Rent-Stabilized Security Deposit Rules in New York (§ 7-107)
On November 15, 2025, rent-stabilized apartments got a security-deposit statute of their own. Chapter 436 of the Laws of 2025 rewrote General Obligations Law § 7-107 and gave stabilized units the same one-month cap, the same closed list of deductions, the same inspections, and the same rule that has caught out landlords everywhere else in New York since 2019: fourteen days to send the itemized statement and return the money, or forfeit the entire deposit. Roughly a million apartments moved under it. Statutes verified July 11, 2026.
If you are looking for the rules for an ordinary market-rate rental, they are on the main New York page. This guide is about what is different.
What changed, and why most guidance still says otherwise
Before Chapter 436, the 2019 reforms that gave New York tenants the one-month cap and the 14-day rule reached non-rent-stabilized units. Stabilized apartments sat outside them. That is why so much of what you will find online, including on reputable law-firm sites and in guides that have not been touched since 2024, still tells you these rules do not apply to a stabilized unit.
That is no longer true, and the consequence of relying on it is not academic. It is forfeiture of the whole deposit.
This act shall take effect on the thirtieth day after it shall have become a law and shall apply to any lease or rental agreement or renewal of a lease or rental agreement entered into on or after such date. L.2025, c.436 (S952-B), § 2
The lease date is decisive, and nearly every source omits it
Read that clause again. The act applies to any lease or rental agreement or renewal of a lease or rental agreement entered into on or after its effective date. Not to move-outs after that date. To leases entered into after it.
So a rent-stabilized tenant who moves out in 2026, on a lease signed in 2024 and never since renewed, is not covered by the new § 7-107 rules. This is the single most-missed condition in New York deposit law, and we have not found another consumer source that states it. It matters in both directions: a landlord who believes it does not apply when it does forfeits everything, and a landlord who assumes it applies when it does not may be operating under a rule that no court would enforce against them.
What to do if your lease predates November 15, 2025. Nobody can tell you whether the new rules cover a tenant who moves out afterwards. No court has said. DHCR has not said. The Attorney General has not said. Anyone who gives you a confident answer is guessing. But look at the two sides of that uncertainty. If you comply with the 14-day rule and it turned out not to apply, it cost you nothing: you sent an itemized statement and returned the money promptly. If you do not comply and it did apply, you forfeit every dollar of the deposit and face punitive damages of up to twice it. Comply either way.
There is a related case we genuinely cannot answer, and we would rather say so than invent a rule: a DHCR renewal offer signed before November 15, 2025 for a term commencing after it. Stabilized renewals go out 150 to 90 days ahead, so this affects a large late-2025 and early-2026 cohort. "Entered into" most naturally means executed rather than commenced, but that is our reading, and it is untested.
Rent stabilized is not rent controlled
This is the most common error in New York deposit writing, and it is made by sources that ought to know better. Rent control and rent stabilization are different systems, created by different laws, and after 2025 they land in different places.
- Rent stabilized: the NYC Rent Stabilization Law of 1969 or the Emergency Tenant Protection Act of 1974. Governed by § 7-107: the one-month cap, the inspections, and the 14-day forfeiture rule, for leases from November 15, 2025.
- Rent controlled: the city rent and rehabilitation law, or the emergency housing rent control law. Expressly excepted from the whole of § 7-108(1-a), and never reached by § 7-107 either. Rent-controlled units get neither 14-day regime.
Except in dwelling units subject to the city rent and rehabilitation law or the emergency housing rent control law, continuing care retirement communities licensed pursuant to article forty-six or forty-six-A of the public health law, assisted living providers licensed pursuant to article forty-six-B of the public health law, adult care facilities licensed pursuant to article seven of the social services law, senior residential communities that have submitted an offering plan to the attorney general, or not-for-profit independent retirement communities that offer personal emergency response, housekeeping, transportation and meals to their residents: N.Y. Gen. Oblig. Law § 7-108(1-a) (opening language)
Most law-firm content on the internet says the reforms cover "rent stabilized and rent controlled" tenancies. It is wrong on both halves. We do not cover rent-controlled units in our tool, and we say so plainly rather than guess: what actually caps and governs a rent-controlled deposit lives in regulations we have not verified to the standard we hold ourselves to. But note what a rent-controlled landlord is not free of, see the trust duty below, which has no exceptions at all.
And it is not a New York City rule
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. N.Y. Gen. Oblig. Law § 7-107(1)
The Emergency Tenant Protection Act has always reached Nassau, Westchester and Rockland counties, and since 2019 any municipality in the state may opt in after declaring a housing emergency, Kingston and Newburgh among those that have. A stabilized landlord in Yonkers, White Plains, Hempstead or Kingston is squarely inside § 7-107. Deciding that these rules do not reach you because you are not in the five boroughs is a maximally expensive mistake, because the penalty for getting it wrong is total.
