New York Security Deposit Rules 2026: The 5 Changes to Know

TL;DR: New York law caps security deposits at one month's rent for most residential leases, requires landlords with six or more units to hold deposits in an interest-bearing account, and gives tenants 14 days after move-out to receive their money back with an itemized list of any deductions. Landlords who miss the deadline or skip the itemization can forfeit the right to keep any part of the deposit, even for legitimate damage.

_Last reviewed: August 2026 · 7 min read_

If you own rental property in New York, the security deposit rules changed enough in recent years that old habits can now cost you the whole deposit. This isn't a minor paperwork issue. Miss the 14-day window or skip the itemized statement, and a court can order you to return every dollar, damage or not.

Okoniq Property Hub keeps a running record of each tenant's deposit amount, move-in date, and deduction notes, so you're not scrambling to reconstruct the paper trail when a tenant moves out.

How much can a landlord charge for a security deposit in New York?

One month's rent is the cap for most residential tenancies in New York State. This rule came out of the Housing Stability and Tenant Protection Act of 2019 (HSTPA) and applies statewide, not just in New York City. If your unit rents for $2,200 a month, $2,200 is the maximum deposit you can collect, full stop, regardless of a tenant's credit history, pets, or income level.

There's no separate "pet deposit" or "last month's rent plus security" workaround anymore. Landlords who ask for more than one month's rent as security, even if labeled differently, risk having the excess ruled unenforceable. If you're drafting or updating your lease template, this is one of several clauses worth double-checking; see 7 lease clauses every independent landlord should understand for the others that trip people up most often.

Does a New York landlord owe interest on a tenant's deposit?

Yes, but only in buildings with six or more residential units. In those buildings, the deposit must sit in an interest-bearing account, and the landlord must either pay the accrued interest to the tenant annually or credit it against rent, minus a small administrative fee capped by statute (historically 1% per year). Smaller buildings under six units aren't required to pay interest, though some landlords choose to anyway for goodwill.

The interest requirement is easy to overlook because it doesn't come up until move-out or an annual accounting request. We cover the mechanics, including how the fee cap works and what counts as an acceptable account, in do you owe interest on a tenant's security deposit. If you manage more than one property, track this per unit, not per building, since a mixed portfolio can put you on both sides of the six-unit line.

What's the deadline to return a security deposit after move-out?

14 days. New York landlords must return the deposit, or the remaining balance after lawful deductions, within 14 days of the tenant vacating. Along with the refund, you're required to send an itemized statement listing each deduction and its cost, whether that's for a broken window, unpaid utility charge, or cleaning beyond normal wear.

If you don't send the itemized statement, or you send it late, you lose the right to keep any portion of the deposit even if the damage was real and documented in photos. This is the part that catches independent landlords off guard the most, because in many other states a late refund just means paying a penalty, not forfeiting the entire claim.

| Requirement | New York Rule | Common Mistake | |---|---|---| | Return deadline | 14 days after move-out | Waiting until the next rent cycle | | Itemized statement | Required with every deduction | Sending a lump-sum number only | | Deposit cap | One month's rent | Charging extra for pets or furnishings | | Interest (6+ units) | Must be paid or credited annually | Forgetting buildings over 5 units |

Keeping a written move-in and move-out condition report solves most of this. Photograph the unit at both ends of the tenancy, timestamp the files, and log the dates so the 14-day clock doesn't sneak up on you.

What happens if a landlord violates New York's deposit rules?

Tenants can sue for the full deposit back, plus in some cases additional damages, and small claims court in New York doesn't require a lawyer to file. Judges have little sympathy for landlords who missed the 14-day window or skipped the itemized statement, because the law is written to make compliance the tenant's default expectation. A $2,000 dispute that could have been a five-minute email turns into a court date, a judgment, and a mark against your reputation with future applicants who check public records.

Beyond the deposit itself, a pattern of noncompliance can surface during tenant screening disputes or fair housing complaints, since attorneys reviewing one issue often pull the whole file. If you're tightening up your screening and lease process generally, it's worth reviewing Fair Housing Act — what landlords cannot ask alongside your deposit procedures, since both areas get scrutinized together when a tenant dispute escalates.

Do these rules apply the same way in New York City as the rest of the state?

Mostly yes, with a few added layers in the five boroughs. NYC has additional requirements around rent-stabilized units and specific disclosure forms, but the one-month cap, the 14-day return window, and the itemization rule apply statewide under HSTPA. If you own property both upstate and in the city, don't assume city-specific guidance covers your suburban units, and don't assume state minimums are enough inside NYC limits. When in doubt, check with your local housing court or an attorney familiar with the specific county.

FAQ

Can a New York landlord charge a nonrefundable deposit?

No. Under HSTPA, security deposits in New York must be fully refundable minus lawful deductions for damage or unpaid rent. Any fee labeled "nonrefundable" as part of the security deposit is not enforceable, though separate, disclosed application fees are handled differently.

What can a landlord legally deduct from a security deposit in New York?

Unpaid rent, damage beyond normal wear and tear, and costs tied directly to lease violations are the main allowable deductions. Routine wear like faded paint or worn carpet from normal living does not qualify, and deductions must be itemized with actual costs, not estimates.

Is there a limit on late fees separate from the security deposit cap?

Yes, New York caps late fees at $50 or 5% of the monthly rent, whichever is lower, and this is separate from the one-month security deposit cap. Landlords sometimes confuse the two caps when drafting lease language.

What if a tenant moved out and left no forwarding address?

Send the itemized statement and any refund to the last known address, which is usually the rental unit itself, and keep proof of mailing. Courts generally accept a documented good-faith attempt even if mail is returned undeliverable.

Do these deposit rules apply to short-term or month-to-month rentals?

Yes, the one-month cap and 14-day return rule apply to residential tenancies generally, including month-to-month arrangements, though short-term stays under 30 days through platforms like Airbnb may fall under different regulations. Check your specific lease type if you're unsure which framework applies.

This is educational information, not legal advice. Consult a New York landlord-tenant attorney or your local housing court for guidance specific to your property and county.