Hello, I just recently learned that, when entering into a rent-stabilized apartment, no more than 1 month's rent is allowed to be collected when you move in/sign the lease. Now, I have been living in this rent-stabilized apartment for a little over a year, and when I took the place, I had no idea of this rule. I was charged TWO months security. On the lease itself (seems like a standard... [more]
Hello,
I just recently learned that, when entering into a rent-stabilized apartment, no more than 1 month's rent is allowed to be collected when you move in/sign the lease. Now, I have been living in this rent-stabilized apartment for a little over a year, and when I took the place, I had no idea of this rule. I was charged TWO months security. On the lease itself (seems like a standard rent-stabilized lease), under the paragraph where it says "SECURITY DEPOSITS" the landlord took a pen and crossed out the word "one" and wrote "two" above it, for the # of months to be collected. Of course, not knowing about this rule at the time, I signed the lease. (It was a one year, I just renewed for another year, same rent). My question is: if he wrote that in, and I signed it, does that make it legal? It seems like no, since it's still against the law, right? I mean, he can't write in just anything he wants, like "you must steal a car once a month to live here" and someone signs it and it be legal, right? He still has to abide by the laws, right? Do I have a leg to stand on?
If this is correct, and I am owed that 1 month's security back, how do I go about doing so? (Other than just writing a letter and saying, "can I please have my illegally-obtained security back?"). This is a small building with an individual owner/landlord.
Thanks for any help.
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
It is not legal to take more than 1 month.
How many units is this building? Has the landlord advised you where the money is being kept in escrow?
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Response by jim_hones10
over 12 years ago
Posts: 3413
Member since: Jan 2010
did you use an agent?
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
Hmm, pay an agent 1.5 months rent cash and in exchange he'll save you from putting an extra months rent into escrow.
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Response by UE98
over 12 years ago
Posts: 100
Member since: Jan 2013
There are 8 units in the building (maybe 9??)
The owner has not told me where the money is being kept. In fact, if I remember correctly, shortly after I moved in, I believe I saw a debit on my account for the security deposit amount, which means he deposited it or cashed it (also illegal?).
Yes, I did use an agent. Evidently he didn't know about this rule either. Although I don't see what this has to do with my situation now.
huntersburg, I don't understand your last comment. What does an agent have to do with anything at this stage? The deposit has been handed over, and rent does not go into escrow. I am interested in getting my portion of the SD back, if legally entitled. That's all.
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Response by jim_hones10
over 12 years ago
Posts: 3413
Member since: Jan 2010
i'd leverage that fact that the agent either wittingly or stupidly allowed this to lean on the landlord if needed to get a portion of the security deposit back. that's why.
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Response by alanhart
over 12 years ago
Posts: 12397
Member since: Feb 2007
Your renewal had no increase, leading me to believe you're paying a preferential rent. Practically speaking: quibble about deposit amount, and chances are the preference will evaporate at the next renewal. I'm just saying.
And even more so if a scumbag bottom-feeding rental agent is involved. Much worse still if it's bottom-of-the-barrel Citihabit.
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Response by gcondo
over 12 years ago
Posts: 1111
Member since: Feb 2009
the landlord, owning a building with 5 or more units, needs to keep the security in a separate, interest bearing NY-state bank account. You should have been assigned to the account and the interest would appear on a 1099, which you would receive each year. The landlord cannot co-mingle or use the funds. this is without a doubt an issue for the landlord with probably treble damages, if you want to go there.
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
>huntersburg, I don't understand your last comment.
sry it was actually directed at super-agent Jim Hores.
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Response by UE98
over 12 years ago
Posts: 100
Member since: Jan 2013
Um, okaay.... How about before we get into any kind of "leverage" sort of talk, how about just trying to determine if this altered lease is actually legal in regards to the security deposit, and if 2 months are allowed as a result of me signing it. If not, then it's against the law, and we have an answer.
alanhart & gcondo, thanks for the responses.
I am paying market rent, but the rent is below the maximum allowed by RS guidelines (it is a fairly newish building).
