, the inspection must take place no earlier than two weeks and no later than one week before the end of the tenancy, with at least 48 hours’ written notice. Afterward, the landlord must give you an itemized statement of proposed deductions, and you may fix those conditions before you leave (§ 7-108(1-a)(d)).
One caution: the landlord’s duty to give notice of this right does not apply if you give less than two weeks’ notice that you are ending the tenancy. Give notice early.
The 14 day deadline
Within 14 days after you vacate, the landlord must give you an itemized statement of any amount retained and return the balance. A landlord who misses that deadline forfeits any right to keep any portion of the deposit (§ 7-108(1-a)(e)). HCR’s fact sheet states the same 14 day rule for rent stabilized apartments (HCR Fact Sheet 9).
Interest on your deposit
Deposits are trust money that remain the tenant’s property. For rentals in buildings with six or more family dwelling units, the landlord must hold the deposit in an interest bearing account at a New York bank and tell you in writing the bank’s name and address and the amount deposited. The landlord may keep 1 percent per year of the deposit as an administrative fee; the rest of the interest belongs to you and is either held in trust, applied to rent, or paid to you annually (N.Y. Gen. Oblig. Law § 7-103; HCR Fact Sheet 9).
A New York move out plan
- Give written notice of your move out date at least two weeks before the end of the tenancy, and ideally much earlier.
- Request the pre move out inspection in writing.
- Fix the items on the landlord’s itemized list before you leave.
- Photograph every room after it is empty.
- Return all keys and give a forwarding address in writing.
- Count 14 days from the day you vacate.
If the landlord keeps your money
Write to the landlord citing GOL Section 7-108, the 14 day deadline, and the forfeiture rule. If the landlord missed the deadline, ask for the full deposit. If it met the deadline but you dispute deductions, remind the landlord that it bears the burden of proving the amount retained was reasonable (§ 7-108(1-a)(f)). Small claims court in New York City handles claims up to $10,000 (New York City Civil Court, Small Claims).
Build your evidence file
Disputes with landlords are usually decided by documents, not memories. Keep these together from the day you sign:
- The signed lease, every addendum, and every renewal.
- Receipts or bank records for the deposit and each rent payment.
- Dated photos and video of every room at move in and move out.
- Copies of every repair request and the landlord’s replies.
- Every notice you send or receive, with proof of delivery.
Store copies somewhere other than your phone, such as an email to yourself, so they survive a lost device.
Before you sign your next lease
- Ask who owns the building and who manages it, and get contact details in writing.
- Read the clauses on early termination, subletting, renewal, and notice before you sign, not after a problem arises.
- Confirm the deposit amount, where it will be held, and how it will be returned.
- Walk through the unit with the landlord, note existing damage in writing, and keep a signed copy.
- Ask whether the unit is covered by any local rent rules, so you know how much the rent can change if you stay.
Roommates and shared apartments
New York City has about 3.33 million households, averaging 2.48 people each (U.S. Census Bureau QuickFacts, New York City). Many apartments are shared, and shared apartments create deposit questions. The cap applies to the deposit or advance for the apartment (GOL § 7-108(1-a)(a)), so roommates should agree in writing, before anyone moves out, how the single deposit will be divided when it is returned and who will receive the landlord’s itemized statement.
Does my landlord have to offer a move in inspection?
Yes. After the lease is signed but before you move in, the landlord must offer an inspection; if you request it, you and the landlord sign a written agreement recording the unit’s condition, and the landlord may not later withhold money for conditions listed in it (GOL § 7-108(1-a)(c)).
Key terms
- Deposit or advance: money paid to the landlord at the start of a tenancy beyond the first month’s rent. In New York, the total may not exceed one month’s rent (GOL § 7-108).
- Normal wear and tear: ordinary deterioration from living in the apartment, which the landlord may not charge you for (§ 7-108(1-a)(b)).
- Itemized statement: a written list of each amount the landlord keeps and why, due within 14 days after you vacate (§ 7-108(1-a)(e)).
- Forfeiture: the loss of the landlord’s right to keep any portion of the deposit if it misses the 14 day deadline (§ 7-108(1-a)(e)).
Frequently asked questions
My landlord asked for first month, last month, and a deposit. Is that legal?
The cap covers any “deposit or advance,” so a landlord may not collect more than one month’s rent in total as a deposit or advance beyond the first month’s rent (§ 7-108(1-a)(a)).
Do these rules apply to my rent stabilized apartment?
Yes. HCR’s fact sheet confirms the one month cap and the 14 day return rule for rent stabilized apartments (HCR Fact Sheet 9).
The landlord sent the itemized statement on day 20. What now?
Under Section 7-108(1-a)(e), a landlord that fails to provide the statement and balance within 14 days forfeits any right to retain any portion of the deposit (§ 7-108(1-a)(e)). Demand the full amount in writing.
Sources
- New York General Obligations Law § 7-108, New York State Senate
- New York General Obligations Law § 7-103, New York State Senate
- New York State Homes and Community Renewal, Fact Sheet 9, Security Deposits and Other Charges
- U.S. Census Bureau QuickFacts, New York City
- New York City Civil Court, Small Claims