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Security Deposit Requirements, two-year leases, 2021

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Security Deposit Requirements, two-year leases, 2021

Postby backhoe » Thu Sep 10, 2020 3:56 pm

I'm renewing my lease as of early next year. One year, no increase, the following year,a small increase. Question is, what about the security deposit? When is that paid? Now or in one year, when the rent goes up?

The new RTP-8 form reminds landlords of the need to freeze rents the first year, but is silent as to when the increased security (owing to the rent hike in the second year) is due.

Does anyone know?
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Re: Security Deposit Requirements, two-year leases, 2021

Postby TenantNet » Thu Sep 10, 2020 9:11 pm

DHCR takes the position that the deposit must always be equal to one month's rent. So with that in mind, I would say any increase is not due until the second year, and then only if the LL demands it.

Some leases do not say a deposit of "one month" is required. They might state a specific dollar amount, usually the level of the initial rent for the tenancy. In such cases, in our view, your deposit would not increase as the rent increases over the years. However, we've seen no decisions on this point and have no idea how the courts would view a tenant's assertion.

Depends if you want to fight or not.
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Re: Security Deposit Requirements, two-year leases, 2021

Postby backhoe » Fri Sep 11, 2020 12:57 pm

Note the boldface notice at the back of the new RTP-8
https://hcr.ny.gov/system/files/documen ... /rtp-8.pdf

"However, pursuant to the Housing Stability and Tenant Protection Act of 2019, an owner can hold no more than one month security deposit.Anything in excess of one month must be refunded to the tenant"
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Re: Security Deposit Requirements, two-year leases, 2021

Postby TenantNet » Fri Sep 11, 2020 10:09 pm

Right, it says the LL can only have one month deposit. That's the maximum. Nothing says he can't have something less than that. I have seen tenant attorneys argue that the dollar amount listed in the initial lease is the maximum, and cannot increase. That seems to be in contravention of DHCR's view, but I have seen it. However, I have not seen any decisions on the issue.

Your question appears to be when the increase (in a 2-year renewal) is collectible. As I said, out view is that since this coming RGB year has a zero increase, then you don't increase it now. But as the following year does have an increase, the deposit increase would be collectible at the start of the 2nd year.

While DHCR makes their position clear, I do not think they have the authority to enforce it, as DHCR cannot actually evict tenants. A court would have to do that, and it would need to be a holdover, not a non-pay, as the LL would argue that failure to increase the deposit would be a violation of the lease. Deposits are not rent.
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