Yes. In New York, a residential security deposit is capped at 1 month's rent, with seasonal rentals and owner-occupied co-ops excepted. The rule comes from N.Y. Gen. Oblig. Law § 7-108, which also requires you to return the deposit within 14 days after the tenant vacates, along with an itemized statement — and missing that deadline forfeits your right to keep any part of it. So the money you can collect up front is one month's rent as a deposit, plus rent itself; you can't stack a deposit and a separate "extra" deposit to get to two months.
What the one-month cap actually limits
The cap is tied to the monthly rent in the lease. If the rent is $1,600, the deposit ceiling is $1,600. The cap applies to the deposit as a whole, not to each label you put on it — so you can't call part of it a "pet deposit" and part of it a "damage deposit" and treat each as its own allowance. Whether a particular up-front charge counts as a security deposit at all (last month's rent paid in advance, key deposits, move-in fees) is governed by the statute, not by what the lease calls it, so read N.Y. Gen. Oblig. Law § 7-108 before you write any up-front charge into your lease, and check our summary of New York security deposit laws.
The practical effect is on cash at signing. Landlords who are used to asking for first month, last month, and a deposit have to rethink the number, because the deposit side of that stack is limited to one month's rent.
A worked example: a $1,600 two-bedroom
Say you rent a two-bedroom in New York for $1,600 a month, as a hypothetical. The lease runs July 1 through June 30 of the following year. Here's how the money works at each decision point.
Setting the move-in number
You'd like a cushion, so your first instinct is $1,600 rent + $1,600 deposit + $800 pet deposit + $1,600 last month's rent = $5,600. That number doesn't survive the cap. The deposit cannot exceed one month's rent, which is $1,600, and bolting a separate pet deposit onto it doesn't create extra room.
So you set move-in money at:
- First month's rent (July): $1,600
- Security deposit: $1,600
- Total due at signing: $3,200
If you're thinking about also collecting last month's rent in advance, don't guess — § 7-108 is what decides how prepaid rent interacts with the deposit cap. Our security deposit limit checker is a quick way to sanity-check the deposit figure before you put it in writing, and the deposit clause itself belongs in a written New York lease agreement that states the exact amount you took.
Documenting the unit before the tenant moves in
Because the cushion is capped at $1,600, documentation does the work the extra money would have done. Before handover on July 1, you walk the unit with the tenant, note the scuffed hallway paint and the chipped tile behind the stove, photograph every room including inside the oven and under the sinks, and both of you sign and date the checklist. Each of you keeps a copy. This is the record you'll compare against at move-out; without it, a deduction is one person's word against another's. Rentmark's move-in/move-out inspection checklists with photos keep that record attached to the lease instead of scattered across your phone.
Mid-lease: the rent goes up at renewal
In May, you offer a renewal at $1,700. The tenant accepts, starting July 1. The deposit on hand is $1,600. Whether you may collect the $100 difference to keep the deposit at one month's rent of the new amount — and the mechanics for doing so — is governed by § 7-108, so read it rather than assuming. If you do collect a top-up, do it in writing with its own receipt so the deposit ledger matches the lease.
Move-out and the 14-day clock
The tenant decides to leave at the end of the second year. They hand back the keys and vacate on June 30. Your deadline to return the deposit with an itemized statement is July 14.
On July 1 you inspect with the move-in photos open on your phone. You find:
- A cracked bathroom sink that is not in the move-in photos — repair invoice $240.
- Three unreturned keys — locksmith invoice $85.
- Hallway paint scuffs that were photographed and noted at move-in — no deduction.
- Worn carpet in the bedroom after two years of normal use — you leave this alone; what qualifies as a deductible condition versus ordinary wear is the statute's call, and we cover the recurring version of this fight in can a landlord keep a deposit for cleaning in New York.
Your math on a $1,700 deposit (assuming you topped it up at renewal):
| Item | Amount |
|---|---|
| Deposit held | $1,700.00 |
| Sink repair (invoice attached) | −$240.00 |
| Lock change, keys not returned (invoice attached) | −$85.00 |
| Balance returned to tenant | $1,375.00 |
On July 8 you mail the itemized statement with copies of both invoices and a check for $1,375, and you keep proof of mailing. You're inside the July 14 deadline. Had you sat on it past July 14, § 7-108 says missing the deadline forfeits your right to keep any part of the deposit — meaning the $325 in real, invoiced damage would have come out of your pocket instead.
If one fact changes
If the damage exceeds the deposit
Suppose the sink repair had been $2,100 instead of $240. The deposit is still capped at one month's rent, so it can only absorb what it can absorb. You'd still owe an itemized statement by July 14 showing the deposit fully applied and nothing returned. Pursuing the shortfall beyond the deposit is a separate matter from the deposit rules in § 7-108, and how you'd do that is outside what the deposit statute covers.
If the rental is seasonal or an owner-occupied co-op
The one-month cap carves out seasonal rentals and owner-occupied co-ops. If your unit is one of those, the cap analysis is different — but "excepted from the cap" is not the same as "no rules apply," so read N.Y. Gen. Oblig. Law § 7-108 for how the rest of the statute treats your situation rather than assuming you're free of all of it.
If you never put the deposit amount in writing
Change the scenario so there's no written lease, just a handshake and a Venmo transfer. You now have no agreed record of how much you hold, what condition the unit was in, or what the rent was — and every one of the move-out numbers above becomes contestable. A written lease with a clear deposit clause is the cheapest protection available; see how to write a rock-solid residential lease agreement for the clauses that matter.
Three habits that keep the cap from hurting you
- Write the deposit amount, in dollars, into the lease — and give a dated receipt for it.
- Photograph everything at move-in and move-out, with both parties signing the checklist. The capped deposit means your evidence has to be better than your cushion.
- Calendar the return date the day you get the keys back. Keys back June 30, statement and balance out by July 14. The deadline is the one part of this that has no judgment call in it.
This is general information, not legal advice. For anything specific to your unit or your tenant, read N.Y. Gen. Oblig. Law § 7-108 and talk to a New York attorney.
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