NY Security Deposit 1-Month Limit FAQ (GOL §7-108)

Under New York’s post-HSTPA regime, residential security deposits are capped at one month’s rent, must be returned within 14 days, and are subject to itemized-statement requirements that, if missed, forfeit the entire deposit. This FAQ answers the questions tenants and landlords most often ask about General Obligations Law (GOL) §7-108 as amended in 2019.

The rules below apply statewide to residential leases — free-market and rent-stabilized, NYC and beyond. They do not apply to non-residential commercial leases.

Q1. What is the maximum security deposit a NY landlord can collect?

One month’s rent. Under GOL §7-108(1-a)(a), a landlord renting a residential unit cannot demand or receive any deposit, advance, or fee exceeding the equivalent of one month’s rent. This cap applies to security deposits, advances, and any combination of them. “Last month’s rent” collected at signing counts toward the cap.

If the rent is USD 3,000/month, the maximum collectible at signing is first month’s rent (USD 3,000) + 1 month security (USD 3,000) = USD 6,000 total. That is the entire upfront amount permitted by law.

Primary source — NYS GOL §7-108: https://www.nysenate.gov/legislation/laws/GOB/7-108

Q2. Can the landlord charge a separate pet deposit?

No. A pet deposit, key deposit, cleaning deposit, parking deposit, or any other “deposit” labeled differently still counts toward the GOL §7-108(1-a) 1-month cap. The legislature deliberately drafted the statute broadly to prevent labeling games.

The landlord may charge monthly pet rent (an addition to the recurring monthly rent) but cannot collect a one-time pet deposit on top of the 1-month security.

Q3. Can the landlord charge “first month + last month + security”?

No — that’s three months upfront. The historical pre-2019 practice of collecting first + last + security violates GOL §7-108(1-a) because “last month’s rent” collected in advance counts as a deposit and pushes the total beyond the 1-month cap.

A renewal lease that continues to require a “last month’s rent” balance from a pre-2019 deposit must be reconciled at renewal — the landlord must return any amount in excess of one month’s rent.

Q4. Where must the deposit be held?

Under GOL §7-103, every residential security deposit must be held in trust, separate from the landlord’s personal or operating funds. Commingling is itself a statutory violation regardless of whether the deposit is ultimately returned.

For buildings with 6 or more residential units, GOL §7-103(2-a) requires the deposit to be held in an interest-bearing account at a New York bank, with the interest belonging to the tenant (less an administrative fee not exceeding 1% per annum). The landlord must give the tenant the name and address of the bank where the deposit is held.

Buildings with fewer than 6 units may hold the deposit in a non-interest-bearing trust account, but it still must be segregated from the landlord’s funds.

Q5. When must the deposit be returned?

Within 14 days of the tenant vacating. Under GOL §7-108(1-a)(e), the landlord must return the deposit, less any lawful deductions, accompanied by an itemized statement describing each deduction, within 14 days of the tenant surrendering possession of the premises.

The 14 days are calendar days. They run from the day the tenant returns the keys and vacates, not from the lease end date if the tenant left earlier.

Q6. What can the landlord lawfully deduct from the deposit?

Under GOL §7-108(1-a)(c), the landlord may deduct:

• Unpaid rent owed at the end of the tenancy
• Damages caused by the tenant’s wilful or negligent acts beyond ordinary wear and tear
• Reasonable cleaning costs if the tenant left the unit in unsanitary condition

The landlord may not deduct:

• Ordinary wear and tear — explicitly excluded under GOL §7-108(1-a)(c)
• Costs the landlord would have incurred regardless of the tenant (routine repainting, carpet replacement at end of useful life)
• Renovations that benefit the next tenant (kitchen upgrade, fixture replacement)

Each deduction must be supported by receipts or invoices and disclosed in the itemized statement.

Q7. What happens if the landlord doesn’t return the deposit on time?

Under GOL §7-108(1-a)(g), the landlord forfeits the right to retain any portion of the deposit if the deposit is not returned with itemized statement within 14 days. The tenant is entitled to the full deposit back plus, where the violation is willful, double damages (twice the wrongfully withheld amount). The tenant may sue in Small Claims Court for amounts up to USD 10,000 (filing fee USD 20, no attorney required).

