New York Security Deposit Returns and Deductions

Last Updated: January 29, 2024 by Phil Ahn

For laws on security deposit collections and holdings in New York, click here.

Security Deposit Deductions in New York

In New York, the following can be deducted from security deposits: [1]

• Unpaid rent
• Costs of damage excluding normal wear and tear and any damage discovered and documented during the initial inspection
• Unpaid utility costs as provided by the lease agreement
• Moving and storage of the tenant’s belongings

Most states, such as New York, do not have a legal limit on how much a landlord can charge for damages except that the charges must be reasonable. [2]

If the cost of the damages exceeds the amount of the security deposit, landlords are entitled to seek additional damages from the former tenant.

What is Considered Normal Wear & Tear vs Damage in New York?

“Normal wear and tear” is deterioration that occurs naturally as a result of the tenant using the property as it was designed to be used.

Examples include:

• Gently worn carpets
• Lightly scratched glass
• Faded paint and flooring
• Lightly dirtied grout
• Loose door handles
• Stained bath fixtures

“Damage” means destruction to the rental unit that occurs because of abuse or negligence by a tenant during the course of the tenancy.

Examples include:

• Heavily stained, burned, or torn carpets
• Broken tiles or windows
• Holes in the wall
• Missing fixtures

Can the Landlord Charge for Replacing the Carpet in New York?

Landlords can charge for replacing the carpet if it is damaged beyond normal wear and tear.

Can the Landlord Charge for Nail Holes in New York?

Landlords in New York can charge a tenant for nail holes if they damage the walls in a way that is not a result of ordinary enjoyment of the rental unit.

Tenants have the right to use the walls within their unit in a reasonable way. This includes inserting small nails or thumbtacks to hang posters or pictures.

However, large holes from drilling, multiple nail holes, large nail holes, and holes made for hanging heavier things may be considered damage and thus, chargeable to the tenant.

Can the Landlord Charge a Cleaning Fee in New York?

Landlords in New York can charge a cleaning fee if it is specifically stated in the lease agreement, the landlord does not charge for cleaning done as a result of normal wear and tear, and the cleaning fee is reasonable.

Can the Landlord Charge for Painting in New York?

In New York, landlords can charge for painting, except for normal wear and tear. For example, if the tenant:

• Causes damage beyond normal wear and tear
• Repaints the wall but is not permitted to do so under the lease agreement
• Repaints the wall in an unprofessional way

Normal wear includes:

• Minor scrapes from daily use
• Fading due to sunlight
• Minor cracks in the original paint

Landlords can charge for repainting if the damage is not the result of normal use. This includes stains, large or deep scratches, and water damage.

Security Deposit Returns in New York

In New York, landlords must give tenants written notice of their right to an inspection before the end of the lease, allow the tenants to repair any damage documented during the inspection, then return the security deposit, if due, with a written list of damages, if any, no later than 14 days [4] after the tenant has moved out.

However, the landlord is not required to offer or conduct an inspection if the tenant terminates the lease with less than two weeks’ notice. [5]

Step 1: Written Notice. The landlord must send written notice to the tenant giving them the option to request an inspection. The notice must be sent to the tenant within a reasonable time before the fixed-term lease expires or after the landlord learns that the lease will end.

Step 2: Initial Inspection. If a tenant requests an inspection, it must take place between one to two weeks [6] before the end of the tenancy and they must be given 48-hour written notice. [7]

Step 3: Itemized Statement of Repairs. If an inspection is conducted, the landlord must provide the tenant with an itemized statement of repairs or cleaning the tenant may complete to avoid security deposit deductions. [8]

How Long Do Landlords Have to Return Security Deposits in New York?

New York landlords have 14 days [9] after the tenant vacates the rental unit to return a security deposit along with a written statement of deductions if any.

Do Landlords Owe Interest on Security Deposits in New York?

Landlords in New York owe interest if the deposit was placed in an interest-bearing account and there is any interest left after the landlord retains a 1% administration fee.

If a rental unit is in a building with six or more units, the landlord must place security deposits in an account that gains interest at the prevailing rate. [10] All interest is due to the tenant except the landlord may take 1% of the interest annually as an administration fee [11] which means there may be none remaining for the tenant.

Landlords may credit the tenant for their interest due at the end of the lease or annually. [12]

If the building has five or fewer units and the landlord chooses to hold security deposits in an interest-bearing account, they should follow these same rules.

How Do Landlords Give Notice in New York?

If deductions are to be made from the security deposit, an itemized statement of deductions must be sent. However, unlike most other states, New York law does not specify what methods of delivery are acceptable. Typically, security deposits must be returned by hand delivery or by first-class or certified mail to the tenant’s last known address.

Can a Security Deposit Be Used for Last Month’s Rent in New York?

New York law does not forbid the security deposit from being used for any outstanding rent.

Landlords can include a provision in the lease agreement that the security deposit cannot be used for the last month’s rent until the tenant vacates the rental unit.

Security Deposit Disputes in New York

If landlords do not return the security deposit or provide an itemized statement of deductions, if any, within the required 14-day time period, they forfeit their right to make deductions, and tenants can file for actual damages in court. [13]

However, if a landlord is found to have intentionally violated the security deposit rules, they may be liable for up to twice the amount of the deposit in addition to the amount wrongfully withheld. [14]

Tenants can take legal action against a landlord for:

• Failure to provide written notice that lists deductions if the security deposit is not returned in full
• Deductions that are not mentioned in the lease agreement
• Unreasonable deductions

How Can Tenants File a Dispute for a Security Deposit in New York?

If a landlord fails to perform their obligations regarding a security deposit, the tenant can file a dispute in Small Claims Court. The maximum amount that can be reclaimed through Small Claims Court is between $3,000 and $10,000 depending on where in the state the case is filed.

If the amount is greater than the court’s limit as a small claim, the tenant must file a civil case in the New York City Civil Court, or City Court if you are filing outside of New York City.

A small claims case regarding the return of a security deposit must be filed within three [15] to six years, [16]depending on the type of claim.

Cases are filed where the property is located or where the defendant lives, works or has a place of business. An attorney is not required but permitted. Filing fees are $10 to $20, depending on where the case is filed and the amount sought in damages.