N.Y. Comp. Codes R. & Regs. tit. 9 § 1642-5.1

Current through Register Vol. 46, No. 25, June 18, 2024

Section 1642-5.1 - General

(a) For protection against loss or damage to local agency property occupied or used by a tenant and discovered upon the vacating of the unit by the tenant, and to insure the payment of rent which may be due at that time, local agencies may require tenants to pay an amount, known as a security deposit, in advance of and as a condition to occupancy. This amount is in addition to and is normally paid in advance of occupancy simultaneously with the first month's rent. Security deposits are held by the local agency until the termination of the tenancy when deduction is made of any amount that may remain due from the tenant and the balance is refunded. Under the law of the State of New York, security deposits are made trust funds. Their misapplication is a serious matter and can involve criminal as well as civil penalties.

(b) The following general rules should be strictly adhered to:

(1) Security deposits should be segregated in a separate interest bearing bank account, and each person making such advance shall be notified in writing as to name and address of such banking organization, and amount of deposit. Security deposits are to be held in such account, undisturbed until tenant vacates, and may not be applied to loss or damage to local agency property in the interim. The local agency should compensate itself for such interim losses and damages by charging, and collecting from, the tenants currently, and not by applying the security deposits.

(2) The security deposit, plus interest, but less any deductions for rent due, loss or damage to property, or other charges, shall be returned to the tenant as soon as possible after the apartment is vacated.

(3) Security deposit refunds are to be mailed to a forwarding address after the vacated apartment has been inspected and rented. The new address of the vacated tenant is to be recorded on the ledger card of the vacated tenant. In addition, a statement shall be mailed to the former tenant indicating all charges and credits to his account.

(4) Security deposit refund checks are not to be cashed from project funds under any circumstances.

(5) Unclaimed security deposits should be kept open at least six years from date tenant vacates premises.

(6) The housing project shall be entitled to receive for administration expenses, the sum of one percent per annum of the security money so deposited. The balance of the interest credited by the banking organization shall be annually paid to the person making the deposit of security money.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 1642-5.1