George E. Pataki, Governor         Joseph H. Holland, Commissioner

                   A publication of New York State
               Division of Housing and Community Renewal
                      Office of Rent Administration

                    Fact Sheet #9 - Security Deposit
                             [Revised 2/96]

    A security deposit is money that a tenant deposits with the owner of the
apartment for the repair of any damages to the apartment for which tenant is

    The amount of a security deposit for a rent regulated apartment is usually
limited by law to one month's rent. However, if two months  security deposit
was collected from a tenant by the owner when the apartment first came under
rent stabilization, and the same tenant is still occupying the apartment, that
tenant remains bound by the two months requirement. The next tenant cannot be
required to deposit more than one month's rent as security.

    When a lease is renewed at a higher rental amount, or the rent is increased
during the term of the lease, the owner can collect additional money from the
tenant to bring the security deposit up to the new monthly rent. Even though a
tenant may be exempt from paying a lease increase because of his or her Senior
Citizen Rent Increase Exemption (SCRIE), (See Fact Sheet #21, Special Rights
of Senior Citizens), the tenant must still pay the increased security.

    The security deposit must be kept by the owner in an interest-bearing
account in a New York State bank. The owner must notify the tenant of the name
and address of the bank and credit the tenant the full annual interest, less
1% of the security deposit per year for the owner s administrative costs. The
tenant can choose whether the interest is to be subtracted from the rent, held
in trust until the end of the tenancy, or paid in a lump sum at the end of
each year.

    A  security deposit should not be used as a final month's rent. At the end
of the lease, if the tenant honored the terms and conditions of the lease and
left the apartment in the same condition as it was when rented, except for
normal wear, the owner must return the full security deposit. If damage was
done, the owner may apply part or all of the security deposit to the cost of

    If the tenant disagrees with the owner over the security deposit or
interest, and if the problem is building-wide, the tenant may contact the
Consumer Frauds and Protection Bureau of the New York State Attorney General's
Office. Where the problem is not building-wide, the tenant may begin a
proceeding in small claims court. The tenant can file a "Tenant's Complaint of
Rent Overcharges and/or Excess Security Deposit" (DHCR Form RA-89) if the
owner demands and the tenant pays more than one month's security.

    For more information or assistance, call the DHCR Rent InfoLine (718) 739-
6400, or visit your Borough or County Rent Office.

92-31 Union Hall Street
4th Floor
Jamaica, NY 11433
(718) 739-6400

250 Schermerhorn Street
3rd Floor
Brooklyn, NY 11201

Upper Manhattan
163 W. 125th Street
5th Floor
New York, NY 10027
North side of 110th St. and above

Nassau County
50 Clinton Street
6th Floor
Hempstead, NY 11550

Westchester County
55 Church Street
White Plains, NY 10601

Lower Manhattan
156 William Street
9th Floor
New York, NY 10038
South side of 110th St. and below

1 Fordham Plaza
2nd Floor
Bronx, NY 10458

Staten Island
60 Bay Street
7th Floor
Staten Island, NY 10301

Rockland County
94-96 North Main Street
Spring Valley, NY 10977

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