Follow HSTPA Security Deposit Rules to Minimize Consumer Fraud Complaints
At the beginning of March, to kick off National Consumer Protection Week, New York Attorney General Letitia James released the top 10 consumer fraud complaints her office received in 2019. After analyzing all consumer complaints received statewide throughout 2019, the AG’s office found that landlord/tenant disputes ranked fourth, with 1,910 complaints. These complaints included disputes over security deposit releases and tenant harassment.
With new rights and protections for tenants implemented by the Housing Stability and Tenant Protection Act (HSTPA), more tenants may feel emboldened to file a “Tenant’s Complaint of Rent and/or Other Specific Overcharges in a Rent Stabilized Apartment” (DHCR Form RA-89) with the DHCR or contact the Consumer Frauds and Protection Bureau of the NYS Attorney General’s Office if they feel an owner isn’t complying with HSTPA.
Here are two points to follow with regard to your security deposit policy as a result of HSTPA.
One month’s rent. A security deposit is money that a tenant, his guarantor, or other third-party deposits with the owner for the repair of any damages to the apartment for which the tenant is responsible. The HSTPA specifically limits security deposits to one month’s rent.
Fourteen days to process security deposit returns. The HSTPA states that within 14 days after a tenant has vacated, the owner has to provide the tenant with an itemized statement indicating what repairs the security deposit is being used for, if that applies, and return the rest of the funds. If the owner doesn’t provide the statement and deposit in 14 days, the owner forfeits any right to retain any portion of the deposit. And if a court finds that it was a willful violation, an owner could be liable for damages up to twice the amount of the deposit.