This is everything you need to know about your security deposit, and how to ensure you get it back at the end of a rental lease.
New York City is one of the most expensive places to live in the United States and its cost of living ranks 7th out of 512 cities in the world. The biggest factor contributing to NYC’s high cost of living is housing. In fact, only 32.8% of NYC’s population are homeowners with the rest of the population, around two-thirds, being renters.
NYC is one of the few cities in the U.S. where renters make up such a large portion of the population. However, the large number of renters in the city doesn’t equate to low rent. While the median home price in NYC is $1,628,124, the median rent price is $5,100/month. Rental cost can also vary depending on what borough and neighborhood you choose to settle in, with some being a lot more pricey than others.
With the high cost of rent along with the competitive real estate market, things can get confusing for first time renters. So let’s tackle one important factor when renting out an apartment: the security deposit.
Security deposit in New York City
So what is the security deposit and what is it for? A security deposit is the sum of money the renter pays to the landlord or property management when the lease is signed along with application fees and first month’s rent.
The payment is used to cover damages to their property that are beyond normal wear and tear and if the tenant leaves earlier than the lease without paying. Essentially, a security deposit is insurance for the landlord in case of unpredictable residents. However, they are also refundable and tenants can get their money back after the lease is over if the apartment is left in good condition.
Landlord security deposit rules vary from state to state so you need to know beforehand how much you can expect to pay, if the landlord can use it and for what, where your deposit will be kept, and when you can expect to get it back. For NYC, The Housing Stability and Tenant Protection Act of 2019 enacted various positive changes for renters, but also limits security deposits to one month’s rent at most. Additionally, a landlord has to return a tenant’s security depository within 14 days after they have completely moved out of the apartment and returned the keys.
In the State of New York, the deposit can also be placed in the bank, but landlords have to tell tenants the name and address of the bank it is being held in along with the amount of the deposit. For those living in non regulated buildings with six or more units, landlords also have to pay tenants interest on the security deposit. This can be in the form of interest being subtracted from the rent, paid at the end of every year, or paid at the end of the lease.
What can a landlord deduct from a security deposit?
Now that we’ve covered some important details and NYC laws about the security deposit, you may be wondering how much a landlord can take from the deposit and what they can spend it on. According to The Housing Stability and Tenant Protection Act of 2019, it states that the security deposit must be returned in full except under certain circumstances.
This includes “non-payment of rent, damage caused by the tenant beyond normal wear and tear, non-payment of utility charges payable directly to the landlord under the terms of the lease or tenancy, and moving and storage of the tenant’s belongings.” Additionally, if any money was taken out of the deposit, the landlord must provide the tenant with an itemized statement to show why some of it was withheld.
So what is considered normal wear and tear and are nail holes normal wear and tear for deposit? Normal wear and tear can include things such as faded paint, curtains faded by the sun, moderate dirt or spotting on the carpet, a few small tack or nail holes on the wall, minor marks on the wall, etc. As long as there is no excessive damage, stains, or filth created by the tenant then the deposit cannot be used.
How do I get my security deposit back?
Here are a few tips on how you can make sure to get your security deposit back in full:
1. Conduct a walk through
After signing your apartment lease, make sure to walk through and inspect the space for any pre-existing damages. Make sure to get these details noted by the landlord so you won’t get charged for them after leaving the apartment when the lease ends. Additionally, ask to be there when the landlord does a final inspection of the apartment so you can fix any problems.
2. Give your notice in writing and on time
Depending on the state, tenants are legally required to give landlords their notice within a specific time frame before moving out. In the State of New York, residents are required to give their notice within one month of moving out. Make sure to get your notice in writing and send it by certified mail in case you end up needing to fight for your deposit back.
3. Make sure all damages are repaired
When moving out, make sure to clean everything thoroughly and fix any damages done to the apartment. If you’re unsure about your landlord’s expectations for the apartment, be sure to ask beforehand and talk to them about your cleaning plans. Then take photos and videos of the apartment after you’re done to document the state in which you left it.
4. Don’t leave belongings behind and return the keys
Make sure you remove everything in the apartment including any food, garbage, or cleaning supplies. In NYC, landlords are required to return the security deposit within 14 days of the tenant moving out and returning the keys. So make sure to return all of your keys to the landlord once you are done moving everything out.
5. Give your landlord your forwarding address
Be sure to give your landlord your new address so they are able to contact you in order to return your deposit along with the itemized deductions list.
What to do if you don’t get back your security deposit?
If you don’t get your security deposit back or don’t agree with your landlord’s deductions to the deposit, then there are some actions you can take in order to get the money back.
If you’re unhappy with your landlord’s deductions to your security deposit or if they have broken the state’s security deposit law in any way, you can first try to negotiate and come to an agreement with your landlord. Make sure you put any agreement in writing and signed by both of you so it is a legal contract.
Write a demand letter
If negotiating with your landlord doesn’t work, you can then write a demand letter asking for the return of the deposit. It should include the main facts, your legal rights, what you want, and your intent to sue in small claims court if necessary.
Small claims court
If your landlord doesn’t respond by the deadline or you are unable to come to an agreement, you can file a lawsuit against them in small claims court. This usually costs less than $50 and you don’t need a lawyer. You can sue for the amount of the security deposit your landlord withheld, up to NY’s state limit of $5,000.
A few pieces of evidence for your case you should take to court would be:
- A copy of your demand letter and other correspondence you’ve had with your landlord about the deposit
- A copy of the signed lease and any noted pre-existing damages to the apartment before initial move-in
- Any photos or videos from your move-in and move-out to show the state of the apartment
- A clear statement of how much money you claim your landlord owes you along with any interest if applicable
- A copy of New York’s security deposit law
- One or two witnesses that are familiar with your apartment and will testify that you left the property clean and in good condition
- Anything else that is relevant to your case
While renting an apartment in New York City can be confusing to navigate at first, knowing your rights and laws regarding security deposits is just one step needed so you can confidently apartment hunt in NYC.
If you’re looking to move in NYC, Localize is a great resource in finding your perfect space. We help simplify the home searching process by providing insights on every listing.