New York Security Deposit and Late Fee Rules: the Numbers the 2019 Law Fixed

Name: Leasella
Price: 29 USD

Updated 2026-07-19 · 6 min read · General information, not legal advice

New York’s 2019 Housing Stability and Tenant Protection Act replaced a patchwork of custom with hard numbers. For market-rate (non-rent-stabilized) rentals, the two money clauses in a lease — the deposit and the late fee — are now governed by specific statutory limits, and leases written before 2019 (or copied from out-of-state forms) routinely conflict with them. Here is what the statutes say.

The deposit: one month, no more (GOL §7-108)

General Obligations Law §7-108 caps the deposit or advance at one month’s rent for non-rent-stabilized dwelling units (seasonal-use units and owner-occupied co-ops are excepted). The cap covers advance rent too: a lease that collects first month, last month, and a deposit collects more than the statute permits. Rent-stabilized units have their own rules outside this guide.

Fourteen days, itemized, or the right to retain is gone

Within 14 days after the tenant vacates, the statute requires an itemized statement of anything withheld plus the return of the balance. The consequence for missing the deadline is written into the statute itself: the landlord forfeits any right to retain any portion of the deposit. In a dispute over amounts withheld, the statute also places the burden of proving reasonableness on the landlord.

What the statute allows a deposit to cover

Unpaid rent
Damage caused by the tenant beyond normal wear and tear
Unpaid utility charges payable directly to the landlord under the lease
Moving and storage of the tenant’s belongings

A lease clause authorizing deductions beyond that list — routine repainting, general cleaning, re-letting costs — conflicts with the statute’s text. Separately, General Obligations Law §7-103 treats deposits as trust funds: they may not be commingled with the landlord’s own money, and buildings of six or more units must hold them in an interest-bearing New York account.

The late fee: $50 or 5%, whichever is less, and never before day 5 (RPL §238-a)

Real Property Law §238-a says a late fee may not be demanded unless rent remains unpaid five days past the due date, and the fee may not exceed the lesser of $50 or 5% of the monthly rent. Both halves matter: a $150 fee on a $3,000 rent fails the cap (5% is $150, but $50 is less), and any fee triggered on day 2 or 3 fails the timing. The statute also voids lease clauses that waive these limits, and New York courts have treated fees dressed up under other labels as what they are — a late fee subject to the same limits.

Where this shows up in real files

The most common conflicts are inherited ones: a pre-2019 lease renewed on autopilot with a two-month deposit clause, or a national template’s “10% late charge” that no one re-read after the HSTPA. The clause sits quietly until money is withheld or a fee is deducted from a deposit — which is when the 14-day forfeiture rule and the fee caps decide the outcome. Whether a specific clause survives is a question for counsel; what the statute says is above.

What Leasella checks

For New York properties, Leasella’s lease review flags late fees that exceed the lesser-of-$50-or-5% cap or apply sooner than five days, and deposit clauses that collect more than one month, authorize deductions beyond the statutory list, or contradict the trust-fund rules — each flagged finding quotes the clause. The reconciliation audit also cross-references what was actually collected against your bank statements.

This guide is general information, not legal advice, and statutes change. For decisions about a specific lease or tenancy, review the current statute and consult a Massachusetts landlord-tenant attorney.