The rule itself: fourteen days, for the statement AND the money
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. N.Y. Gen. Oblig. Law § 7-107(6)
Word for word, that is the same rule that applies to every other New York rental. The clock runs from the day the tenant actually vacated, not from the end of the lease. The day they moved out is not counted, so a July 24 move-out means everything is due by August 7. Weekends and holidays inside the fourteen days count. And the forfeiture is triggered by failing to provide "the statement and deposit": one deadline, two deliverables. A perfect itemization on day 12 with a cheque posted on day 18 is a forfeiture on the face of the text.
A letter for a stabilized apartment should cite § 7-107(6), not § 7-108(1-a)(e). It is a different statute, and § 7-108 does not govern the unit at all, so a document citing it is citing a law that does not apply to the tenancy. Our return-letter guide shows the same letter both ways, so you can see exactly what moves.
The cap here is absolute
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. N.Y. Gen. Oblig. Law § 7-107(2)
One month's rent, with no exceptions at all. The rules for other New York rentals carry two narrow escapes from the cap: a registered seasonal-use unit and an owner-occupied co-op. Neither exists in § 7-107. Do not carry them across.
The same closed list of four
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. N.Y. Gen. Oblig. Law § 7-107(3)
Unpaid rent; damage beyond normal wear and tear; unpaid utility charges the lease makes payable directly to the landlord; and moving and storing the tenant's belongings. That is the whole list. Flat cleaning fees, repainting for wear, turnover and administrative fees and legal fees are all off it. And if the tenant disputes what you kept, you bear the burden of proving the amount was reasonable.
Interest: stricter than the deposit statute
For an ordinary rental, an interest-bearing account is mandatory only in a property with six or more family dwelling units. For a rent-stabilized apartment, the Rent Stabilization Code (9 NYCRR § 2525.4) requires one regardless of building size. There is no six-unit threshold here.
The landlord may keep an administration fee of 1% per year, and note that this is 1% of the deposit itself, not 1% of the interest earned. The rest of the interest belongs to the tenant. New York publishes no deposit-interest rate anywhere, so the figure is whatever your account actually earned; ask your bank.
One honest caveat, because our calculator will apply it to your figures. Where the account earned less than 1% a year, this tool caps your fee at what it actually earned rather than letting it dip into the deposit itself. Whether the law allows a landlord to take the full 1% in that case is genuinely open, and no court has decided it. That is our reading, and we take the cautious side, because taking less fee than you were entitled to is still lawful while invading the tenant's principal is not.
The damages provision is worded more broadly
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. N.Y. Gen. Oblig. Law § 7-107(8)
Look closely at the words: liability attaches to violating "the provisions of this section". The equivalent rule for other rentals says "this subdivision". The 2025 drafters used the broader word, so the argument that a stabilized landlord is exposed for an inspection violation, and not only for missing the 14 days, is if anything stronger here.
Two things to hold on to about damages. The forfeiture is automatic: no bad faith needed, no good-faith exception. Punitive damages are not. They require a court to find the violation willful, the award is discretionary, and it is capped at "up to" twice the deposit. Anyone telling you a late landlord simply "owes 2x" is overstating the law.
If you are buying a rent-stabilized building, this got easier
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. N.Y. Gen. Oblig. Law § 7-107(9)(a)
This is a real narrowing that almost nobody has noticed. The old rule made a purchaser of a rent-stabilized building liable for the deposits whether or not they ever received them. Chapter 436 deleted that sentence. Liability now attaches only to deposits the buyer has actual knowledge of.
Two cautions before you rely on it. The Attorney General's website still recites the old strict rule, so anyone reading it may be applying law that no longer governs the lease. And for a lease entered into before November 15, 2025 there is a genuine gap: the old rule was deleted from the statute books, yet the new one by its own terms does not reach older leases. If you are buying, the conservative assumption is that the old strict rule still governs those.
Nobody has litigated any of this yet
We want to be straight with you about the ground you are standing on. There is not a single court decision construing any part of § 7-107. Every reading on this page rests on the words of the statute itself. And be careful about assuming that decisions interpreting the equivalent rules for other rentals carry across: they were written about a different section, and § 7-107 is worded differently in several places, deliberately.
Where we are giving you our reading rather than the statute's own words, we say so on this page, every time. Where nobody knows, we say that too.
And the duty that binds you whatever kind of unit you rent
Whenever money shall be deposited or advanced on a contract or license agreement for the use or rental of real property as security for performance of the contract or agreement or to be applied to payments upon such contract or agreement when due, such money, with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset of the person receiving the same, but may be disposed of as provided in section 7-105 of this chapter. N.Y. Gen. Oblig. Law § 7-103(1)
Section 7-103 has no exceptions at all. It reaches stabilized units, ordinary rentals, rent-controlled apartments and the institutional categories the deposit rules exclude. The deposit is the tenant's money, held in trust, and it never becomes yours.
