Legal Question in Landlord & Tenant Law in New York
Interest paid on security deposit
In NY state, are we required to pay a vacating tenant (leaving on good terms) interest earned on his security deposit and if so, at what rate?
Thank you.
Asked on 8/17/05, 4:47 pm
2 Answers from Attorneys
Stephen Loeb
Law Office of Stephen R. Loeb
Re: Interest paid on security deposit
Yes. The law requires you to keep security deposits in separate interest bearing accounts, you should turn over the funds in the accountwith the accumulated interest to the tenant.
Answered on 8/17/05, 4:58 pm
John Friedman
Law Office of John K. Friedman
Re: Interest paid on security deposit
To add my colleague's correct answer, the interest should be paid over to the tenant on an annual basis. You should provide each tenant with a 1099-INT form so they can report the interest income and you can deduct it from your own earnings, too.
Answered on 8/17/05, 5:06 pm
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