NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A761
SPONSOR: Rosenthal L (MS) PURPOSE:
This bill would permit tenants entering into a residential lease the
ability to pay their security deposit in installments.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends section 7-103 of the general obligations law by
adding a new subdivision 2-c.
Section two sets forth the effective date.
JUSTIFICATION:
A security deposit is an upfront payment demanded by a landlord from a
prospective tenant to insure against any damages made to a unit by an
outgoing tenant. hi theory, security deposits should be returned in full
if no damages are made, and the landlord should retain no more than the
amount necessary to cover any expenses associated with needed repairs.
In practice, security deposits are poorly regulated and the result is an
arbitrary process that usually benefits the landlord and leaves the
tenant with no formal recourse to recover lost money.
New York State residents have long struggled to find affordable housing,
especially residents living in New York City. According to a report from
the office of New York City Controller Scott Stringer, New York City
tenants spent $507 million on security deposits in 2016. Often times, a
security deposit for a residential lease can be equivalent to two
months' worth of rent payments or more, creating a serious fmancial
burden for New Yorkers already struggling with exorbitant housing costs.
Most landlords will require this security deposit to be paid in full
along with their first month's rent at the time of signing a lease.
A security deposit, meant to provide security to a landlord in case of
damages to a unit, should not be preventing working-class residents from
being able to obtain safe and affordable housing. This legislation would
protect tenants and ensure renting an apartment does not become an
excessive fmancial burden by allowing tenants to pay their security
deposits in up to six installments. Landlords under this legislation
would be prohibited from imposing any additional fees or penalties on
tenants who elect to pay such deposit in installments.
LEGISLATIVE HISTORY:
2021-22: A.440 - Referred to Judiciary; S.3504 - Referred to Judiciary
2019-20: A.4785 - Referred to Judiciary; S.3026 - Referred to Judiciary
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
This act shall take effect in 60 days
STATE OF NEW YORK
________________________________________________________________________
761
2023-2024 Regular Sessions
IN ASSEMBLY
January 11, 2023
___________
Introduced by M. of A. L. ROSENTHAL, SIMON, JEAN-PIERRE, HYNDMAN, CRUZ,
COLTON, DARLING, DE LOS SANTOS -- Multi-Sponsored by -- M. of A. HEVE-
SI, MANKTELOW, McDONOUGH -- read once and referred to the Committee on
Judiciary
AN ACT to amend the general obligations law, in relation to permitting
lessees the option to pay security deposits in installments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 7-103 of the general obligations law is amended by
2 adding a new subdivision 2-c to read as follows:
3 2-c. For any deposit or advance under this section, the person making
4 such deposit or advance shall have the option to pay such deposit or
5 advance in installments.
6 (a) Such installments shall be due on the first of each subsequent
7 month until the deposit or advance is paid in full.
8 (b) For leases under this section of a term of one year or longer,
9 tenants shall be allowed to pay not more than six consecutive and equal
10 installments.
11 (c) Landlords shall not impose any additional fees or interest on a
12 tenant that pays his or her security deposit or advance under this
13 subdivision.
14 (d) Any agreement to pay a security deposit in installments shall be
15 included within such contract or agreement and shall specify the total
16 deposit amount due and the amount due for each installment.
17 (e) This subdivision shall apply to any deposit, advance or non-re-
18 fundable fee used as a down payment for use of rental property.
19 (f) Any person who violates the provisions of this subdivision shall
20 be punished by a civil fine of up to fifteen percent of the annual rent
21 under such contract or agreement.
22 § 2. This act shall take effect on the sixtieth day after it shall
23 have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00699-01-3