I agree with you, that making this into an issue right now might not be the best idea. However, making this into an issue when I know I will not renew, seems like it would DEFINITELY be the right idea.
The agent was not with CitiHabitats, but with another, smaller agency.
I don't believe I will be receiving a 1099 (or related payments), as the security deposit was probably placed in a regular (personal?) checking account, or something similar. As such it is bearing hardly any interest, (less than a percent, most likely). This coupled with the 1% that the owner is allowed to deduct seems to make it a non-issue.
That being said, I don't know what kind of or where the account is. Is there any way to find this out? Also, how would I be able to research the exact damages allowable from these illegal behaviors (double, triple...?).
huntersburg, yes, I see, I am beginning to get the picture...
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
Rent stabilized lease - 1 month security allowed by law. Funds can not be comingled with the landlord's personal funds.
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Response by inonada
over 12 years ago
Posts: 7952
Member since: Oct 2008
On most of these types of thing for NY RE, the law is written in a way that says "no contract may waive this provision". Not sure for this one
Regardless of any contract, agreement, lease or other obligation heretofore or hereafter entered into, no owner, in addition to the authorized collection of rent, shall demand, receive or retain a security deposit or advance payment for or in connection with the use or occupancy of a housing accommodation which exceeds the rent for one month;...
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Response by gcondo
over 12 years ago
Posts: 1111
Member since: Feb 2009
Google is your best friend. But this sounds like an easy one, again, if you want to go there. you could always talk to a lawyer, free consultation type of thing.
The only thing worse than a bad tenant is a bad landlord. Based on what you are saying, he is clearly not handling things appropriately, but that does not necessarily mean you should break his balls. You probably have leverage though, if and when the time comes when you need it. If the landlord treats you unfairly, you have a clear remedy. Read up on your situation.
If you want to handle things now a bit, a friendly-written certified letter (return receipt) to your landlord asking for the 1 month back, and information on the account, etc, etc, would lay the groundwork for later action if you need to go there. Of course, this may change the nature of your tenant-landlord relationship... Make sure you keep your records straight.
Also, the issue with the 1099 and the interest and the 1% administration fee is not that you are not getting money - it is more that the landlord is not following the rules.
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Response by inonada
over 12 years ago
Posts: 7952
Member since: Oct 2008
The law stating that the deposit may not be co-mingled with personal funds, the deposit must be placed in bank account when there are 6+ units, and that any waiver of such provisions are void:
There is no such thing as a friendly letter sent by certified mail. Frankly, there is hardly such a thing these days as a friendly letter, given that no one writes letters.
Whenever I used to get a return receipt letter, I would just not receive it. After about 10 days, it goes back to the frustrated sender.
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Response by inonada
over 12 years ago
Posts: 7952
Member since: Oct 2008
This link that gcondo posted contains a very thorough case law on the issue that will answer lots of your questions:
Thank you for the very good links. I didn't read every "legaleaze" word, but it definitely seems like this is a pretty cut-and-dry case: it's against the law, regardless of the signed altered lease. I even found out what I have to do, fill out form RA-89, and the DHCR handles the rest.
gcondo, how would I figure out how much damages I am entitled to? Is this written somewhere? Or would this definitely require a lawyer to figure out?
And huntersburg brings up a good point. How do I deal with someone who doesn't accept the mail? How do I retain any evidence (or, even just get my point across?)
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Response by inonada
over 12 years ago
Posts: 7952
Member since: Oct 2008
Given that you likely send rent by mail, it should be pretty easy in this instance.
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Response by huntersburg
over 12 years ago
Posts: 11329
Member since: Nov 2010
>And huntersburg brings up a good point. How do I deal with someone who doesn't accept the mail? How do I retain any evidence (or, even just get my point across?)
Not accepting mail only applies to return receipt.
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Response by E24
over 12 years ago
Posts: 46
Member since: Oct 2011
"I moved in, I believe I saw a debit on my account for the security deposit amount, which means he deposited it or cashed it (also illegal?)."
