What Can a Landlord Legally Deduct from a Security Deposit in NYC?

January 10, 2026

Ever gotten your security deposit back from a NYC landlord and scratched your head at the deductions? You're not alone-disputes over these refunds spark thousands of Housing Court cases yearly, per city records.

Tip: Want to sanity-check a specific address? Search it on Building Health X to see recent heat/hot water, pests, noise, safety and violations across 30/90 days, 1 year and 3 years.

This guide breaks it down: legal limits, what's fair game like unpaid rent, damage beyond normal wear and tear, cleaning fees, and more-plus your rights to fight back. Stick around to protect your cash!

NYC Security Deposit Basics

In NYC, landlords can charge a maximum security deposit of one month's rent under RPL 7-108, which must be returned within 14 days or itemized deductions provided per Local Law 1 of 2004.

Landlords must hold the security deposit in an interest-bearing account at a New York bank. They pay interest annually by January 31st under Housing Maintenance Code 27-2108. Tenants receive this interest, helping protect their funds during the lease.

Move-in documentation sets the stage for fair security deposit returns. Landlords and tenants should document the apartment's condition with photos and a checklist. This prevents disputes over normal wear and tear versus damages.

Deposit Type	Legal Limit	Interest Required	Escrow Account
Standard Security Deposit	One month's rent (RPL 7-108)	Yes, annual payment by Jan 31	Interest-bearing NY bank
Rent-Stabilized	One month's rent	Yes	Required
Market Rate	One month's rent	Yes	Required

For best practices, use a move-in checklist covering walls, floors, appliances, and fixtures. Take dated photographs of every room. Collect the tenant's forwarding address in writing at move-out.

Legal Limits and Requirements

Under New York Real Property Law 7-108, security deposits cannot exceed one month's rent and must be held in an interest-bearing escrow account.

Landlords face clear rules to protect tenant rights. Here are the key requirements:

Maximum deposit equals one month's rent, no more.
Hold funds in a NY bank interest-bearing account.
Provide annual interest statement by January 31st.
Document move-in and move-out conditions with photos and checklist.
Collect tenant's forwarding address before finalizing return.

Experts recommend using the NY Attorney General's sample deposit receipt template for clarity. This includes details on the amount, account info, and interest terms. It helps avoid housing court battles over missing records.

For example, if a tenant leaves holes in walls or unpaid rent, landlords can deduct after providing an itemized list within 14 days. Tenants can dispute illegal deductions like normal wear and tear or cleaning fees in small claims court. Always send notices via certified mail for proof.

Permissible Deductions for Unpaid Rent

Landlords can deduct unpaid rent directly from security deposits, but must provide receipts and an itemized statement within 14 days per NYC Local Law 1 of 2004. This rule ensures tenants receive a clear accounting of any deductions. Failure to comply can lead to penalties in Housing Court.

Consider a tenant owing $2,200 in rent but paying only $1,800. The landlord can deduct the $400 balance plus a $50 late fee, totaling $450 from the security deposit. This example shows how unpaid rent and related fees become legal deductions when specified in the lease.

Key requirements include documenting fees in the lease agreement, prorating the final month's rent accurately, and capping NSF check bounce fees at $30 under New York regulation. Landlords must send the itemized list and receipts to the tenant's forwarding address via certified mail. These steps protect both parties under landlord-tenant law in NYC.

In a notable Housing Court case, a landlord successfully deducted unpaid rent after providing proper notice, while another faced penalties for missing the 14-day deadline. Tenants can dispute improper deductions in small claims court or Civil Court. Always keep records of payments to enforce your tenant rights.

Deductions for Property Damage

Landlords can deduct costs for tenant-caused damages beyond normal wear and tear, supported by before/after photos and contractor receipts. In NYC, security deposit deductions require clear proof of tenant responsibility under real estate state law. Tenants have rights to challenge these in housing court if documentation lacks.

Common examples include holes in walls from hanging pictures excessively or broken windows from negligence. Landlords must provide an itemized list within the 14-day notice period after move-out. This protects both parties under RPL 227-b.

