Maximum deposit amount
New York caps security deposits at 1 month of rent. This applies regardless of pet ownership, rental amount, or perceived risk. Charging more than the cap exposes you to statutory penalties — often 2-3× the over-collected amount. New York does NOT allow a separate pet deposit on top of the security deposit — pet-related risks must fit within the security deposit limit.
Return deadline after move-out
New York requires landlords to return the security deposit (or provide an itemized statement of deductions plus the remaining balance) within 14 days after the tenant surrenders the unit. Missing this deadline can forfeit your right to ANY deductions — meaning you'd owe the full deposit back even for legitimate damage. Some states also impose double or treble damages for willful withholding.
Allowed deductions
Permitted: unpaid rent, damage beyond normal wear and tear (e.g., large stains, holes in walls, broken fixtures), cleaning required to return the unit to move-in condition, unpaid utilities the tenant was responsible for. NOT permitted: normal wear (faded paint, minor carpet wear after 3+ years, small nail holes from hanging pictures, worn weather stripping). Document everything with timestamped photos at move-in AND move-out.
Where the deposit must be held
New York requires deposits be held in a separate, interest-bearing account at a New York bank, and the interest (less a 1% admin fee) accrues to the tenant. This is the area where landlords most commonly trip — using deposits for operating expenses creates personal liability.
Itemized statement requirements
When deductions are taken, New York requires an itemized statement listing each deduction with a description and dollar amount. Vague descriptions ("cleaning") aren't enough — courts want specifics ("3 hours cleaning at $40/hr = $120; carpet steam clean = $180"). Attach receipts where possible. The statement must be delivered by the return deadline.