New York Security Deposit Laws (2026): Know Your Rights

Most people have no idea this is even illegal. Seriously. But in New York, the rules around security deposits are strict, and landlords who break them face real penalties. Here’s what you need to know to protect yourself.

If you’re renting in New York, your landlord is legally required to follow specific rules with your deposit. Get these rules wrong as a tenant, and you could lose money. Get them wrong as a landlord, and you could owe three times what you wrongfully kept. Let’s break this down.

What Is a Security Deposit?

A security deposit is money you give your landlord before moving in. Think of it like insurance for the landlord. If you damage the apartment beyond normal wear and tear, fail to pay rent, or violate your lease, the landlord can deduct money from this deposit to cover those costs.

Here’s the important part: It’s your money. The landlord is just holding it in trust. At the end of your lease, you should get back every penny you don’t rightfully owe.

How Much Can a Landlord Charge?

The answer is simple. Your landlord can charge a maximum of one month’s rent. That’s it.

If your monthly rent is $1,500, your landlord cannot legally charge more than $1,500 as a security deposit. Not $1,600. Not $1,800. Not one month plus a “pet fee” or “furniture fee.” Just one month’s rent, period.

This rule applies to nearly all residential rentals in New York. Market-rate apartments. Rent-stabilized apartments. Furnished or unfurnished. The limit is the same across the board.

Wondering what counts as “one month’s rent”? It’s simply your regular monthly rent amount. Whatever you pay each month to live there, that’s your cap.

What About Interest on Deposits?

Here’s where it gets a little more interesting. If your building has six or more units, your landlord must place your security deposit in an interest-bearing account at a New York bank. That means your deposit actually earns money while sitting in the bank.

But here’s the catch. The landlord can subtract up to 1% per year as an administrative fee. So if your $1,500 deposit earns 3% interest, you’d get 2% of the interest. That extra 1% goes to the landlord for managing the account.

The tenant can choose what happens with this interest. You can request it be subtracted from your rent each year, held in the account until you move out, or paid to you in a lump sum at the end of each year. The choice is yours.

For buildings with five units or fewer, interest requirements don’t always apply. But it’s worth asking your landlord about it anyway.

Where Must the Deposit Be Kept?

Your landlord cannot just throw your deposit into their personal checking account. That’s mixing your money with theirs, which is illegal. Your landlord must keep your deposit separate and clearly identify it as yours.

For larger buildings (six or more units), deposits must go into an interest-bearing account. Your landlord should give you written notice of which bank holds your deposit and provide the account details.

Basically, the landlord needs to prove they’re keeping your money safe and separate.

Deductions: What Can Your Landlord Actually Keep?

Okay, pause. This part matters because it’s where most disputes happen.

Your landlord can only deduct money from your deposit for specific reasons. They are:

Unpaid rent. If you owe rent, the landlord can take it from the deposit.

Unpaid utilities. If the lease says you’re responsible for utilities and you haven’t paid, the landlord can deduct those costs.

Damage beyond normal wear and tear. This is the big one. Your landlord can only deduct for damage you caused that goes beyond normal living. A small hole in the wall from a picture frame? That’s normal wear. A huge gash in the wall? That’s damage. A few scuffs on the floor? Normal wear. Significant stains or burns? Damage. See the difference? The line between normal wear and tenant-caused damage can be tricky, but honestly, the law leans toward tenants here.

Storage and moving costs. If the landlord had to move or store your belongings after you left, they can deduct that cost. But only if your lease allows it.

That’s the complete list. Your landlord cannot deduct for general maintenance, cleaning costs for regular use, or pre-existing damage from when you moved in.

What Your Landlord Cannot Deduct

Let’s be clear about what’s absolutely off-limits.

Your landlord cannot deduct the cost of repairs for damage that existed when you moved in. Your landlord cannot deduct the cost of normal wear and tear. Your landlord cannot deduct for replacing old appliances or updating the unit. Your landlord cannot use your deposit as a final month’s rent.

That last one is important. Even if the lease says “last month’s rent,” your security deposit is not last month’s rent. They are separate things. A landlord trying to use your deposit as rent is breaking the law.

