Termination

Most residential leases and rental agreements in New York require a security deposit. Landlords may use this deposit to repair any damage to the premises that goes beyond normal wear and tear or to cover rent left unpaid when a tenant moves out. While most landlords require a security deposit of one month's rent, there is no state law that limits the amount that may be charged.

Special rules, however, do apply to rent controlled or rent stabilized units in New York City and beyond. Security deposits for those particular residential rentals are typically capped. Tenants may consult with their city or county to learn more about local laws affecting rent controlled or rent stabilized property. Once a tenant vacates a rental property - by moving out and returning the keys --the landlord must return the security deposit within a reasonable time. The law does not define the term "reasonable time," but a period of 30 to 60 days is generally viewed as reasonable. If the deposit is not returned in full, the landlord must provide a written statement explaining any deductions taken. Landlords may use deposits to cover unpaid rent, unpaid utility charges or to pay other financial obligations outlined in the rental agreement. Deductions may also be taken when a tenant makes changes to the property or leaves the property damaged or excessively dirty. In that situation, the security deposit may be used to make repairs or to return the rental to the condition it was in when the lease began.

New York State law requires a landlord to hold a tenant's security deposit "in trust," meaning that the landlord may not use the money for personal purposes and must keep it separate from other funds he or she holds. If the landlord places the security deposit in a bank, it must be a New York bank and the tenant must be given the name and address of that financial institution. Additionally, when a rental property contains six or more units, the landlord must place the deposit in an interest-bearing account. While the landlord may keep one percent of the security deposit as an annual management fee, the remaining interest belongs to the tenant. The tenant may choose one of three options: (1) to subtract the interest from his or her rent; (2) to leave the interest in the bank until he or she is no longer a tenant; or (3) to receive the interest in a lump sum at the end of each year.

At times, a disagreement may occur between Landlord and tenant in connection with the return of a security deposit or the payment of interest. If the dispute cannot be resolved, the tenant may seek assistance from the Consumer Frauds and Protection Bureau of the New York State Attorney General's Office. The tenant may also opt to sue the landlord in Small Claims Court.

Small Claims Court is a special type of informal court where individuals can sue for money damages without needing a lawyer. A Small Claims Court can be found in every city, town and village in New York State. An individual may sue for up to $3,000 if filing the claim in a Town or Village Court or up to $5,000 if filing in City Court. A claim for damages exceeding these limits cannot be separated into two or more claims to meet the $3,000 or $5,000 limit; instead, it must be filed in a different Court. If a tenant believes that a security deposit was wrongfully withheld, he or she may sue the landlord in Small Claims Court as long as the claim meets the monetary requirement. Eviction cases, however, must be heard by a higher court.

Filing fees in Small Claims Court are minimal. In a Town or Village Court, an individual filing a claim of $1,000 or less must pay a $10 fee. For a claim greater than $1,000, the fee is $15. In a City Court, an individual filing a claim of $1,000 or less must pay a $15 fee. If the claim exceeds $1,000, the fee is $20. This amount must be paid at the time the lawsuit is filed.

A defendant being sued in Small Claims Court does not have to file a written answer. He or she may simply appear in court on the designated date to respond to the claim. However, a defendant may choose to file a counterclaim against the individual who initiated the lawsuit. In that case, the defendant must file a written answer within five days of receiving the plaintiff's claim. Lawsuits in Small Claims Court are typically decided by a judge, but the defendant has the option to request a jury trial. The request must be made at least one day prior to the court date.

A lease lasts for a "fixed term," a set amount of time that is typically one year. It ends when that period of time is up. At that point, the tenant has several different options: move out, renew the lease (but may do so only on consent of the landlord in apartments that are not covered by rent regulations), stay on as a month-to-month tenant with the landlord's approval, or -- if the tenant attempts to stay despite the landlord's wishes - - face eviction.

The procedures for renewing a lease vary, depending on whether the tenant lives in a rent regulated apartment. Tenants of non-rent regulated apartments may renew their leases only with the consent of their landlord. If a landlord does not agree to renew a lease, the tenant may be evicted at the end of the lease term.

However, some leases contain automatic renewal clauses. These leases automatically renew for another full term unless the tenant notifies the landlord that he or she does not want to stay. Sometimes tenants are not aware of the clause and risk being locked into a lease renewal. For this reason, New York law obligates a landlord to notify the tenant, in writing, about the clause 15 to 30 days before the tenant is required to notify the landlord of an intention not to renew the lease. General Obligations Law § 5-905.

Rent stabilized tenants have a right to a one or two year renewal lease, which must be on the same terms and conditions as the prior lease (although the landlord is typically able to raise the rent by a set amount). A landlord's acceptance of a rental subsidy is one such term which must be continued on a renewal lease.

Landlords of rent-regulated apartments may refuse to renew a lease only in certain circumstances, such as when the tenant is not using the premises as a primary residence. For New York City rent stabilized tenants, the landlord must give timely written notice to the tenant of the right to renewal of the lease as required by law. After the notice of renewal is given, the tenant has 60 days in which to accept. If the tenant does not accept the renewal offer within the prescribed time, the landlord may refuse to renew the lease and seek to evict the tenant through court proceedings. If the tenant accepts the renewal offer, the land- lord has 30 days to return the fully executed lease to the tenant. Until returned to the tenant, the lease is not effective, and therefore the rent increase portion need not be paid.

Tenants who do not have leases, either because the previous lease has expired or one was never signed, and pay rent on a monthly basis are called "month-to-month" tenants. In property without rent regulation, tenants who stay past the end of a lease are treated as month-to-month tenants if the landlord accepts a rental payment after the end of the lease. **Real Property Law § 232-c. **

A month-to-month tenancy in New York State may be terminated by either party by giving at least one month's notice before the expiration of the tenancy. For example, if the landlord wants the tenant to move out by March 1 and the rent is due on the first of each month, the landlord must give notice by January 31. In New York City, however, 30 days' notice is required, rather than the one month, state-wide rule.

The termination notice need not specify why the landlord seeks possession of the apartment, only that the landlord elects to terminate the tenancy and that refusal to vacate will lead to eviction proceedings. Such notice does not automatically allow the landlord to evict the tenant. A landlord may raise the rent of a month-to-month tenant with the consent of the tenant. If the tenant does not consent, however, the landlord can terminate the tenancy by giving appropriate notice. Real Property Law § 232-a; Real Property Law § 232-b.