S T A T E O F N E W Y O R K
________________________________________________________________________
952--A
Cal. No. 344
2025-2026 Regular Sessions
I N S E N A T E
(PREFILED)
January 8, 2025
___________
Introduced by Sen. KAVANAGH -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary -- reported
favorably from said committee, ordered to first and second report,
ordered to a third reading, amended and ordered reprinted, retaining
its place in the order of third reading
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02363-06-5
S. 952--A 2
[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,
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
S. 952--A 3
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 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.
S. 952--A 4
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.
