How much can a landlord deduct from a security deposit in New York?

A plain-English guide for small landlords · Last reviewed Nov 3, 2026 against N.Y. Gen. Oblig. Law § 7-108, § 7-103, § 7-105 and § 7-107 (NY Senate Open Legislation)

Short answer: a covered New York deposit generally cannot exceed one month's rent, and you may keep only reasonable, itemized amounts for unpaid rent, tenant-caused damage beyond normal wear and tear, unpaid utilities payable directly to you under the lease, and moving/storage of the tenant's belongings—not ordinary wear and tear, and not a prior tenant's damage.

The remaining deposit and an itemized statement of anything you kept are due within 14 days after the tenant vacated. Miss that deadline and you forfeit any right to retain any portion of the deposit.

Not legal advice. This page is general information drawn from the New York General Obligations Law and official New York Attorney General sources, linked throughout. Laws change, rent-regulation status matters, your lease terms matter, and so do the facts of each case. Check the statute or talk to a New York attorney before you withhold money.

Do the math in 2 minutes: the free Kitwright Security Deposit Deduction Calculator prorates replaced items for wear and tear, totals your deductions, estimates the 14-day return date for New York, and prints an itemized statement. No sign-up, and nothing you type leaves your browser.

Open the free calculator

Who this guide covers

§ 7-108 applies to dwelling units in residential premises that are not the rent-stabilized units carved out to § 7-107. Most of the deduction, inspection and 14-day rules below sit in § 7-108(1-a). That subdivision excepts units under the city rent and rehabilitation law or the emergency housing rent control law, plus certain continuing-care, assisted-living, adult-care and senior/independent-retirement arrangements. Rent-stabilized units are governed by § 7-107; the Open Legislation text of § 7-107 (revision dated Nov 21, 2025) now carries parallel one-month, deduction, inspection, 14-day and willful-penalty rules. Rent-controlled units sit outside § 7-108(1-a)—treat them carefully and confirm current DHCR / local practice. Trust-accounting and interest rules in § 7-103 apply across the board.

The one-month deposit cap

For units covered by § 7-108(1-a), "no deposit or advance shall exceed the amount of one month's rent," with limited exceptions for qualifying seasonal-use dwelling units and certain owner-occupied cooperative apartments (§ 7-108(1-a)(a), (4)–(6)). The New York Attorney General states the practical point plainly: a landlord generally cannot collect both last month's rent and a security deposit. If rent goes up on renewal, the AG notes the landlord may collect more to bring the deposit up to the new monthly rent.

What a New York landlord can deduct

Under § 7-108(1-a)(b), the entire deposit is refundable when the tenant vacates "except for an amount lawfully retained for the reasonable and itemized costs" due to:

Non-payment of rent
Damage caused by the tenant beyond normal wear and tear
Non-payment of utility charges payable directly to the landlord under the lease or tenancy
Moving and storage of the tenant's belongings

If the tenant disputes what you kept, "the landlord shall bear the burden of proof as to the reasonableness of the amount retained" (§ 7-108(1-a)(f)). Keep invoices, receipts and dated photos.

What a landlord can't deduct: ordinary wear and tear (and prior-tenant damage)

"The landlord may not retain any amount of the deposit for costs relating to ordinary wear and tear of occupancy or damage caused by a prior tenant" (§ 7-108(1-a)(b)). New York's statute does not publish a wear-and-tear checklist. A practical test: did this come from ordinary occupancy, or from the current tenant's damage beyond that? Document the answer with a move-in condition record.

Wear and tear (not deductible)	Damage (may be deductible)
Carpet worn thin in a hallway from years of normal foot traffic	Carpet stained or destroyed by a pet the current tenant kept
Paint faded from sunlight and light scuffs from furniture	Large holes, unauthorized paint colors left unrestored, or crayon/marker damage
A defect already noted on the move-in inspection agreement	A new broken window or missing appliance part caused during this tenancy

Illustrative only—New York's statute does not list these examples. The move-in inspection agreement in § 7-108(1-a)(c) is especially useful: you may not retain any deposit for a condition, defect or damage noted in that agreement.