So you expect a landlord to hold an uncashed check for years and hope that the account is still active and the check doesn't bounce if/when he needs to take money out of it to pay for damages when you move out?
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Response by UE98
over 12 years ago
Posts: 100
Member since: Jan 2013
Oh, I meant a return receipt/registered/certified mail, like huntersburg said. All correspondence concerning a legal matter should be mailed this way -- what to do then if he returns/doesn't open up anything "official looking"?
E24, apparently, if you had read the whole thread and supporting information, it has been learned that this security deposit, like all security deposits collected for RS apartments, must be put in a separate, US-based account and not co-mingle with other finances, and the renter must be informed of this account (institution, address, etc.).
Which brings me to another question: aside from just asking my landlord, is there any other way to get this information about where the security deposit was deposited?
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Response by gcondo
over 12 years ago
Posts: 1111
Member since: Feb 2009
UE98, what matters is that the landlord did not tell you where it is deposited, and whether or not he can prove he told you, prove he holds it in a separate account, etc etc - the burden will be on him. So, it is useless for you (and impossible) to try to figure out independently where the money is.
You should go talk to a couple of RE lawyers, "free consultation" to answer your questions.
It is not legal to take more than 1 month.
How many units is this building? Has the landlord advised you where the money is being kept in escrow?
did you use an agent?
Hmm, pay an agent 1.5 months rent cash and in exchange he'll save you from putting an extra months rent into escrow.
There are 8 units in the building (maybe 9??)
The owner has not told me where the money is being kept. In fact, if I remember correctly, shortly after I moved in, I believe I saw a debit on my account for the security deposit amount, which means he deposited it or cashed it (also illegal?).
Yes, I did use an agent. Evidently he didn't know about this rule either. Although I don't see what this has to do with my situation now.
huntersburg, I don't understand your last comment. What does an agent have to do with anything at this stage? The deposit has been handed over, and rent does not go into escrow. I am interested in getting my portion of the SD back, if legally entitled. That's all.
i'd leverage that fact that the agent either wittingly or stupidly allowed this to lean on the landlord if needed to get a portion of the security deposit back. that's why.
Your renewal had no increase, leading me to believe you're paying a preferential rent. Practically speaking: quibble about deposit amount, and chances are the preference will evaporate at the next renewal. I'm just saying.
And even more so if a scumbag bottom-feeding rental agent is involved. Much worse still if it's bottom-of-the-barrel Citihabit.
the landlord, owning a building with 5 or more units, needs to keep the security in a separate, interest bearing NY-state bank account. You should have been assigned to the account and the interest would appear on a 1099, which you would receive each year. The landlord cannot co-mingle or use the funds. this is without a doubt an issue for the landlord with probably treble damages, if you want to go there.
>huntersburg, I don't understand your last comment.
sry it was actually directed at super-agent Jim Hores.
Um, okaay.... How about before we get into any kind of "leverage" sort of talk, how about just trying to determine if this altered lease is actually legal in regards to the security deposit, and if 2 months are allowed as a result of me signing it. If not, then it's against the law, and we have an answer.
alanhart & gcondo, thanks for the responses.
I am paying market rent, but the rent is below the maximum allowed by RS guidelines (it is a fairly newish building).
I agree with you, that making this into an issue right now might not be the best idea. However, making this into an issue when I know I will not renew, seems like it would DEFINITELY be the right idea.
The agent was not with CitiHabitats, but with another, smaller agency.
I don't believe I will be receiving a 1099 (or related payments), as the security deposit was probably placed in a regular (personal?) checking account, or something similar. As such it is bearing hardly any interest, (less than a percent, most likely). This coupled with the 1% that the owner is allowed to deduct seems to make it a non-issue.
That being said, I don't know what kind of or where the account is. Is there any way to find this out? Also, how would I be able to research the exact damages allowable from these illegal behaviors (double, triple...?).
huntersburg, yes, I see, I am beginning to get the picture...
Rent stabilized lease - 1 month security allowed by law. Funds can not be comingled with the landlord's personal funds.
