Bill Text: NY A00629 | 2025-2026 | General Assembly | Introduced

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Bill Title: Relates to establishing the tenancy deposit protection program; requires the commissioner of housing and community renewal to establish a program to hold security deposits in third-party accounts and create a dispute resolution process regarding the withholding of security deposits.

Spectrum: Slight Partisan Bill (Democrat 5-2)

Status: (Introduced) 2025-01-08 - referred to housing [A00629 Detail]

Download: New_York-2025-A00629-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                           629

                               2025-2026 Regular Sessions

                   IN ASSEMBLY

                                       (Prefiled)

                                     January 8, 2025
                                       ___________

        Introduced  by  M.  of A. ROSENTHAL, SIMON, COLTON, CRUZ, RAGA -- Multi-
          Sponsored by -- M.  of  A.  MANKTELOW,  McDONOUGH  --  read  once  and
          referred to the Committee on Housing

        AN  ACT to amend the public housing law and the general obligations law,
          in relation to establishing the tenancy deposit protection program

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subdivision  1 of section 14 of the public housing law is
     2  amended by adding a new paragraph (y) to read as follows:
     3    (y) administer the tenancy  deposit  protection  program  pursuant  to
     4  section 7-103 of the general obligations law.
     5    § 2. Section 7-103 of the general obligations law, as amended by chap-
     6  ter 1009 of the laws of 1970, subdivisions 2 and 2-a as amended by chap-
     7  ter 402 of the laws of 1979, is amended to read as follows:
     8    § 7-103. Money deposited or advanced for use or rental of real proper-
     9  ty;  [waiver  void;  administration expenses] tenancy deposit protection
    10  program. 1. [Whenever money shall be deposited or advanced on a contract
    11  or license agreement for the use or rental of real property as  security
    12  for  performance  of  the  contract  or  agreement  or  to be applied to
    13  payments upon such contract or agreement  when  due,  such  money,  with
    14  interest  accruing  thereon,  if  any, until repaid or so applied, shall
    15  continue to be the money of the person making such  deposit  or  advance
    16  and  shall  be  held  in  trust  by the person with whom such deposit or
    17  advance shall be made and shall not be mingled with the personal  moneys
    18  or become an asset of the person receiving the same, but may be disposed
    19  of  as provided in section 7-105 of this chapter.] There shall be estab-
    20  lished within the division of housing and community  renewal  a  tenancy
    21  deposit protection program.
    22    2. [Whenever the person receiving money so deposited or advanced shall
    23  deposit such money in a banking organization, such person shall thereup-
    24  on notify in writing each of the persons making such security deposit or
    25  advance,  giving  the  name  and  address of the banking organization in
    26  which the deposit of security money is made,  and  the  amount  of  such

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02218-01-5
        A. 629                              2

     1  deposit.  Deposits  in a banking organization pursuant to the provisions
     2  of this subdivision shall be made in a  banking  organization  having  a
     3  place  of business within the state. If the person depositing such secu-
     4  rity  money  in a banking organization shall deposit same in an interest
     5  bearing account, he shall be  entitled  to  receive,  as  administration
     6  expenses,  a  sum equivalent to one per cent per annum upon the security
     7  money so deposited, which shall be in lieu of all  other  administrative
     8  and  custodial expenses. The balance of the interest paid by the banking
     9  organization shall be the money of the  person  making  the  deposit  or
    10  advance  and  shall either be held in trust by the person with whom such
    11  deposit or advance shall be made, until repaid or applied for the use or
    12  rental of the leased premises, or annually paid to the person making the
    13  deposit of security money.
    14    2-a. Whenever the money so deposited or advanced is for the rental  of
    15  property  containing  six  or  more  family  dwelling  units, the person
    16  receiving such money shall, subject to the provisions of  this  section,
    17  deposit  it  in  an  interest  bearing account in a banking organization
    18  within the state which account shall earn interest at a rate which shall
    19  be the prevailing rate earned by other such deposits made  with  banking
    20  organizations in such area.
    21    2-b.  In the event that a lease terminates other than at the time that
    22  a banking organization in such area regularly pays interest, the  person
    23  depositing  such security money shall pay over to his tenant such inter-
    24  est as he is able to collect at the date  of  such  lease  termination.]
    25  Such program shall:
    26    (a)  include  a system where tenant security deposits or advances on a
    27  contract or agreement for the use or rental of real property are held by
    28  a third-party custodian and arbiter, with interest accruing thereon;
    29    (b) require landlords to place a tenant's security deposit or  advance
    30  in such system if a security deposit or advance is received;
    31    (c) include a process for returning the security deposit or advance to
    32  the tenant;
    33    (d) require that if a landlord wishes to withhold such security depos-
    34  it  or  advance,  the  landlord  shall make an agreement with the tenant
    35  specifying the amount of money to be withheld and the reasons  for  such
    36  withholding;
    37    (e)  establish  a dispute resolution service for disagreements arising
    38  over the withholding of a security deposit or advance to be provided  at
    39  no cost to the landlord and tenant;
    40    (f)  require that both parties agree prior to using the dispute resol-
    41  ution service that the decision of such service is binding; and
    42    (g) include any other  regulations  as  determined  necessary  by  the
    43  commissioner of housing and community renewal.
    44    2-a.  Any  person  who violates the requirement specified in paragraph
    45  (b) of subdivision two of this section shall be punished by a civil fine
    46  of up to fifteen percent of the annual rent under such contract.
    47    3. Any provision of such a contract or agreement whereby a person  who
    48  so  deposits  or  advances money waives any provision of this section is
    49  absolutely void.
    50    4. The term "real property" as used in this section is co-extensive in
    51  meaning with lands, tenements and hereditaments.
    52    § 3. This act shall take effect on the one hundred twentieth day after
    53  it shall have become a law. Effective immediately, the addition,  amend-
    54  ment and/or repeal of any rule or regulation necessary for the implemen-
    55  tation  of  this act on its effective date are authorized to be made and
    56  completed on or before such effective date.