Rent Coach: Fair and foul play with security deposits

By Mike Akerly | September 8, 2011 - 11:07AM

Q. I signed a six-month lease that stated that I would give at least thirty days notice if I left prior to the expiration date. I gave forty-five days notice and my landlord found another tenant, but now my landlord won’t return my security deposit. Can she do that?

A. No. If your agreement stated that you had the right to vacate at any time by giving thirty days notice, then you really had a month-to-month lease. By giving forty-five days notice, you satisfied your responsibility to your landlord and she is obligated to return your deposit if there was no damage to the apartment.

At this point, you have a few options. Try calling the Consumer Frauds and Protection Bureau of the New York State Attorney General's Office as they will contact your landlord directly and inform her of her legal obligations. You can also file a complaint with the New York State Division of Housing and Community Renewal. Lastly, you can file a claim in small claims court and seek a judgment that you would then need to collect on. Perhaps notifying your landlord of your intention to do all of the above will be enough to convince her to return your deposit.

It's worth noting that if you didn't have a month-to-month lease, your landlord would still not have the right to keep your security deposit. A security deposit can only be used to compensate a landlord for actual damages, like unpaid rent or damage to the apartment. Assuming that the other tenant began paying rent at the time you stopped, your landlord had no damages.

Q. I have lived in a rent stabilized apartment for twenty years but never paid a security deposit. The building was sold to a new owner who now wants to collect a deposit and has sent me an I.R.S. Form W-9. Am I required to submit the deposit and W-9?

A. The new landlord has the right to request the security deposit if your current lease requires it or at the time they offer you a renewal.

In NYC, landlords are required to hold your security deposit in an interest bearing account and to pay you a portion of that interest at the end of your lease. A Form W-9 is used to ask a person to provide their name, and address and social security number so that person requesting the form can properly issue tax documents to the IRS. Since your deposit will be accruing interest, it is proper for your landlord to request the W-9.

Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. Rent Coach also appears in AM New York's Thursday real estate section.

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