S T A T E O F N E W Y O R K
________________________________________________________________________
3838
2009-2010 Regular Sessions
I N A S S E M B L Y
January 28, 2009
___________
Introduced by M. of A. LENTOL, WEINSTEIN, GREENE -- Multi-Sponsored by
-- M. of A. BRENNAN, CLARK, COOK, DINOWITZ, ENGLEBRIGHT, GALEF, GLICK,
GOTTFRIED, HOOPER, JACOBS, JOHN, PRETLOW, P. RIVERA, SEMINERIO -- read
once and referred to the Committee on Judiciary
AN ACT to amend the general obligations law, in relation to the return
of tenants' security deposits
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 2 and 2-a of section 7-103 of the general
obligations law, as amended by chapter 402 of the laws of 1979, are
amended to read as follows:
2. Whenever the person receiving money so deposited or advanced shall
deposit such money in a banking organization, such person shall thereup-
on notify in writing each of the persons making such security deposit or
advance, giving the name and address of the banking organization in
which the deposit of security money is made, and the amount of such
deposit. Deposits in a banking organization pursuant to the provisions
of this subdivision shall be made in a banking organization having a
place of business within the state. If the person depositing such secu-
rity money in a banking organization shall deposit same in an interest
bearing account, he shall be entitled to receive, as administration
expenses, a sum equivalent to one [per cent] PERCENT per annum upon the
security money so deposited, which shall be in lieu of all other admin-
istrative and custodial expenses. The balance of the interest paid by
the banking organization shall be the money of the person making the
deposit or advance and shall, AT THE OPTION OF THE TENANT, either (A) be
held in trust by the person with whom such deposit or advance shall be
made, until repaid [or] PURSUANT TO THE PROVISIONS OF SUBDIVISION TWO-C
OF THIS SECTION, OR, (B) BE AT LEAST ANNUALLY applied for the use or
rental of the leased premises, or, (C) BE annually paid to the person
making the deposit of security money.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05929-01-9
A. 3838 2
2-a. Whenever the money so deposited or advanced is for the rental of
property containing [six] THREE or more family dwelling units, the
person receiving such money shall, subject to the provisions of this
section, deposit it in an interest bearing account in a banking organ-
ization within the state which account shall earn interest at a rate
which shall be the prevailing rate earned by other such deposits made
with banking organizations in such area.
S 2. Section 7-103 of the general obligations law is amended by adding
a new subdivision 2-c to read as follows:
2-C. (A) UPON THE TERMINATION OF A RESIDENTIAL TENANCY AND SURRENDER
OF POSSESSION THEREOF, THE PERSON RECEIVING MONEY DEPOSITED OR ADVANCED
AS SECURITY FOR PERFORMANCE OF THE CONTRACT OR AGREEMENT SHALL RETURN
ANY SUCH MONEY PLUS ANY ACCRUED AND UNPAID INTEREST WITHIN THIRTY DAYS
BY PERSONAL DELIVERY, OR REGISTERED OR CERTIFIED MAIL, TO THE PERSON
MAKING SAID DEPOSIT OR ADVANCE. THE LANDLORD MUST AT THE TIME THE MONEY
IS RETURNED FURNISH A STATEMENT TO THE TENANT SHOWING THE AMOUNT OF THE
SECURITY DEPOSIT; ANY ACCRUED AND UNPAID INTEREST THEREON; SEPARATELY
ITEMIZED DEDUCTIONS, IF ANY, AND THE BASIS THEREOF AS CLAIMED BY THE
LANDLORD; AND THE NET AMOUNT RETURNED TO THE TENANT.