On most of these types of thing for NY RE, the law is written in a way that says "no contract may waive this provision". Not sure for this one
http://metcouncilonhousing.org/help_and_answers/rent_stabilization_code
Regardless of any contract, agreement, lease or other obligation heretofore or hereafter entered into, no owner, in addition to the authorized collection of rent, shall demand, receive or retain a security deposit or advance payment for or in connection with the use or occupancy of a housing accommodation which exceeds the rent for one month;...
Google is your best friend. But this sounds like an easy one, again, if you want to go there. you could always talk to a lawyer, free consultation type of thing.
The only thing worse than a bad tenant is a bad landlord. Based on what you are saying, he is clearly not handling things appropriately, but that does not necessarily mean you should break his balls. You probably have leverage though, if and when the time comes when you need it. If the landlord treats you unfairly, you have a clear remedy. Read up on your situation.
If you want to handle things now a bit, a friendly-written certified letter (return receipt) to your landlord asking for the 1 month back, and information on the account, etc, etc, would lay the groundwork for later action if you need to go there. Of course, this may change the nature of your tenant-landlord relationship... Make sure you keep your records straight.
http://www.housingnyc.com/html/resources/attygenguide.html#6 --- see Rent Security Deposits
some interesting reading:
http://www.tenant.net/phpBB2/viewtopic.php?t=4902
Also, the issue with the 1099 and the interest and the 1% administration fee is not that you are not getting money - it is more that the landlord is not following the rules.
The law stating that the deposit may not be co-mingled with personal funds, the deposit must be placed in bank account when there are 6+ units, and that any waiver of such provisions are void:
http://codes.lp.findlaw.com/nycode/GOB/7/1/7-103
There is no such thing as a friendly letter sent by certified mail. Frankly, there is hardly such a thing these days as a friendly letter, given that no one writes letters.
Whenever I used to get a return receipt letter, I would just not receive it. After about 10 days, it goes back to the frustrated sender.
This link that gcondo posted contains a very thorough case law on the issue that will answer lots of your questions:
http://www.tenant.net/phpBB2/viewtopic.php?t=4902
lol huntersburg... I guess I meant "above-board".
Thank you for the very good links. I didn't read every "legaleaze" word, but it definitely seems like this is a pretty cut-and-dry case: it's against the law, regardless of the signed altered lease. I even found out what I have to do, fill out form RA-89, and the DHCR handles the rest.
gcondo, how would I figure out how much damages I am entitled to? Is this written somewhere? Or would this definitely require a lawyer to figure out?
And huntersburg brings up a good point. How do I deal with someone who doesn't accept the mail? How do I retain any evidence (or, even just get my point across?)
Given that you likely send rent by mail, it should be pretty easy in this instance.
>And huntersburg brings up a good point. How do I deal with someone who doesn't accept the mail? How do I retain any evidence (or, even just get my point across?)
Not accepting mail only applies to return receipt.
"I moved in, I believe I saw a debit on my account for the security deposit amount, which means he deposited it or cashed it (also illegal?)."
So you expect a landlord to hold an uncashed check for years and hope that the account is still active and the check doesn't bounce if/when he needs to take money out of it to pay for damages when you move out?
Oh, I meant a return receipt/registered/certified mail, like huntersburg said. All correspondence concerning a legal matter should be mailed this way -- what to do then if he returns/doesn't open up anything "official looking"?
E24, apparently, if you had read the whole thread and supporting information, it has been learned that this security deposit, like all security deposits collected for RS apartments, must be put in a separate, US-based account and not co-mingle with other finances, and the renter must be informed of this account (institution, address, etc.).
Which brings me to another question: aside from just asking my landlord, is there any other way to get this information about where the security deposit was deposited?
UE98, what matters is that the landlord did not tell you where it is deposited, and whether or not he can prove he told you, prove he holds it in a separate account, etc etc - the burden will be on him. So, it is useless for you (and impossible) to try to figure out independently where the money is.
You should go talk to a couple of RE lawyers, "free consultation" to answer your questions.