Trust account, bank notice and interest (§ 7-103)

Tenant's money in trust: a security deposit "shall continue to be the money of the person making such deposit" and "shall be held in trust" and "shall not be mingled with the personal moneys" of the landlord (§ 7-103(1)).
Bank notice: if you place the money in a banking organization, you must notify each depositor in writing of the bank's name and address and the amount deposited. The bank must have a place of business in New York (§ 7-103(2)).
Six or more units: for property containing six or more family dwelling units, you must deposit the money in an interest-bearing New York bank account earning the prevailing rate for such deposits in the area (§ 7-103(2-a)).
1% admin fee: if the account bears interest, you may take "a sum equivalent to one per cent per annum" as administration expenses; the balance of the interest belongs to the tenant (§ 7-103(2)). The AG's Residential Tenants' Rights Guide walks through a simple dollar example.
Waiver void: a lease clause waiving § 7-103 is "absolutely void" (§ 7-103(3)).

Move-in and pre-move-out inspections

Move-in offer: after the initial lease is signed but before occupancy begins, offer the tenant a chance to inspect with you or your agent. If the tenant requests it, execute a written agreement noting existing defects or damages before occupancy. You may not later keep deposit money for anything noted in that agreement (§ 7-108(1-a)(c)).
Pre-vacate notice: within a reasonable time after either party gives notice of intent to terminate—unless the tenant terminates with less than two weeks' notice—notify the tenant in writing of the right to request an inspection and to be present (§ 7-108(1-a)(d)).
Timing: if requested, hold the inspection no earlier than two weeks and no later than one week before the end of the tenancy, with at least 48 hours' written notice of the date and time.
Cure chance: after the inspection, give an itemized statement of repairs or cleaning you propose to deduct; the tenant then has the opportunity to cure before the tenancy ends. That statement is admissible only in deposit-return proceedings.

The 14-day deadline

Deadline: "Within fourteen days after the tenant has vacated the premises, the landlord shall provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and shall return any remaining portion of the deposit to the tenant" (§ 7-108(1-a)(e)). Example: tenant vacates on October 31 → statement and any refund are due by November 14.
Forfeiture: miss the 14-day window and "the landlord shall forfeit any right to retain any portion of the deposit"—even if there was real damage or unpaid rent.
No forwarding-address delay in the statute: unlike some states, § 7-108(1-a)(e) does not pause the clock until the tenant sends a forwarding address. Get a forwarding address in writing when you can, but count 14 days from vacate.

Worked example: a New York move-out

Hypothetical example (made-up numbers for illustration). A tenant in a non-stabilized duplex paid a $2,000 deposit (equal to one month's rent), vacates on October 31, 2026, and owes no rent. You held a timely pre-move-out inspection; the tenant did not cure two items.

Item	How it's figured	Deduction
Bedroom carpet ruined by pet urine (4 years old, expected to last 8, $1,000 to replace with similar quality)	Charge only the life it had left: $1,000 × (8 − 4) ÷ 8	$500.00
Patching and repainting a wall with many large anchor holes ($200 painter's invoice)	Invoice amount	$200.00
Unpaid water/sewer billed to the landlord under the lease ($75 final bill)	Utility charge payable to landlord, § 7-108(1-a)(b)	$75.00
Paint faded and lightly scuffed in the living room	Ordinary wear and tear — not deductible	$0.00
Total deductions		$775.00
Refund due to tenant ($2,000 − $775), plus any tenant interest due under § 7-103		$1,225.00+

The $1,225 (plus any interest the tenant is owed) and a written itemized statement of the three deductions are due by November 14, 2026, the 14th day after vacate. New York's statute does not prescribe a carpet-proration formula. Charging only remaining useful life is one way to keep the charge "reasonable" under § 7-108(1-a)(f). Keep the invoice, bill and photos.

Run your own numbers: the free calculator applies the same proration approach and works out the return-by date for New York and 50 other jurisdictions (49 states + DC).