Document the move-in condition with an inventory checklist and photographs at lease start. At move-out, compare to the initial state to justify repairs like lock changes or plumbing repairs. Experts recommend certified mail for forwarding address to ensure smooth security deposit return.

If disputes arise over fixture damages or appliance repairs, tenants can seek resolution in small claims court. Landlords cannot deduct for habitability violations like mold or pests they failed to address. Always keep receipts for carpet cleaning or painting to support claims.

What's Considered Normal Wear and Tear

Faded paint from 2 years normal occupancy is wear and tear; punched holes in drywall are tenant damage deductible at NY contractor rates. NYC housing court precedents distinguish these clearly in security deposit disputes. Use a move-in checklist template to note initial apartment conditions.

Normal wear and tear means deterioration from regular use, not negligence. Landlords cannot charge tenants for these under local law 1 of 2004 and the housing maintenance code. Tenants should photograph move-out conditions to protect against illegal deductions.

Damage Type	Wear & Tear (No Charge)	Tenant Damage (Deductible)	Avg Cost
Paint	Faded from sunlight	Holes or gouges	$200
Carpet	Light foot traffic stains	Pet urine or large spills	$500
Wall	Small nail holes	Large gouges or cracks	$100
Flooring	Minor scratches	Deep cuts or burns	$300
Doors	Slight sticking	Dents or broken hinges	$150

This table shows key differences for NYC security deposit deductions. For [rent stabilized](/blog/how-do-i-know-if-my-nyc-apartment-is-rent-stabilized) units, courts often rule in favor of tenants without proof. Landlords must provide written statements with receipts for any charges like pet damage.

Cleaning and Sanitation Charges

Landlords can charge reasonable cleaning fees ($150-400 for 1-bedroom) only for conditions beyond normal cleaning, backed by professional quotes. In NYC, security deposit deductions for cleaning must relate to excessive dirt or damage left by tenants. Routine end-of-lease cleaning counts as normal wear and tear and cannot be deducted.

Allowable charges include specific costs like carpet cleaning at typical NY rates, excessive trash removal, and deep cleaning labor. Landlords need before-and-after photographs to prove the need for these deductions. A sample cleaning invoice should list hours worked, rates, and total costs clearly.

For example, if a tenant leaves pet hair everywhere or grease buildup in the kitchen, landlords can deduct accordingly. Tenants should document move-in condition with photos to dispute unfair claims. Under RPL 227-b, landlords must provide an itemized list within 14 days.

To avoid disputes, both parties use an inventory checklist at move-in and move-out. If deductions seem excessive, tenants can challenge them in small claims court. Always request receipts for any professional cleaning services used.

Specific Allowable Cleaning Charges

Landlords in NYC may deduct for carpet cleaning at around $1.50 per square foot for heavy soiling beyond normal use. Excessive trash removal costs $100-200 if tenants leave large piles that require professional hauling. Deep cleaning at $25 per hour covers labor for areas like ovens or bathrooms caked with grime.

Carpet cleaning for stains from spills or pets, not general vacuuming.
Trash removal for bulk items dumped in the apartment or balcony.
Deep cleaning for biohazards like mold from tenant neglect, excluding habitability issues.

These rates reflect common New York City practices, but landlords must get multiple quotes. Tenants protect themselves by cleaning thoroughly before vacating. Deductions require proof of move-out condition worse than move-in.

Prohibited Cleaning Deductions

Routine end-of-lease cleaning is never deductible from the security deposit in NYC. This includes standard sweeping, dusting, or light scrubbing expected at turnover. Landlords cannot charge for restoring the apartment to normal wear and tear levels.

For instance, minor scuffs on floors or dust in corners do not justify fees. Charging for these violates tenant rights under local laws like the Multiple Dwelling Law. Tenants can report illegal deductions to the Attorney General.

Landlords often try to deduct for freshening up between tenants, but this is prohibited. Keep records of your cleaning efforts with dated photos. Disputes go to housing court if unresolved.

Documentation Requirements

Every cleaning deduction needs before-and-after photos showing the damage. Landlords must send an itemized statement with receipts via certified mail within 14 days. Include a sample invoice detailing services, like "3 hours deep clean at $25/hr = $75".

