Last updated: August 4, 2026
New York Security Deposit Laws 2026: 1-Month Max + 14 Days
HSTPA capped New York security deposits at one month’s rent statewide — no exceptions. Landlords must return the deposit within 14 days, hold it in an interest-bearing account, and cannot charge pet deposits, last month’s rent, or application fees above $20.
Key Takeaways
- HSTPA capped deposits at 1 month’s rent (was unlimited before 2019)
- 14-day return deadline after move-out
- Must hold in interest-bearing account (interest belongs to tenant minus 1% admin fee)
- Cannot charge last month’s rent, application fees above $20, or pet deposits beyond the 1-month cap
- Penalty: tenant can sue for return + court costs + attorney fees
- No exceptions — applies to all residential rentals statewide
The 1-Month Cap (HSTPA)
The Housing Stability and Tenant Protection Act of 2019 amended General Obligations Law §7-108 to cap security deposits at one month’s rent for all residential rentals statewide. Before HSTPA, there was no statewide cap outside of rent-stabilized units — landlords could (and frequently did) charge two or three months’ rent upfront.
| Charge Type | Before HSTPA (2019) | After HSTPA |
|---|---|---|
| Security deposit | No statewide limit | 1 month’s rent |
| Last month’s rent | Commonly charged | Prohibited (counts against cap) |
| Pet deposit | Commonly charged separately | Included in 1-month cap |
| Application fee | No limit | $20 maximum |
| Broker fee (NYC) | Tenant pays (12–15% of annual rent) | Separate from deposit cap; FARE Act (2024) shifts to landlord in many cases |
No exceptions. Unlike California (which exempts small landlords), New York’s 1-month cap applies to every residential landlord statewide regardless of portfolio size, building type, or whether the unit is furnished.
14-Day Return Deadline
GOL §7-108(1-a) requires landlords to return the security deposit — or provide an itemized statement of deductions — within 14 days after the tenant vacates. This is one of the shortest return deadlines in the country (California allows 21 days).
Day 0: Tenant moves out
Document the unit condition with photos and video. Note any damage beyond normal wear and tear. The 14-day clock starts on the date the tenant surrenders possession.
Days 1–7: Assess and get estimates
Get repair estimates or invoices for any damage. Calculate unpaid rent. Prepare the itemized statement of deductions.
Day 14: Deadline
Mail the itemized statement and any remaining deposit to the tenant’s forwarding address. If the tenant did not provide a forwarding address, mail to the last known address (the rental unit).
If you miss the 14-day deadline: The tenant can sue for the full deposit amount plus reasonable attorney’s fees and court costs. Courts are strict about this deadline — late by even one day gives the tenant standing to sue.
Interest-Bearing Account Requirement
GOL §7-103 requires landlords of buildings with 6 or more units to hold security deposits in interest-bearing accounts at a banking institution in New York State. The interest belongs to the tenant.
Who Must Comply
Landlords of buildings with 6+ residential units. Landlords with fewer than 6 units are not required by statute to hold deposits in interest-bearing accounts, but it is recommended as a best practice.
Interest Belongs to Tenant
The landlord may deduct 1% per annum as an administrative fee. The remaining interest must be paid to the tenant annually or credited to rent, at the tenant’s option.
Required Disclosures
The landlord must notify the tenant in writing of: the name and address of the banking institution, the amount deposited, and the fact that the tenant is entitled to the interest (minus 1% admin fee).
Legal Deductions
Under GOL §7-108, landlords may deduct from the security deposit only for:
Unpaid Rent
Base rent owed through the date the tenant surrendered possession. Late fees, utility charges, or other fees cannot be deducted from the security deposit.
Damage Beyond Normal Wear and Tear
Holes in walls, broken fixtures, stains that require replacement, pet damage. Normal wear and tear is not deductible — scuff marks on floors, minor nail holes, faded paint, and worn carpet are typical examples of normal wear.