Additionally, your landlord cannot charge extra deductions for pets unless they have a specific pet damage clause in your lease. And even then, they can only deduct for actual damage. A perfectly clean apartment with a pet gets no deductions, period.

The 14-Day Return Deadline: This Is Critical

Here’s where things get serious for landlords and where tenants have real power.

After you move out, your landlord must return your deposit within 14 days. Not 30 days. Not a month. Fourteen days. That’s less than two weeks.

If your landlord kept any money, they must also send you an itemized statement showing exactly what they deducted and why. The statement must include the cost of any repairs or cleaning they claim you caused.

Sound complicated? It’s actually straightforward. The landlord needs to provide a clear, detailed list of any charges.

But wait, here’s where it gets really important. If your landlord misses the 14-day deadline, they lose the right to keep any of your deposit. None. Not even if they have legitimate reasons for the deductions. The deadline is strict, and the law heavily favors tenants who aren’t paid on time.

Let me repeat that because it’s crucial: Missing the deadline means the landlord forfeits the entire deposit.

Recent Changes: What Changed in November 2025

New protections took effect on November 15, 2025, and they’re significant.

Rent-stabilized tenants now have the same protections that market-rate tenants have had since 2019. This means landlords of stabilized apartments must also follow the 14-day return rule and provide itemized statements of deductions.

Additionally, tenants now have the right to conduct a walk-through inspection before moving out. A month before your lease ends, your landlord must notify you of this option. You can schedule a pre-move-out walk-through to identify any issues and fix them before you leave. You can also do a post-move-out walk-through to document the condition after moving.

This is huge. You now have the chance to know what the landlord thinks needs fixing and correct issues before being charged.

Pre-Exit and Post-Exit Walk-Throughs: Know Your Rights

Let’s talk about these walk-throughs in detail because they’re a game changer.

One month before your lease ends, your landlord must tell you in writing that you can schedule a walk-through. You have the option to bring someone with you (like a friend or family member) to document the condition.

The pre-exit walk-through happens before you move out. You can point out damage you didn’t cause and discuss repairs with your landlord. If there’s damage you did cause, you now have time to fix it before being charged.

The post-exit walk-through must happen by the last day of your lease, not after. This gives you one more chance to document the condition after you’ve removed your belongings and cleaned.

Here’s why this matters. If you document the condition through these walk-throughs, you have proof if the landlord later claims you caused damage you didn’t. You’re protected. Honestly, this is the part most tenants miss, and it’s incredibly valuable.

What Happens If Your Landlord Breaks These Rules

So what happens if your landlord charges more than one month’s rent? Or keeps your deposit longer than 14 days? Or deducts for things they shouldn’t?

If you paid more than one month’s rent upfront, you can recover that money plus additional penalties. If your landlord wrongfully withheld your deposit, you can sue in small claims court and potentially recover three times the amount wrongfully kept, plus attorney’s fees and court costs.

Yep, that’s right. Three times the amount. If your landlord illegally keeps $500, you could recover $1,500. If they keep $2,000 illegally, you could recover $6,000.

The New York State Attorney General also investigates complaints about improper deposit handling. They can pursue cases where landlords consistently fail to return deposits properly.

The law puts the burden of proof on the landlord. If you dispute a deduction, the landlord must prove the deduction was justified and not willful misconduct. You don’t have to prove anything first.

Special Circumstances: Rent Stabilized Apartments

For years, rent-stabilized tenants didn’t have the same deposit protections as market-rate tenants. That changed on November 15, 2025.

Now, rent-stabilized tenants get the same rules: one month’s rent maximum, 14-day return deadline, itemized statements, and walk-through rights. Landlords of rent-stabilized buildings must follow these rules just like everyone else.

This matters because hundreds of thousands of New Yorkers live in rent-stabilized apartments. They now have stronger legal protections around deposits.

What Happens When a Building Sells

Wondering what happens to your deposit if the landlord sells the building? Good question.