Tenants should provide a forwarding address in writing to ensure receipt of the deposit accounting. Without proper documentation, deductions are invalid in civil court. Experts recommend both parties sign off on condition checklists.

If bed bugs or pests caused the mess, check for habitability violations first. Landlords cannot deduct tenant cleaning if they failed maintenance duties. Always dispute with evidence to recover your security deposit.

Repairs for Tenant-Caused Issues

Broken fridge handles ($150 repair), clogged toilets from wipes ($250 plumber), and cracked mirrors ($200 replacement) are all deductible with receipts. In NYC, landlords can deduct costs for repairs for tenant-caused issues from the security deposit. These must exceed normal wear and tear.

Tenants cause damage through misuse, like dropping heavy items or improper flushing. Landlords need proof, such as photographs from move-in and move-out conditions. This helps distinguish tenant responsibility from everyday use.

Contractor invoices provide the strongest evidence for legal deductions. Landlord labor rates should not exceed $75/hr as reasonable in NYC. Courts review these closely in housing disputes.

Always provide an itemized list within the 14-day notice period under RPL 227-b. Tenants can dispute in small claims court if deductions seem unfair. Proper documentation protects both sides.

Repair Type	Average NYC Cost	Documentation Required
Appliances	$100-500	Contractor invoice, before/after photos
Plumbing	$200-800	Plumber receipt, video of clog cause
Electrical	$300+	Licensed electrician bill, inspection report
Fixtures	$50-300	Receipts for parts/labor, damage photos

Deductions for Unreturned Keys

NYC landlords charge $50-150 per unreturned key set, including rekeying fees, which Housing Court consistently upholds as reasonable. Tenants must return all keys at move-out to avoid these security deposit deductions. Failure to do so leaves landlords with no choice but to secure the apartment.

Costs break down into specific items like apartment keys at $5 each, often two per door for $10 total. Rekeying charges $75-125 to change locks for security. Fobs or super keys add $25-50 more, depending on the building type.

Landlords should include a clear lease clause on keys, such as: "Tenant agrees to return all keys, fobs, and access devices upon vacating. Landlord may deduct costs for replacement and rekeying from the security deposit." This sets expectations and supports deductions in disputes.

In one Housing Court case, a judge upheld a $100 deduction for unreturned keys, citing the lease terms and rekeying receipts. Tenants can dispute by providing proof of return, like photos or emails. Always document key handoff with a move-out checklist to protect both sides.

Common Key Types and Costs

Apartment door keys typically cost $5 each, with duplicates needed for entry. Buildings often require rekeying the entire lockset at $75-125 to prevent unauthorized access. This protects future tenants from risks.

Fobs for elevators or lobbies range from $25-50 to replace due to programming fees. Super keys for maintenance access carry similar costs. Landlords must itemize these in the 14-day deduction notice.

Tenants in rent-stabilized apartments have the same rules under NYC housing law. Keep receipts for all lock changes to justify charges. Disputes often hinge on proof of what was provided at move-in.

How to Avoid Key Deductions

Request a written inventory checklist at move-in listing all keys and fobs. Take photographs of keys handed over. Return everything in person and get a signed receipt from the landlord or super.

Provide a forwarding address in writing via certified mail for the security deposit return. If keys are lost mid-tenancy, report immediately and pay replacement upfront. This shows good faith in landlord-tenant law NYC.

For sublets or roommate disputes, confirm key return with all parties. Housing Court favors documented evidence over claims. Tenants retain rights to challenge excessive NYC security deposit deductions.

Utility and Service Fees

Unpaid ConEd bills ($200+) and parking violations ($75/month outstanding) can be deducted if specified in the lease agreement. In NYC, landlords may withhold from the security deposit for certain utility and service fees tied directly to the tenant's responsibility. These deductions must meet strict legal requirements under landlord tenant law NYC.

Allowable fees include utilities listed in the tenant's name but left unpaid, fees for an assigned parking spot, and charges for a storage unit. The lease must explicitly outline these obligations, and bills need to be in the tenant's name. Without this documentation, deductions could be seen as illegal deductions.

