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The Proper Use of a Security Deposit – MICHELLE’S MONDAY MANDAMUS!

September 3, 2016:  This Q&A post originally appeared on the LandlordsNY blog, where Michelle Maratto Itkowitz is the "Legal Expert".

Hi, Michelle here.  I am the LandlordsNY “Legal Expert” (you can see my profile on the expert’s page).  My goal is to post in the blog all of the questions I get from LandlordsNY members (keeping the member anonymous) and my answers thereto, when I think that such questions and answers would be of interest to other people.  Let me know if this is helpful.  These questions are excellent, keep them coming.

Question:  “I offered my tenant a rent increase for an additional year with a substantial rent increase.  The tenant feels the increase is more than she can handle and she is leaving.  The tenant suggested that I use her security deposit for the last month’s rent.  I refused.  I believe there will be the need for extensive repair and fumigation when this tenant leaves, as the tenant has any number of pets and the use of my back yard for the animals care.  What are my options?”

Answer:

I am going to assume that the apartment that you are asking about is NOT Rent Stabilized.  If it was Rent Stabilized, you would be legally obligated to renew the lease and only at Rent Guidelines Board proscribed levels.  Therefore, I am going to assume that this is a free-market apartment.

I have two pieces of advice here.

Never apply security to rent.  Security is security.  If you let tenant live out the security as the last month’s rent, then what happens if you go in there and the place has serious damage and you would have wanted to retain the security?

Also, if you are going to evict them, to save yourself a lot of time and legal fees, do NOT take rent past the expiration date in the lease.  A month-to-month tenancy is automatically created when a tenant whose term is longer than one month holds over after the expiration of the term and the landlord accepts rent after the expiration of the term.  Real Property Law (“RPL”) § 232-c; Zobe, LLC v. United N. Bancshares, Ltd., 251 A.D.2d 237 (1st Dept. 1998).  Thereafter, once you create the month-to-month tenancy, you must give the tenant an extra thirty days’ notice before starting a holdover case.  A landlord may terminate a month-to-month tenancy by service on the tenant of a written thirty-day notice of termination.  RPL § 232-a.

Finally, I am obligated to say that this email is for general informational purposes only, does not constitute legal advice, and does not create an attorney and client relationship between us or between you and LandlordsNY.
Let me know if you need anything else.
Michelle Maratto Itkowitz
Itkowitz PLLC
26 Broadway, 21st Floor
New York, New York 10004
(646) 822-1805

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