New York caps most residential security deposits at one month’s rent and requires a landlord to return the deposit within 14 days after a tenant moves out, both set by N.Y. Gen. Oblig. Law § 7-108. These rules were rewritten by the 2019 Housing Stability and Tenant Protection Act. This article covers the maximum deposit, the return deadline, what a landlord can lawfully keep, how deposits must be held, and the penalties for keeping too much. It is one of the topics covered in New York landlord-tenant law.
The one-month cap on New York security deposits
Since the 2019 rent law, a landlord cannot collect a security deposit or advance greater than one month’s rent. Under N.Y. Gen. Oblig. Law § 7-108(1-a)(a), no deposit or advance may exceed the amount of one month’s rent. The cap covers deposits and advances together, so a landlord cannot collect both a full month’s security deposit and a separate last month’s rent when the total runs over one month. As of 2026, this one-month limit applies to most residential rentals across the state, and the New York Attorney General’s guidance on security deposits states the same limit.
A few categories fall outside these rules. Section 7-108 exempts units subject to New York City’s rent control or the emergency housing rent control law, continuing care retirement communities, assisted living residences, adult care facilities, and certain senior and not-for-profit retirement communities. Rent-stabilized deposits are governed separately under N.Y. Gen. Oblig. Law § 7-107, and rent stabilization in New York City carries its own coverage rules. Seasonal rentals and owner-occupied cooperative apartments have their own treatment under the same statute.
The 14-day deadline to return a deposit
When a tenant moves out, the landlord has 14 days to return the deposit and provide an itemized statement of anything kept. Section 7-108(1-a)(e) requires that, within fourteen days after the tenant has vacated, the landlord provide an itemized statement of the basis for any amount retained and return the rest. The same provision adds that a landlord who fails to deliver the statement and deposit within 14 days forfeits any right to retain any portion of the deposit.
The clock runs from the move-out date, not the last day of the lease term. A tenant ending a lease early, such as when breaking a lease without penalty in New York, faces the same 14-day timeline once possession goes back to the landlord.
What a landlord can deduct
A landlord can keep part of the deposit only for specific, itemized costs. Under Section 7-108(1-a)(b), deductions are limited to unpaid rent, damage beyond normal wear and tear, unpaid utility charges the tenant owed the landlord directly under the lease, and the cost of moving and storing the tenant’s belongings. The same paragraph bars a landlord from keeping any amount for ordinary wear and tear or for damage a prior tenant caused.
Ordinary wear, such as faded paint, lightly worn carpet, or small nail holes, is the landlord’s cost of maintaining the unit. Conditions the landlord is separately required to repair under New York’s warranty of habitability cannot be shifted onto the tenant’s deposit. A lease cannot expand the list of allowable deductions, though it can record the deposit amount and the unit’s move-in condition, which is one of the items covered in what a residential lease must include in New York.
Move-in and move-out inspections
New York gives tenants two inspection rights that shape what a landlord can later deduct, both set out in Section 7-108(1-a)(c)–(d).
Request a move-in inspection
After signing the lease but before occupancy begins, you can ask to inspect the unit with the landlord. If you request it, the parties sign a written statement noting existing defects. The landlord cannot later deduct from the deposit for any condition listed in that statement.
Watch for the move-out notice
After either party gives notice to end the tenancy, the landlord must tell the tenant in writing of the right to a pre-move-out inspection. This notice is not required when the tenant gives less than two weeks’ notice.
Attend the move-out inspection
A requested inspection happens no earlier than two weeks and no later than one week before the tenancy ends, with at least 48 hours’ written notice of the date and time. The landlord then gives the tenant an itemized list of proposed repairs or cleaning.
Cure the listed items
The tenant has the chance to fix the items on that list before moving out. Curing a listed condition removes it as a basis for keeping part of the deposit.
How deposits must be held
A security deposit stays the tenant’s money. Under N.Y. Gen. Oblig. Law § 7-103(1), the landlord holds the deposit in trust and cannot mingle it with personal funds or treat it as the landlord’s own asset. In a building with six or more family dwelling units, the landlord must place the deposit in an interest-bearing New York bank account that pays the prevailing rate, may keep 1% of the deposit per year as an administrative fee, and must pay the remaining interest to the tenant. The landlord also has to notify the tenant in writing of the name and address of the bank holding the deposit. New York Homes and Community Renewal explains these rules on leases and security deposits for tenants and owners.
When a landlord keeps too much: damages and enforcement
If a tenant disputes a deduction, the landlord, not the tenant, carries the burden of proving that the amount kept was reasonable, under Section 7-108(1-a)(f). A landlord who violates the deposit rules is liable for the tenant’s actual damages, and a landlord found to have acted willfully can owe punitive damages of up to twice the amount of the deposit under Section 7-108(1-a)(g).
Tenants recovering a deposit commonly file in small claims court, where the dispute usually turns on whether the landlord met the 14-day deadline, itemized the deductions, and can document the claimed damage. The New York Attorney General’s office also publishes guidance on recovering security deposits and interest.
Frequently asked questions
Can a landlord charge more than one month’s rent as a security deposit in New York?
No, for most residential units. Section 7-108(1-a)(a) caps the deposit or advance at one month’s rent. The cap includes prepaid rent held as security, so a landlord cannot collect a full month’s deposit plus a separate last month’s rent when the combined amount exceeds one month. Rent-controlled units and certain senior-care housing are exempt from this cap.
Does a landlord have to pay interest on a security deposit?
It depends on the building size. In a building with six or more family dwelling units, Section 7-103 requires the deposit to sit in an interest-bearing account at the prevailing rate; the landlord keeps 1% per year as an administrative fee and pays the rest to the tenant. Smaller buildings are not required to place deposits in interest-bearing accounts, though the deposit still must be held in trust.
What happens if a landlord misses the 14-day deadline?
Section 7-108(1-a)(e) states that a landlord who fails to provide the itemized statement and return the deposit within 14 days forfeits any right to retain any portion of it. That forfeiture applies even where the unit had damage the landlord could otherwise have charged for.
Can a landlord deduct for repainting or normal wear and tear?
No. Section 7-108(1-a)(b) bars deductions for ordinary wear and tear and for damage caused by a prior tenant. Allowable deductions are limited to unpaid rent, damage beyond normal wear and tear, unpaid utility charges owed directly to the landlord, and moving and storage costs. In a dispute, the landlord bears the burden of showing the deduction was reasonable.
Do these rules apply to rent-stabilized or rent-controlled apartments?
Not in the same way. The one-month cap and the 14-day rules in Section 7-108 exempt units under New York City rent control and the emergency housing rent control law. Rent-stabilized deposits are governed separately under Section 7-107. Tenants in regulated housing can confirm which rules apply through New York Homes and Community Renewal.