New York Security Deposit Interest
New York requires deposit interest under certain conditions. The rate is set by the deposit bank. Condition: Whenever the money so deposited or advanced is for the rental of property containing six or more family dwelling units
Interest rules
| Interest required | Conditional |
|---|---|
| Condition | Whenever the money so deposited or advanced is for the rental of property containing six or more family dwelling units |
| Rate rule | Must be deposited in an interest-bearing account in a New York banking organization earning interest at a rate which shall be the prevailing rate earned by other such deposits made with banking organizations in such area. Landlord may retain as administration expenses a sum equivalent to one per cent per annum upon the security money; the balance of the bank interest belongs to the tenant. If a smaller building's landlord voluntarily uses an interest-bearing account, the same 1% admin-fee rule applies. |
| Current rate | Set by the bank where the deposit is held |
| How interest builds up | Not specified as simple vs compound. If the lease terminates other than when the bank regularly pays interest, the landlord shall pay over such interest as he is able to collect at the date of lease termination. |
| When it must be paid | The balance of the interest shall either be held in trust until repaid or applied for the use or rental of the leased premises, or annually paid to the person making the deposit of security money. |
| When interest may be lost | No separate forfeiture rule is supplied here; check the statute before assuming interest is lost. |
| What you can recover | A separate remedy for unpaid interest is not supplied here; see the cited statute. |
| Statute | N.Y. Gen. Oblig. Law § 7-103(2), (2-a), (2-b) |
Statute says
Landlords of buildings with six or more apartments must put all security deposits in a New York bank account earning interest at the prevailing rate. ... Landlords are entitled to collect annual administrative expenses o
What this means
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Condition: Whenever the money so deposited or advanced is for the rental of property containing six or more family dwelling units
The result assumes this condition is met.
Must be deposited in an interest-bearing account in a New York banking organization earning interest at a rate which shall be the prevailing rate earned by other such deposits made with banking organizations in such area. Landlord may retain as administration expenses a sum equivalent to one per cent per annum upon the security money; the balance of the bank interest belongs to the tenant. If a smaller building's landlord voluntarily uses an interest-bearing account, the same 1% admin-fee rule applies.
Accrual: Not specified as simple vs compound. If the lease terminates other than when the bank regularly pays interest, the landlord shall pay over such interest as he is able to collect at the date of lease termination.
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Free New York template, built from verified state data
I rented [rental property address] from [lease start date] to [move-out date]. I paid a security deposit of $[amount]. I returned the keys on [date] and gave you my forwarding address in writing on [date]. Under New York law (N.Y. Gen. Oblig. Law §7-108), a landlord must return the deposit or send a written, itemized list of deductions within 14 days after tenant vacates the premises (move-out).
FAQ
Does my landlord owe deposit interest in New York?
Only when the legal condition is met. Whenever the money so deposited or advanced is for the rental of property containing six or more family dwelling units
Which interest rate should I use?
Set by the bank where the deposit is held; there is no statewide numeric rate.
When must the landlord pay the interest?
The balance of the interest shall either be held in trust until repaid or applied for the use or rental of the leased premises, or annually paid to the person making the deposit of security money.