(B) PRIOR TO SAID RETURN IT SHALL BE PERMISSIBLE TO DEDUCT FROM SUCH
MONEY DEPOSITED OR ADVANCED: (I) ANY UNPAID RENT OR ADDITIONAL COST
WHICH HAS NOT BEEN LAWFULLY WITHHELD OR (II) A REASONABLE AMOUNT NECES-
SARY TO REPAIR ANY ACTUAL DAMAGE, ORDINARY WEAR AND TEAR EXCLUDED,
CAUSED TO THE DWELLING UNIT BY THE PERSON MAKING THE DEPOSIT OR ADVANCE
OR ANYONE UNDER HIS CONTROL. ANY SUCH DEDUCTION SHALL BE ITEMIZED IN
WRITING, WITH NOTICE BEING GIVEN TO THE PERSON MAKING THE DEPOSIT OR
ADVANCE IN THE SAME MANNER AND WITHIN THE SAME TIME PERIOD AS SPECIFIED
IN THIS SUBDIVISION FOR THE RETURN OF MONEY DEPOSITED. SUCH STATEMENT
SHALL CONTAIN AN ITEMIZED DESCRIPTION OF SUCH DAMAGES; THE ESTIMATED OR
ACTUAL COST OF REPAIRS OF EACH ITEM; AND THE AMOUNT OF ANY OTHER
EXPENSES WHICH ARE THE RESPONSIBILITY OF THE TENANT, AND HIS OR HER
REASON THEREFOR. IF ANY REPAIRS HAVE BEEN COMPLETED BY THE LANDLORD OR
HIS OR HER STAFF THAT FACT SHALL BE NOTED ON THE STATEMENT OPPOSITE THE
PARTICULAR ITEM OF DAMAGE TOGETHER WITH THE ACTUAL COST OF REPAIR.
(C) MERE ACCEPTANCE BY THE TENANT OF ANY STATEMENT RENDERED OR MONEY
RETURNED PURSUANT TO THE PROVISIONS OF THIS SECTION SHALL NOT OPERATE OR
BE CONSTRUED TO DISCHARGE THE LANDLORD FROM DUTY TO RETURN MONEY SUBSE-
QUENTLY DETERMINED TO HAVE BEEN WRONGFULLY RETAINED.
(D) IN ANY ACTION BROUGHT UNDER THIS SECTION TO RECOVER THE AMOUNT OF
THE SECURITY DEPOSIT AND ANY ACCRUED INTEREST OWED TO HIM OR HER, THE
BURDEN OF PROVING THE REASONABLENESS OF ANY DEDUCTIONS SHALL BE ON THE
PERSON WHO ASSERTS THEM.
(E) IN ANY SUCH ACTION WHERE THE COURT FINDS THAT THE PERSON RECEIVING
THE MONEY DEPOSITED OR ADVANCED, FRAUDULENTLY OR WITHOUT LEGITIMATE
BASIS THEREFOR: (I) FAILED TO DEPOSIT THE MONEY SO DEPOSITED OR
ADVANCED IN SUCH AN INTEREST BEARING ACCOUNT IF REQUIRED, OR (II) FAILED
TO FURNISH THE STATEMENT HEREIN REQUIRED, OR (III) FAILED OR REFUSED TO
RETURN OR ACCOUNT FOR SAID MONEY TO THE PERSON MAKING THE DEPOSIT OR
ADVANCE WITHIN THIRTY DAYS FROM THE DATE OF TERMINATION OF THE TENANCY,
OR (IV) MADE UNAUTHORIZED DEDUCTIONS FROM SAID PERSON'S DEPOSIT OR
ADVANCE, THE COURT MAY AWARD AS A CIVIL PENALTY NO MORE THAN THREE TIMES
THE AMOUNT OF MONEY DETERMINED TO HAVE BEEN WRONGFULLY RETAINED OR, IN
THE EVENT OF FAILURE TO DEPOSIT THE MONEY IN AN INTEREST BEARING ACCOUNT
IF REQUIRED, THREE TIMES THE AMOUNT OF INTEREST THE MONEY WOULD REASON-
ABLY HAVE EARNED IF SO DEPOSITED WITHOUT DEDUCTION FOR ANY ADMINIS-
A. 3838 3
TRATION EXPENSE PLUS, IN EITHER CASE, INTEREST ON SUCH AMOUNT, PLUS
REASONABLE ATTORNEY'S FEES AND EXPENSES.
S 3. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.