Penalties for getting it wrong

Miss the 14-day statement and refund: you forfeit any right to retain any portion of the deposit (§ 7-108(1-a)(e)).
Actual damages: a person who violates § 7-108(1-a) is liable for actual damages (§ 7-108(1-a)(g)).
Willful violation: a person found to have willfully violated the subdivision is also liable for punitive damages of up to twice the amount of the deposit or advance. On a $2,000 deposit, that is up to an extra $4,000 on top of actual damages.
Can't be waived: any agreement by the tenant waiving or modifying rights under § 7-108 is "absolutely void" (§ 7-108(3)).
Where disputes go: small claims limits depend on the court—up to $10,000 in New York City, up to $5,000 in City Courts and Nassau/Suffolk District Court small claims, and up to $3,000 in Town and Village Justice Courts (NYCourts.gov CourtHelp; NYC Small Claims). The AG also runs a rent-security recovery / complaint process; disputes over claimed rent or damage often still end up in court.

When the building is sold

On conveyance (or certain foreclosure/receivership events), the seller generally must turn the security deposit over to the successor within five days of the deed/assignment (or within five days after a receiver qualifies) and notify the tenant by registered or certified mail of the turnover and the successor's name and address (§ 7-105(1)). A transferor who turns the deposit over as required is relieved of further repayment liability; the transferee becomes responsible (§ 7-105(2)). Failure to comply with § 7-105 is a misdemeanor (§ 7-105(3)). § 7-108(2) adds successor-liability rules when a deposit was not properly turned over, including "actual knowledge" presumptions and a 30-day notice process when there is no record of a deposit.

Quick checklist before you send the refund

Confirm the vacate date and start the 14-day clock immediately.
Confirm the deposit never exceeded one month's rent (unless a statutory exception applies).
Offer/complete the pre-vacate inspection on the statutory timeline when notice was given with enough lead time.
Cut anything that is ordinary wear and tear, prior-tenant damage, or already listed on the move-in agreement.
Tie each deduction to one of the four statutory categories and to an invoice, bill or photo.
Send the balance with a written itemized statement—and any tenant interest due under § 7-103—within 14 days.

For your year-end records, the free Year-End Landlord Ops Checklist (Excel) includes a deposits section.

Guides for other states

California: how much can a landlord deduct from a security deposit? (21-day itemized statement, receipts and photos, 2026 changes)
Florida: how much can a landlord deduct from a security deposit? (15-day full return or 30-day claim notice, tenant 15-day objection, itemized claim)
Texas: how much can a landlord deduct from a security deposit? (30-day refund, forwarding address, itemized list, bad-faith penalties)

For every other state's return deadline and statute, see the 51-jurisdiction table in the free deposit calculator.

FAQ

How much can a landlord deduct from a security deposit in New York?

There is no fixed dollar cap on deductions beyond the deposit itself, which generally cannot exceed one month's rent. A New York landlord may retain only reasonable, itemized amounts for unpaid rent, tenant-caused damage beyond normal wear and tear, unpaid utilities payable directly to the landlord under the lease, and moving and storage of the tenant's belongings. Ordinary wear and tear and damage caused by a prior tenant are not deductible (N.Y. Gen. Oblig. Law § 7-108(1-a)(a)–(b)).

How long does a New York landlord have to return a security deposit?

Within fourteen days after the tenant has vacated the premises, the landlord must provide an itemized statement of any amount retained and return the remaining deposit. Missing that deadline forfeits any right to retain any portion of the deposit (N.Y. Gen. Oblig. Law § 7-108(1-a)(e); parallel rule for rent-stabilized units in § 7-107(6)).

Is there a limit on how large a New York security deposit can be?

Yes. For covered dwelling units, no deposit or advance may exceed one month's rent, with limited exceptions for qualifying seasonal-use units and certain owner-occupied cooperative apartments (N.Y. Gen. Oblig. Law § 7-108(1-a)(a), (4)–(6)). The New York Attorney General notes that means a landlord generally cannot collect both last month's rent and a security deposit.

What counts as normal wear and tear in New York?

