Legislation

* § 7-107. Liability of a grantee or assignee for deposits made by
tenants upon conveyance of rent stabilized dwelling units. 1. This
section shall apply only to dwelling units subject to the New York city
rent stabilization law of nineteen hundred sixty-nine or the emergency
tenant protection act of nineteen seventy-four.

2. (a) Any grantee or assignee of any dwelling unit referred to in
subdivision one of this section shall be liable to a tenant for any sum
of money or any other thing of value deposited as security for the full
performance by such tenant of the terms of his lease, plus any accrued
interest, if his or its predecessor in interest was liable for such
funds. Such liability shall attach whether or not the successor in
interest has, upon the conveyance of such dwelling unit, received the
sum as deposited.

(b) The liability of a receiver for payment of any security deposit
plus accrued interest pursuant to this subdivision shall be limited to
the amount of such deposit actually turned over to him or it pursuant to
subdivision one of section 7-105 of this chapter and to the operating
income in excess of expenses generated during his or its period of
receivership.

3. Any agreement by a lessee or tenant of a dwelling unit waiving or
modifying his rights as set forth in this section shall be void.

* NB Effective until November 15, 2025

* § 7-107. Deposits made by tenants of rent stabilized dwelling
units. 1. This section shall apply only to dwelling units subject to
the New York city rent stabilization law of nineteen hundred sixty-nine
or the emergency tenant protection act of nineteen seventy-four.

2. No deposit or advance shall exceed the amount of one month's rent,
under any contract for the lease or tenancy of a dwelling unit subject
to this section.

3. The entire amount of the deposit or advance, shall be refundable to
the tenant upon the tenant's vacating of the premises 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 terms of the lease or tenancy, and moving and storage of the
tenant's belongings. 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.

4. After initial lease signing but before the tenant begins occupancy,
the landlord shall offer the tenant the opportunity to inspect the
premises with the landlord or the landlord's agent to determine the
condition of the property. If the tenant requests such inspection, the
parties shall execute a written agreement before the tenant begins
occupancy of the unit attesting to the condition of the property and
specifically noting any existing defects or damages. Upon the tenant's
vacating of the premises, the landlord may not retain any amount of the
deposit or advance due to any condition, defect, or damage noted in such
agreement. The agreement shall be admissible as evidence of the
condition of the premises at the beginning of occupancy only in
proceedings related to the return or amount of the security deposit.

5. Within a reasonable time after notification of either party's
intention to terminate the tenancy, unless the tenant terminates the
tenancy with less than two weeks' notice, the landlord shall notify the
tenant in writing of the tenant's right to request an inspection before
vacating the premises and of the tenant's right to be present at the
inspection. If the tenant requests such an inspection, the inspection
shall be made no earlier than two weeks and no later than one week
before the end of the tenancy. The landlord shall provide at least
forty-eight hours written notice of the date and time of the inspection.
After the inspection, the landlord shall provide the tenant with an
itemized statement specifying repairs or cleaning that are proposed to
be the basis of any deductions from the tenant's deposit. The tenant
shall have the opportunity to cure any such condition before the end of
the tenancy. Any statement produced pursuant to this subdivision shall
only be admissible in proceedings related to the return or amount of the
security deposit.

6. 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. If a landlord
fails to provide the tenant with the statement and deposit within
fourteen days, the landlord shall forfeit any right to retain any
portion of the deposit.

7. In any action or proceeding disputing the amount of any portion of
the deposit retained, the landlord shall bear the burden of proof as to
the reasonableness of the amount retained.

8. Any person who violates the provisions of this section shall be
liable for actual damages, provided a person found to have willfully
violated this section shall be liable for punitive damages of up to
twice the amount of the deposit or advance.

9. (a) In circumstances where any sum of money or any other thing of
value deposited as security for the full performance by a tenant of the
terms of their lease is not turned over to a successor in interest
pursuant to section 7-105 of this title, the grantee or assignee of the
leased premises shall also be liable to such tenant, upon conveyance of
such leased premises, for the repayment of any such security deposit,
plus accrued interest, as to which such grantee or assignee has actual
knowledge.

(b) For purposes of this section, a grantee or assignee of the leased
premises shall be deemed to have actual knowledge of any security
deposit which is (i) deposited at any time during the six months
immediately prior to closing or other transfer of title in any banking
organization pursuant to subdivision two-a of section 7-103 of this
title, or (ii) acknowledged in any lease in effect at the time of
closing or other transfer of title, or (iii) supported by documentary
evidence provided by the tenant or lessee as set forth in paragraph (c)
of this subdivision.

(c) With respect to any leased premises for which there is no record
of security deposit pursuant to subparagraph (i) or (ii) of paragraph
(b) of this subdivision, the grantee or assignee of the leased premises
shall be obligated to notify the tenant thereof in writing no later than
thirty days following the closing or other transfer of title to the fact
that there is no record of a security deposit for said leased premises
and that unless the tenant within thirty days after receiving notice
provides them or it with documentary evidence of deposit, the tenant
shall have no further recourse against them or it for said security
deposit. For purposes of this subdivision, "documentary evidence" shall
be limited to any cancelled check drawn to the order of, a receipt from,
or a lease signed by any predecessor in interest, if such predecessor's
interest in the leased premises existed on or after the effective date
of this paragraph. Except as otherwise provided by subparagraphs (i) and
(ii) of paragraph (b) of this subdivision, the grantee or assignee of
the leased premises shall not be charged with actual knowledge of the
security deposit where the tenant fails within the thirty-day period to
provide such documentary evidence. Where the grantee or assignee of the
leased premises fails to notify the tenant as specified in this
paragraph within thirty days following the closing or other transfer of
title, the tenant shall be entitled to produce documentary evidence at
any time.

(d) The grantee or assignee of the leased premises shall have the
right to demand that the grantor or assignor thereof establish an escrow
account equal to one month's rent for any leased premises for which
there is no record of a security deposit pursuant to paragraph (b) of
this subdivision to be used for the purpose of holding harmless the
grantee or assignee in any case where, at a date subsequent to the
closing or other transfer of title, the tenant gives notice pursuant to
paragraph (c) of this subdivision.

(e) The liability of a receiver for payment of any security deposit
plus accrued interest pursuant to this subdivision shall be limited to
the amount of such deposit actually turned over to them or it pursuant
to subdivision one of section 7-105 of this title and to the operating
income in excess of expenses generated during their or its period of
receivership.

10. Any agreement by a lessee or tenant of a dwelling waiving or
modifying their rights as set forth in this section shall be absolutely
void.

* NB Effective November 15, 2025