Small Claims Court actions for unreturned deposits are common in NYC and represent the most enforced HSTPA provision. Landlords overwhelmingly lose these cases when they have failed to provide an itemized statement on time.

Q8. Can the tenant request a pre-move-out inspection?

Yes. Under GOL §7-108(1-a)(d), the tenant may request, in writing, a pre-move-out inspection conducted between 1 and 2 weeks before move-out. The landlord must then:

1. Conduct the inspection at a mutually agreed time
2. Provide the tenant with an itemized list of conditions the landlord intends to charge against the deposit
3. Give the tenant the opportunity to cure those conditions before vacating

This pre-move-out inspection is a tenant right, not a landlord prerogative. Tenants who use it dramatically improve their odds of full deposit return.

Q9. Does this apply to rent-stabilized apartments too?

Yes. GOL §7-108(1-a) applies to all residential leases in New York — free-market, rent-stabilized, ETPA-covered, and rent-controlled. The 1-month cap does not change based on stabilization status.

Rent-stabilized landlords have the additional obligation to attach the DHCR Rent Stabilized Lease Rider RA-LR1 to every lease and renewal under 9 NYCRR §2522.5(c)(1), but the deposit cap is identical.

Q10. Does this apply to short-term and vacation rentals?

The 1-month deposit cap applies to residential leases of dwelling units. True transient short-term rentals (under 30 days, hotel-style) operate under different rules. However, NYC’s Local Law 18 and 22 have effectively eliminated most short-term rentals, so this distinction matters less in practice now.

A “month-to-month” lease of a residential unit is residential under GOL §7-108(1-a) — even though it is short, the 1-month cap applies.

Q11. Are there penalties for the landlord beyond returning the deposit?

Yes — three layers stack:

1. Forfeiture of the right to retain any deposit (GOL §7-108(1-a)(g))
2. Double damages for willful violation (GOL §7-108(1-a)(g))
3. Attorney’s fees if a reciprocal-attorney-fee provision exists in the lease (RPL §234)

A pattern of late returns can also expose the landlord to a General Business Law §349 deceptive acts claim, particularly if the landlord operates multiple buildings and routinely fails to return deposits.

Q12. What’s the practical playbook for tenants?

1. At lease signing: confirm the deposit equals exactly 1 month’s rent, no more.
2. During tenancy: keep the bank-name disclosure (for 6+ unit buildings).
3. At move-out: request the pre-move-out inspection in writing 2 weeks before vacating.
4. At surrender: photograph and video the entire unit on the day of move-out, with date stamps.
5. After move-out: mark day 14 on the calendar. If no return + itemized statement arrives, file Small Claims Court immediately.
6. In court: bring the lease, the deposit receipt, the move-out photographs, and any landlord correspondence. Most cases settle at the first appearance.

Q13. What’s the practical playbook for landlords?

1. At lease signing: collect exactly 1 month security, no more, and segregate it.
2. During tenancy: if 6+ units, use an interest-bearing account and pay annual interest (less 1%).
3. Pre-move-out: offer the inspection if tenant requests; document the unit condition.
4. At move-out: complete the unit walk-through within 7 days.
5. By day 14: mail the deposit balance + itemized statement with receipts via certified mail.
6. Retain documentation for 3 years minimum (statute of limitations on contract claims).

The 14-day deadline is the single most important date in the post-HSTPA tenancy. Missing it is the most expensive operational error a NY landlord can make.

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Legal information, not legal advice. MmowW Scrib🐮 is operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not US attorneys.

Sources

1. NY General Obligations Law §7-108 — https://www.nysenate.gov/legislation/laws/GOB/7-108
2. NY General Obligations Law §7-103 — https://www.nysenate.gov/legislation/laws/GOB/7-103
3. NYS Senate, Laws of 2019 c.36 (HSTPA) — https://www.nysenate.gov/legislation/laws/2019/36
4. DHCR Fact Sheet #9 — Security Deposits — https://hcr.ny.gov/fact-sheet-9
5. NYC Rent Guidelines Board — Security Deposits FAQ — https://rentguidelinesboard.cityofnewyork.us/resources/faqs/security-deposits/