S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6423
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               March 4, 2025
                                ___________
 
 Introduced by M. of A. LASHER -- read once and referred to the Committee
   on Judiciary
 
 AN  ACT to amend the general obligations law, in relation to the liabil-
   ity of a grantee or assignee for deposits made by tenants upon convey-
   ance of rent stabilized dwelling units

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 7-107 of the general obligations law, as added by
 chapter 917 of the laws of 1984, is amended to read as follows:
   § 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] SUCH TENANT'S lease,
 plus any accrued interest, if [his] SUCH TENANT 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 dwell-
 ing 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]  SUCH
 RECEIVER  pursuant to subdivision one of section 7-105 of this [chapter]
 TITLE and to the operating income in excess of expenses generated during
 [his or its] SUCH RECEIVER'S  period  of  receivership.  NO  DEPOSIT  OR
 ADVANCE SHALL EXCEED THE AMOUNT OF ONE MONTH'S RENT, PLUS ACCRUED INTER-
 EST,  UNDER  ANY  CONTRACT  FOR  THE LEASE OR TENANCY OF A DWELLING UNIT
 SUBJECT TO THIS SECTION.
   3. Any agreement by a lessee or tenant of a dwelling unit  waiving  or
 modifying  [his]  SUCH  LESSEE'S OR TENANT'S rights as set forth in this
 section shall be void.  THE ENTIRE AMOUNT OF  THE  DEPOSIT  OR  ADVANCE,
 
              

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02363-07-5
 A. 6423                             2

 PLUS  ACCRUED  INTEREST,  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 PREM-
 ISES WITH THE LANDLORD OR THE LANDLORD'S AGENT TO DETERMINE  THE  CONDI-
 TION  OF  THE  PROPERTY.  IF  THE  TENANT  REQUESTS SUCH INSPECTION, THE
 PARTIES SHALL EXECUTE A WRITTEN AGREEMENT BEFORE THE TENANT BEGINS OCCU-
 PANCY OF THE UNIT ATTESTING TO THE CONDITION OF THE PROPERTY AND SPECIF-
 ICALLY NOTING ANY EXISTING DEFECTS OR DAMAGES. UPON THE TENANT'S  VACAT-
 ING  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  CONDI-
 TION  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, PLUS ACCRUED
 INTEREST. 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,
 A. 6423                             3
 
 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 DEPOS-
 IT 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 SUBDIVI-
 SION.
   (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  PARA-
 GRAPH  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 CLOS-
 ING  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 MODI-
 FYING  THEIR  RIGHTS  AS  SET  FORTH IN THIS SECTION SHALL BE ABSOLUTELY
 VOID.
   § 2. 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.