For example, if a tenant owes a ConEd electricity bill of $250, the landlord can deduct that amount after providing an itemized list. Landlords must send a 14-day notice with the accounting of deductions and proof like receipts. Tenants can dispute in small claims court if the lease does not support the claim.

Here's a sample calculation for a ConEd bill deduction:

Item	Amount
Outstanding ConEd Bill (in tenant's name)	$250
Lease Clause Reference	Section 5: Tenant pays utilities
Deducted from Security Deposit	$250

Always keep records like move-in condition photos and the inventory checklist to protect against disputes over security deposit NYC rules. Tenants should provide a forwarding address via certified mail to ensure proper handling.

Landlord's Timeline for Deductions

Landlords have exactly 14 days after move-out to return security deposits or send itemized deductions via certified mail per Local Law 1 of 2004. NYC courts enforce this strict timeline under real estate state law. Tenants can pursue claims in small claims court if landlords miss the deadline.

Upon lease end, landlords must inspect the apartment for damages beyond normal wear and tear. This includes comparing move-in condition photos and inventory checklists to the move-out condition. Failure to act within 14 days means the full deposit must return intact.

Common delays arise from disputes over unpaid rent, cleaning fees, or repairs like broken windows and holes in walls. Tenants should provide a forwarding address to ensure receipt of the deduction notice. NYC housing court often sides with tenants on timeline violations.

Landlords hold deposits in an escrow account and pay deposit interest annually. Missing the 14-day notice triggers tenant protections against illegal deductions. Experts recommend tenants document everything to enforce this rule.

Required Itemized Statement

The statement must list each deduction amount, purpose, and include copies of receipts or contractor estimates. Landlords send this via certified mail with proof of delivery to the tenant's forwarding address. RPL 227-b mandates this for all NYC apartments, including rent stabilized and market rate units.

Receipts prove actual costs, not estimates over $250, for items like carpet cleaning, painting, or pet damage repairs. The statement details legal deductions such as unpaid rent, excessive trash removal, or missing keys. Tenants review for normal wear and tear exclusions.

Here is a sample itemized statement template:

Date	Description	Amount	Receipt Attached
10/15/2023	Holes in walls - patching and painting	$250	Yes
10/16/2023	Missing keys - lock change	$150	Yes
10/17/2023	Pet damage to flooring	$300	Yes

NY Attorney General provides a model form for compliance. Tenants disputing deductions can reference the NYC rent guidelines and housing maintenance code in civil court. This protects against illegal claims like utilities or attorney fees without proof.

Prohibited or Limited Deductions

Landlords cannot deduct for pre-existing conditions, normal wear and tear, or habitability issues like bed bugs or mold (Warranty of Habitability). These protections stem from New York real estate state law, including RPL 227-b. Tenants should document the move-in condition with photographs and an inventory checklist to dispute invalid claims.

Housing Court penalties apply for illegal deductions, often resulting in fines over $500. Judges enforce tenant rights strictly in NYC, especially for rent-stabilized or rent-controlled apartments. Landlords must provide a 14-day notice with an itemized list of deductions, or face penalties.

Certain deductions face strict limits under the Multiple Dwelling Law and Housing Maintenance Code. For example, routine upkeep like carpet cleaning cannot exceed reasonable costs tied to actual damages. Tenants can challenge deductions in small claims court if the landlord skips the written statement or accounting.

Practical steps include keeping receipts for any tenant-paid repairs and sending a forwarding address via certified mail. This ensures compliance with security deposit NYC rules and protects against retaliation or harassment. Experts recommend reviewing the lease for any clauses on non-refundable fees like pet fees upfront.

1. Normal Wear and Tear (RPL 227-b)

Normal wear and tear covers everyday use that ages an apartment naturally, such as faded paint or minor scuffs on floors. Under RPL 227-b, landlords in NYC cannot deduct from the security deposit for these items. Tenants prove this with move-in photos showing prior conditions.

For instance, lightly worn carpets from regular foot traffic qualify as normal, not deductible damages. Landlords must distinguish this from pet damage or excessive trash left behind. Documenting the move-out condition helps avoid disputes over cleaning fees.