The statute does not define "normal wear and tear" or "ordinary wear and tear" with a list of examples. It simply bars retaining any amount for costs relating to ordinary wear and tear of occupancy, or for damage caused by a prior tenant (N.Y. Gen. Oblig. Law § 7-108(1-a)(b)). Document move-in condition and charge only for deterioration beyond ordinary use.

What happens if a New York landlord misses the 14-day deadline?

If the landlord fails to provide the itemized statement and return any remaining deposit within fourteen days after the tenant vacated, the landlord forfeits any right to retain any portion of the deposit (N.Y. Gen. Oblig. Law § 7-108(1-a)(e)). A willful violation can also trigger punitive damages of up to twice the deposit, on top of actual damages (§ 7-108(1-a)(g)).

Do New York landlords have to pay interest on security deposits?

Deposits are the tenant's money held in trust and may not be mingled with the landlord's personal funds (N.Y. Gen. Oblig. Law § 7-103(1)). For a building with six or more family dwelling units, the deposit must go in an interest-bearing New York bank account at the prevailing rate; the landlord may keep 1% per year as an administration fee and the rest of the interest belongs to the tenant (§ 7-103(2), (2-a)). The landlord must notify the tenant in writing of the bank's name and address and the amount deposited.

Does New York require a pre-move-out inspection?

Yes, with a narrow timing exception. Within a reasonable time after either party gives notice of intent to terminate—unless the tenant terminates with less than two weeks' notice—the landlord must notify the tenant in writing of the right to request an inspection and to be present. If requested, the inspection must fall no earlier than two weeks and no later than one week before the end of the tenancy, with at least 48 hours' written notice of the date and time. Afterward the landlord must give an itemized list of proposed deduction items, and the tenant may cure before the tenancy ends (N.Y. Gen. Oblig. Law § 7-108(1-a)(d)).

What is the penalty for wrongfully keeping a New York security deposit?

A person who violates § 7-108(1-a) is liable for actual damages. Someone found to have willfully violated that subdivision is also liable for punitive damages of up to twice the amount of the deposit or advance (N.Y. Gen. Oblig. Law § 7-108(1-a)(g)). Separately, missing the 14-day statement-and-refund deadline forfeits any right to keep any of the deposit (§ 7-108(1-a)(e)).

Where do New York deposit disputes go?

Many deposit disputes are filed in small claims court. Limits vary by court: up to $10,000 in New York City Civil Court Small Claims; up to $5,000 in City Courts and in Nassau and Suffolk District Court small claims; and up to $3,000 in Town and Village Justice Courts (NYCourts.gov CourtHelp). The Attorney General also offers a rent-security complaint process for some issues, but disputes over alleged unpaid rent or damage often go to court.

Is this legal advice?

No. This page is general information based on the New York General Obligations Law text on the NY Senate Open Legislation site and official New York Attorney General materials as of November 2026. The lease, rent-regulation status and the facts of each case matter. Read the statute or talk to a New York attorney before you withhold money.

Sources

N.Y. General Obligations Law § 7-108 (deposits made by tenants of non-rent stabilized dwelling units). NY Senate Open Legislation: nysenate.gov/legislation/laws/GOB/7-108
N.Y. General Obligations Law § 7-103 (money deposited as security; trust; interest; six-or-more-unit rule; waiver void): nysenate.gov/legislation/laws/GOB/7-103
N.Y. General Obligations Law § 7-105 (turnover on conveyance; registered/certified mail notice; misdemeanor): nysenate.gov/legislation/laws/GOB/7-105
N.Y. General Obligations Law § 7-107 (rent-stabilized dwelling units; parallel deposit rules in current Open Legislation text): nysenate.gov/legislation/laws/GOB/7-107
New York Attorney General, Tenants resource page and Residential Tenants' Rights Guide; Recovering Rent Security Deposits and Interest
NYCourts.gov, Small Claims overview and New York City Small Claims Court

Not legal advice. Kitwright isn't a law firm. This guide summarizes the New York General Obligations Law and official New York sources as of Nov 3, 2026. Your lease, rent-regulation status, local rules and the facts of the case can change the answer. Confirm with the statute or an attorney.