When property transfers to a new owner, the old owner must transfer your security deposit to the new owner within five days, or return it to you. The new owner becomes responsible for your deposit and must still follow all the rules about returns, interest, and itemized statements.

The new owner can demand that an escrow account be opened to hold deposits properly. This protects you because the new owner can’t claim they never received your deposit or lose track of it.

You should receive written notice of the transfer with the new owner’s information. Keep this notice for your records.

How to File a Complaint If Your Landlord Violates the Law

Let’s say your landlord isn’t following the rules. What do you do?

First, send a written demand letter to your landlord asking for your full deposit plus interest (if applicable). Keep a copy and send it via certified mail so you have proof they received it.

If your landlord refuses, you have a few options. For non-rent-stabilized apartments, you can file a complaint with the New York State Attorney General. They investigate complaints about improper deposit handling, failure to provide interest, and failure to return deposits within 14 days.

For disputes about how much was deducted or whether deductions were justified, you’ll likely need to file a case in small claims court. This is where you seek damages including treble damages (three times the wrongfully withheld amount), plus attorney’s fees.

For rent-stabilized apartments, you can also file a complaint with New York State Homes and Community Renewal (HCR), the agency that administers rent laws. They can investigate violations and help resolve disputes.

Don’t assume you’re stuck. You have legal recourse, and the law is on your side if your landlord is breaking the rules.

Application Fees and Other Charges to Know About

While we’re talking about money upfront, let’s cover other fees your landlord might try to charge.

Application fees are capped at $20 in New York. That’s it. If a landlord asks for $50 or $100 just to apply for an apartment, that’s illegal.

Your landlord cannot charge a separate “move-in fee.” Everything upfront is either rent, a security deposit, or an application fee. Nothing else.

Bounced check fees cannot exceed what your landlord’s bank actually charged them. So if the bank charged $35, the landlord can charge $35 but not $50. This prevents landlords from turning a mistake into a profit.

Last month’s rent cannot be charged as part of your initial deposit or as a separate fee. Last month’s rent is due with your last month of tenancy, not upfront.

Frequently Asked Questions

Can my landlord charge more if I have a pet?

No. The security deposit limit is one month’s rent regardless of pets. However, if your lease specifically mentions pet damage, the landlord can potentially make a deduction later if the pet actually caused damage. But they cannot charge an upfront pet fee as an additional deposit.

What if the landlord says they’ll use my deposit as last month’s rent?

That’s illegal. Your security deposit and last month’s rent are completely separate. If your lease says this, that clause is void. You should never agree to treat the deposit as last month’s rent, and if your landlord does this, report them to the Attorney General.

Can I withhold my deposit if the landlord doesn’t make repairs?

No, you cannot withhold your deposit as punishment or leverage. You must pay your rent and deposit as agreed. If your landlord doesn’t make repairs, that’s a separate complaint to the Housing Court or Attorney General, not something you handle by keeping money.

What qualifies as normal wear and tear?

Normal wear and tear includes scuffed floors, faded paint, minor wall dings from picture frames, worn carpet, and small marks from general living. If you lived there for five years, the carpet will show wear. That’s normal. The landlord cannot charge you to replace it just because time has passed.

What if I disagree with the deductions my landlord made?

Send a written response disputing the charges. If you don’t reach an agreement, you can file in small claims court. The landlord must prove their deductions were reasonable and necessary. You don’t have to prove anything. The burden is on the landlord.

What should I do to protect my deposit before moving out?

Take photos or video of the apartment in good condition before moving in. Request the pre-exit walk-through one month before leaving. Fix any damage you caused. Deep clean the apartment. Document the final condition with photos or video. Get copies of all communication with your landlord in writing. These steps protect you if disputes arise later.

Final Thoughts

New York’s security deposit laws are designed to protect you. Landlords cannot ignore these rules without facing serious penalties. Three times the deposit amount is a major deterrent, and the state takes violations seriously.

Now you know the basics. Stay informed, keep records of all deposits and communications, and don’t hesitate to contact the Attorney General’s office if something feels wrong. Your deposit is your money. Make sure your landlord respects that.