If deducted improperly, tenants can demand a refund with evidence. Housing Court often sides with tenants, imposing fines on landlords for violations. This upholds landlord-tenant law in NYC and deposit interest rules.

2. Habitability Violations

Landlords bear responsibility for habitability violations like pests, mold, or plumbing issues under the Warranty of Habitability. Deductions from the security deposit for these repairs are prohibited in NYC. Tenants should report issues promptly to the 311 hotline or Housing Preservation Department.

Examples include bed bugs, leaks causing mold, or broken HVAC systems. Landlords cannot charge tenants for electrical repairs or fixture damages stemming from neglect. This prevents constructive eviction claims.

Violations lead to Housing Court penalties, with fines exceeding $500 per instance. Tenants retain rights to withhold rent for unresolved issues after proper notice. Keep records of complaints to strengthen cases in civil court.

3. Routine Repainting

Routine repainting every few years falls under normal maintenance, not allowable security deposit deductions. NYC law views this as landlord duty, especially in older buildings under Local Law 1 of 2004. Faded walls from sunlight or minor marks do not justify charges.

Tenants avoid fees by leaving walls clean, without holes in walls or heavy marks. Landlords must prove excessive damage beyond wear. Use the inventory checklist at move-out to agree on conditions.

Illegal deductions for painting trigger disputes in small claims court. Courts prioritize tenant protections and may order full refunds plus costs. This applies to market rate and stabilized units alike.

4. Market Rent Increases

Landlords cannot deduct market rent increases or unpaid rent hikes from the security deposit. Rent adjustments follow NYC Rent Guidelines for stabilized units, not deposit funds. Vacancy raises are the landlord's opportunity, not a tenant charge.

For example, a jump from stabilized rent to market rate occurs at lease end, without deposit impact. Tenants challenge mislabeled deductions as unpaid rent. Provide lease copies showing agreed terms.

Housing Court rejects such claims, fining landlords over $500. This safeguards against illegal practices in rent-controlled apartments. Tenants should confirm maximum deposit equals one month's rent.

5. Attorney Fees (Unless Lease Allows)

Attorney fees or legal costs require explicit lease permission for deduction from the security deposit. Without it, NYC law prohibits charging tenants for eviction defenses or disputes. Review lease clauses carefully at signing.

Common scenarios include fees from lease violations like subletting, but only if specified. Otherwise, landlords absorb court costs. Tenants counter with evidence of fair housing compliance.

Disputing in civil court often results in penalties for landlords. Experts advise against leases shifting these burdens unfairly. This upholds balanced landlord responsibilities.

6. Broker Fees

Broker fees are non-refundable application costs, never deductible from the security deposit. NYC tenant laws separate these from deposits held in escrow. Landlords cannot retroactively claim them at move-out.

Examples include holding fees or NSF charges, which stay distinct. Tenants spot red flags in itemized lists mixing these. Demand separate accounting per real estate state law.

Housing Court imposes fines over $500 for such errors. Tenants protect rights by verifying escrow account compliance. Avoid non-standard fees like excessive late fees.

Tenant Rights and Dispute Process

Tenants can dispute illegal deductions in NYC Small Claims Court up to $10,000 or Housing Court, often winning cases with proper documentation. These courts protect tenant rights under NYC landlord-tenant law. Landlords must follow strict rules for security deposit returns.

Start by sending a certified demand letter within 30 days of receiving the landlord's deduction notice. This formal step demands the return of disputed amounts for issues like normal wear and tear or missing itemized list. Keep records of all communications.

If unresolved, escalate to Small Claims Court with a $15 filing fee or Housing Court for rent-stabilized apartments. The NY Attorney General offers free mediation services. Success depends on evidence like move-in condition photos and receipts.

Gather proof such as inventory checklists, witness statements, and repair estimates. Courts prioritize tenants with clear documentation over vague landlord claims. This process enforces RPL 227-b and local laws on security deposit returns.

Step-by-Step Dispute Process

Follow these steps to challenge security deposit deductions effectively in NYC. Act quickly to meet deadlines and preserve your rights. Proper order increases your chances of recovery.

