BILL NUMBER: S3379

SPONSOR: HOYLMAN
 
TITLE OF BILL:

An act to amend the general obligations law, in relation to a cap on
security deposits for residential leases of one year or longer

 
PURPOSE:

This bill would prohibit security deposits and move in fees for residen-
tial leases of at least one year from exceeding one month's rent.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one amends section 7-103 of the general obligations law by
adding a new subdivision 2-c.

Section two sets forth the effective date.

 
              

JUSTIFICATION:

A security deposit is an upfront payment demanded by a landlord from a
prospective tenant to insure against any damages made to a unit by an
outgoing tenant. In theory, security deposits should be returned in full
if no damages are made, and the landlord should retain no more than the
amount necessary to cover any expenses associated with needed repairs.
In practice, security deposits are poorly regulated and the result is an
arbitrary process that usually benefits the landlord and leaves the
tenant with no formal recourse to recover lost money.

Landlords often require upwards of two months' rent in security, and in
a city as unaffordable as New York, many prospective tenants struggle to
gather the security, and other fees required at an initial lease sign-
ing.

According to a report from the office of New York City Controller Scott
Stringer, New York City tenants spent $507 million on security deposits
in 2016. Often times, a security deposit for a residential lease can be
equivalent to two months' worth of rent payments or more, creating a
serious financial burden for New Yorkers already struggling with exorbi-
tant housing costs. In addition to security deposits, prospective
tenants may also be faced with pet deposits/fees as well as fees for
background and credit checks, further increasing the cost due upfront to
secure housing.

A security deposit, meant to provide security to a landlord in case of
damages to a unit, and any additional fees should not prevent working-
class residents from being able to obtain safe and affordable housing. A
number of states, including Massachusetts, Hawaii and Delaware have
enacted legislation at the state level to prohibit landlords from taking
advantage of tenants through excessive security deposits. This legis-
lation would protect tenants entering residential leases in New York
State by not allowing security deposits and any additional move in fees
to exceed more than one month's rent.

 
LEGISLATIVE HISTORY:

New bill.
 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
This act shall take effect in 60 days.