How can I recover a residential security deposit a landlord is withholding in New York?
Under New York law, security deposits are treated as tenant money held in trust and generally must be refundable except for specified, itemized lawful deductions such as unpaid rent or damage beyond normal wear and tear. Statutes require landlords to offer pre-occupancy and pre-vacancy inspection opportunities in many situations and to account for deductions with an itemized statement when deductions are proposed. When deposits are improperly handled, courts have treated commingling or failures to notify about deposit custody as reasons a landlord may forfeit the right to keep the funds.
A common response is to send a written demand for return and prepare for a small-claims action if the landlord does not provide the deposit or an adequate itemized statement. Other remedies and timing rules vary by the type of rental (for example, rent-stabilized units have specific inspection notice rules), and case law has enforced requirements against commingling and improper retention of deposits.
Current New York law
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What New York law says
Money given as a tenant security deposit is generally the tenant's money and must be kept as a trust fund, not mixed with the landlord's funds, under A7T1 General Obligations § 7-101. For rent-stabilized units, A7T1 General Obligations § 7-107 limits deposits to one month's rent and requires return of the full deposit except for reasonable, itemized deductions for nonpayment of rent, damage beyond normal wear and tear, unpaid utilities owed to the landlord, and moving/storage charges; it also requires that landlords offer inspection opportunities and provide notice timing for pre-vacancy inspections. For non-rent-stabilized units, similar rules appear in A7T1 General Obligations § 7-108. When ownership changes, a seller or transferor who turns over security deposit funds to a grantee, assignee, purchaser or receiver must notify the tenant, under A7T1 General Obligations § 7-105. Case law enforces these requirements and has found forfeiture of a landlord's right to retain a deposit when funds were commingled or notice requirements were not met (see, e.g., Gihon, LLC v. 501 Second Street, LLC and Tappan Golf Drive Range, Inc. v. Tappan Property, Inc.).
What to do
A common first step is to send a written demand to the landlord asking for return of the deposit or a lawful, itemized statement of deductions (a demand letter is often used to prepare a later claim).
A common next step is to gather evidence: copies of the lease, any move-in/move-out inspection agreement or photos, rent payment records, and communications about the deposit.
A common option is to request or document any inspection the landlord offered or conducted, noting the statutory inspection windows for pre-vacancy inspections where they apply.
A common step before court is to prepare a small-claims filing with the documentation showing the deposit and why withholding is disputed.
A common step if the property changed hands is to check whether the deposit was turned over and whether the tenant received the required notice under the statute.
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Common questions
How much can a landlord require as a security deposit?
Can a landlord keep the deposit for ordinary wear and tear?
No, the statutes say landlords may not retain any amount for ordinary wear and tear; lawful deductions are limited to things like unpaid rent, damage beyond normal wear and tear, and certain other specified charges as in A7T1 General Obligations § 7-107 and A7T1 General Obligations § 7-108.
What if the landlord mixed the deposit with their own funds?
Case law has treated commingling as a serious violation that can cause the landlord to forfeit the right to keep the deposit; courts have ordered return of funds where landlords failed to show the deposit was properly held, see Gihon, LLC v. 501 Second Street, LLC.
What happens to a security deposit if the landlord sells the building?
When property is conveyed, the transferor who turns over the tenant security deposit to the grantee or purchaser must notify the tenant by registered or certified mail, under A7T1 General Obligations § 7-105.
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This page provides legal information only and is not legal advice. CiteLaw is not a law firm and does not represent you. For advice about your specific situation, consult a licensed attorney.