Send certified demand letter within 30 days: Detail disputed items like carpet cleaning or unpaid rent. Use certified mail with return receipt for proof.
File in Small Claims Court: Pay $15 fee at Civil Court locations. Suitable for claims up to $10,000, no lawyer needed.
Use Housing Court for rent-stabilized units: Address habitability issues tied to deductions. File at designated NYC borough courts.
Request NY AG mediation: Free service through the Attorney General's office for landlord-tenant disputes. Often resolves issues without court.

Each step builds your case with photographs of move-out condition and receipts. Courts favor tenants who document everything. Consult tenant advocacy groups for free guidance.

Sample Demand Letter

A demand letter is your first formal action after the landlord's 14-day notice. Send it via certified mail to the landlord's address with your forwarding address. Keep it concise and factual.

Sample structure:

State your name, apartment address, and move-out date.
Reference the deduction notice and disputed amounts, such as $300 for painting despite normal wear.
Demand full or partial refund within 10 days, citing NYC real estate state law.
Include evidence summary like move-in photos showing prior damage.
Threaten Small Claims Court if unpaid.

Customize for specifics like pet damage disputes or missing keys fees. This letter creates a paper trail for court. Experts recommend attaching copies of all proof.

Court Filing Addresses and Tips

Small Claims Court filings occur at Civil Court buildings across NYC boroughs. Bring ID, lease, and evidence. Fees are low at $15 for most claims.

Borough	Address
Manhattan	60 Lafayette Street, New York, NY 10013
Brooklyn	141 Livingston Street, Brooklyn, NY 11201
Queens	88-11 Sutphin Boulevard, Jamaica, NY 11435
Bronx	851 Grand Concourse, Bronx, NY 10451
Staten Island	915 Castleton Avenue, Staten Island, NY 10301

For Housing Court, use the same locations but specify housing part. Rent-stabilized tenants get priority. Arrive early and request interpreters if needed.

Prepare by organizing damages photos versus normal wear and tear examples. Judges review lease violations claims carefully. Mediation through NY AG can avoid full hearings.

Frequently Asked Questions

What Can a Landlord Legally Deduct from a Security Deposit in NYC?

In New York City, landlords can legally deduct from a security deposit for unpaid rent, damages beyond normal wear and tear, cleaning costs to restore the unit to its original condition, and any other specific breaches of the lease agreement outlined in NYC Housing Maintenance Code and Rent Stabilization laws. Normal wear and tear, like faded paint from regular use, cannot be deducted.

Can a Landlord in NYC Deduct for Unpaid Rent from the Security Deposit?

Yes, under NYC law, a landlord can legally deduct any unpaid rent or additional rent (like utilities if specified in the lease) from the security deposit. This must be itemized in a written statement sent to the tenant within 14 days after move-out.

What Counts as 'Normal Wear and Tear' That Can't Be Deducted from a Security Deposit in NYC?

In NYC, normal wear and tear includes minor issues like small nail holes from pictures, faded carpets from foot traffic, or slightly worn fixtures from everyday use. Landlords cannot legally deduct these from the security deposit; deductions are only for excessive damage, such as large holes in walls or stained carpets from spills.

Can NYC Landlords Deduct Cleaning Fees from the Security Deposit?

Yes, landlords in NYC can legally deduct reasonable cleaning costs from the security deposit if the unit is left dirtier than when the tenant moved in, provided it's not just normal cleaning. This must be supported by receipts and detailed in the itemized statement required within 14 days of vacancy.

What About Repairs: What Can a Landlord Legally Deduct from a Security Deposit in NYC for Damage?

Landlords can deduct costs for repairs to damages caused by the tenant or their guests beyond normal wear and tear, such as broken windows, damaged appliances, or pet scratches on floors. In NYC, they must provide an itemized list with estimates or receipts to justify deductions from the security deposit.

How Soon Must an NYC Landlord Return or Deduct from the Security Deposit?

NYC law requires landlords to return the security deposit (or the remaining balance after legal deductions) with an itemized statement within 14 days after the tenant vacates. Failure to do so allows tenants to sue for twice the deposit amount plus attorney's fees if deductions were unlawful.