Cleaning (If Not “Broom Clean”)
If the tenant left the unit in a condition requiring cleaning beyond “broom clean” standard. Must be reasonable and documented with receipts or invoices.
You cannot deduct for: late fees, repainting (unless damage beyond normal wear), carpet cleaning (unless stained beyond normal wear), replacing appliances at end of useful life, or any pre-existing damage not documented at move-in.
Pet Deposits
Under HSTPA, a pet deposit is not separate from the security deposit. Any money collected as a deposit — regardless of what it is called — counts toward the one-month cap.
What You Can and Cannot Do
Allowed
- Pet rent (monthly recurring charge)
- Pet screening (via services like PetScreening)
- Deduct pet damage from the security deposit at move-out
Not Allowed
- Separate pet deposit on top of security deposit
- Non-refundable pet fee
- Charging “pet damage deposit” beyond the 1-month cap
Application Fee Cap ($20)
RPL §238-a caps rental application fees at $20 statewide. This includes credit checks, background checks, and any other screening costs. You cannot charge separately for these items.
Requirements
- Maximum $20 total for all screening
- Must provide the applicant a copy of any background check or credit report obtained
- If the applicant provides their own report (within 30 days), you cannot charge the fee at all
- The fee is non-refundable (it covers actual screening costs)
Penalties for Violations
Tenants can sue landlords in small claims court (up to $10,000) or civil court for security deposit violations. The penalties are significant.
| Violation | Penalty |
|---|---|
| Late return (past 14 days) | Full deposit + attorney fees + court costs |
| No itemized statement | Forfeiture of right to retain any deposit |
| Charged above 1-month cap | Excess must be returned + attorney fees |
| Not in interest-bearing account (6+ units) | Tenant may use deposit as rent + attorney fees |
| Application fee above $20 | Excess must be refunded + $50 civil penalty |
Frequently Asked Questions
Can I charge a separate pet deposit in New York?
No. HSTPA caps the total security deposit at one month’s rent, and this includes any pet deposit, additional deposit, or other security charge regardless of what it is called. A separate pet deposit on top of the security deposit violates the law. You can charge pet rent (a recurring monthly charge) as an alternative.
Do I need a separate bank account for security deposits?
If your building has 6 or more units, yes — GOL §7-103 requires you to hold deposits in an interest-bearing account at a New York banking institution, separate from your personal or operating funds. The interest belongs to the tenant (minus 1% admin fee). If you have fewer than 6 units, a separate account is not required by statute but is strongly recommended.
What happens if I do not return the deposit within 14 days?
The tenant can sue for the full deposit amount plus reasonable attorney’s fees and court costs. Courts interpret the 14-day deadline strictly. If you fail to return the deposit or provide an itemized statement within 14 days, you may forfeit the right to retain any portion of the deposit regardless of whether deductions were legitimate.
Related Resources
NY Landlord-Tenant Laws Hub
Complete guide to HSTPA, Good Cause Eviction, rent stabilization, and all compliance requirements.
Read the guide →NY Eviction Process
Step-by-step guide to evicting a tenant in New York — timelines, costs, and court procedures.
See the process →NY Eviction Notice Templates
Free copy-paste notice templates with correct statutory language for New York.
Get templates →NY Landlord-Tenant FAQ
20 answers to the most common New York landlord-tenant questions.
Read FAQ →Compliance Engine
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Check now →Never miss a deposit return deadline
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Written by Rachid Abadli
Property manager and founder of LeaseBase
This guide covers New York security deposit law under General Obligations Law §7-103 and §7-108, as amended by the Housing Stability and Tenant Protection Act of 2019 (HSTPA). Sources verified against NY Legislative Information.
Disclaimer: The information on this page is provided for informational purposes only and does not constitute legal advice. Security deposit law in New York may be affected by local ordinances and recent court decisions. You should consult a qualified New York attorney for guidance on your specific situation. LeaseBase™ is not a law firm and does not provide legal services.