Mixing it with your own funds is commingling, and New York courts have held that commingling forfeits the entire deposit, even where the tenant breached the lease first, and no matter how perfectly you met the fourteen days. It is a second, independent forfeiture that no amount of paperwork can cure, and it is the half of the exposure that most New York guidance leaves out entirely. There is no small-landlord exemption and no building-size floor.
Work out your deadline free
The free New York deposit tool asks whether the unit is rent stabilized before anything else, because that one answer decides which statute governs. It then asks the lease date, works out the strict fourteen-day deadline from the move-out date, checks your deductions against the closed list, and prepares a letter citing § 7-107 rather than § 7-108. No sign-up, and nothing you type ever leaves your browser.
Frequently asked questions
Do New York’s 14-day security deposit rules apply to rent-stabilized apartments?
Yes, now, and this changed recently enough that most guidance still says otherwise. Chapter 436 of the Laws of 2025 rewrote General Obligations Law § 7-107, which had existed since 1984 but said something else entirely. It now gives rent-stabilized units the same one-month cap, the same closed list of deductions, the same inspections, and the same fourteen-days-or-forfeit rule. It took effect on November 15, 2025, and it applies only to leases, rental agreements and renewals entered into on or after that date.
What is the deadline to return a rent-stabilized security deposit in New York?
Fourteen days after the tenant vacates, for the itemized statement AND the remaining deposit, both. Miss it and the landlord forfeits the right to retain any portion of the deposit (N.Y. Gen. Oblig. Law § 7-107(6)). The wording is identical to the rule for other rentals, but it is a different statute, so a stabilized deposit letter should cite § 7-107(6), not § 7-108(1-a)(e).
Do the rules apply if my rent-stabilized lease started before November 15, 2025?
Nobody can tell you for certain, and any source that says otherwise is guessing. The act applies by its own terms to leases and renewals entered into on or after that date, and no court, DHCR or Attorney General guidance has yet addressed a tenant on an older lease who moves out afterwards. Look at the asymmetry: complying with the 14-day rule when it did not apply costs you nothing, while failing to comply when it did forfeits the entire deposit and exposes you to punitive damages. Comply either way.
Are rent-controlled apartments covered too?
No, and this is the most common error in New York deposit writing. Rent control and rent stabilization are different systems. Rent-CONTROLLED units are expressly excepted from the whole of § 7-108(1-a), and § 7-107 reaches only units under the NYC Rent Stabilization Law of 1969 or the Emergency Tenant Protection Act of 1974, which does not include them. So rent-controlled units get NEITHER 14-day regime. Most law-firm content says the reforms cover "rent stabilized and rent controlled" tenancies. That is wrong on both halves.
Is rent stabilization only in New York City?
No, and routing on that assumption is an expensive mistake. The Emergency Tenant Protection Act has always reached Nassau, Westchester and Rockland counties, and since 2019 any municipality statewide may opt in after declaring a housing emergency, Kingston and Newburgh among them. A stabilized landlord in Yonkers, White Plains, Hempstead or Kingston is squarely inside § 7-107.
How much can a landlord charge for a rent-stabilized security deposit?
One month’s rent, and here the cap is absolute. Unlike the rules for other rentals, § 7-107 contains no institutional carve-outs, no seasonal-use exception and no owner-occupied co-op exception. None of those lift the cap for a stabilized unit (N.Y. Gen. Oblig. Law § 7-107(2)).
Does a rent-stabilized deposit have to earn interest?
Yes, and the requirement is stricter than for other rentals. The Rent Stabilization Code (9 NYCRR § 2525.4) requires an interest-bearing New York account for a stabilized unit regardless of building size: there is no six-unit threshold as there is under the General Obligations Law. The landlord may keep an administration fee of 1% per year of the deposit itself, not 1% of the interest; the rest of the interest belongs to the tenant. Where the account earned less than 1% a year, whether the landlord may still take the full 1% and dip into the deposit is genuinely open and no court has decided it.
Has any court interpreted the new rent-stabilized deposit rules?
Not one. The section is only months old and there is no case law construing any part of it, so every reading rests on the words of the statute itself. Be careful about assuming that decisions interpreting § 7-108 carry across: the damages provision in § 7-107 is worded more broadly, hooking liability to a violation of the whole section rather than one subdivision.
About this page
Every rule above is cited to the New York statute it comes from, and each quote is verbatim, including the Legislature's own drafting. Every quoted passage is checked, automatically and character-by-character, against the official New York Senate legislative database. Statutes verified July 11, 2026. Primary sources: N.Y. Gen. Oblig. Law § 7-107 (official, nysenate.gov) and L.2025, c.436 (S952-B). Read how we verify the law. This page is general information for landlords, not legal advice; Deposit Record is not a law firm, and using this page creates no attorney-client relationship. Given that no court has yet interpreted this statute, a close call is a good reason to talk to a licensed New York attorney.