Security Deposits in New York (GOL § 7-108): The 14-Day Rule and What Landlords Can Deduct

Since the 2019 Housing Stability and Tenant Protection Act rewrote General Obligations Law § 7-108, New York's residential security deposit rules have real teeth, and the deadlines are short enough that cases are often won or lost on the calendar alone.

The one-month cap

For covered residential tenancies, the deposit or advance cannot exceed one month's rent. Demands for first month, last month, and a deposit together exceed the cap; the last-month demand is the usual offender.

The 14-day rule

After the tenant vacates, the landlord has fourteen days to return the deposit. If anything is withheld, the landlord must provide an itemized statement of the basis within that same window. The consequence for missing it is the part practitioners quote: the landlord forfeits any right to retain any portion of the deposit. Courts have applied the forfeiture as written, which makes the mailing date of the itemized statement a dispositive fact worth establishing early in any deposit dispute.

What may be deducted

The permissible bases are narrow: unpaid rent, damage beyond ordinary wear and tear, moving and storage of the tenant's belongings, and unpaid utility charges owed to the landlord. Ordinary wear is not damage; repainting after a multi-year tenancy and worn carpet in traffic paths belong to the landlord's cost of doing business, while broken fixtures and holes in walls do not.

The walk-through rights

The statute also gives tenants process: on request, an inspection before move-out, with notice of what the landlord intends to claim and an opportunity to cure before vacating. Skipped process strengthens the tenant's hand in the ensuing dispute.

Willful violations

A knowing violation of the deposit provisions can expose the landlord to punitive damages of up to twice the deposit. Between forfeiture and the punitive exposure, the economics of wrongly withholding a deposit have inverted since 2019.

Ask Casewise about a deposit dispute and the answer quotes § 7-108's actual text, word-for-word verified against the statute, with the decisions applying it. It is one of our free sample questions: no sign-up needed, at casewise.si.