Prohibits the collection of administration expenses by a landlord and provides for the tenant to collect all interest paid by the banking organization on a security deposit or advance when such is deposited into an interest bearing account.

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S514-2013 Actions

• Jan 9, 2013: REFERRED TO JUDICIARY

S514-2013 Memo

BILL NUMBER:S514

TITLE OF BILL:

An act
to amend the general obligations law, in relation to tenant security
deposits

PURPOSE:

Prohibits the collection of administration expenses by a landlord and
provides for the tenant to collect all interest paid on a security
deposit or advance.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends section 7-103 of the general obligations
law to remove the ability of a landlord to collect administration
expenses on a tenant's security deposit and allows for a tenant to
collect on all interest paid on the security deposit.

EXISTING LAW:

Currently a landlord is allowed to collect, as "administration
expenses" a sum equivalent to one per cent per annum upon a tenant's
security deposit.

JUSTIFICATION:

It is unjust for a landlord to have the ability to take one percent of
the interest compounded by a tenant's security deposit. The security
deposit is the tenant's money. Therefore it is only just that the
tenant be allowed to keep all of his or her interest from that deposit.

LEGISLATIVE HISTORY:

2007: S.3556 (Duane), Died in Judiciary
2008: S.3556 (Duane), Died in Judiciary
2009: S.3338 (Duane), Died in Judiciary
2010: S.3338 (Duane), Died in Judiciary

FISCAL IMPLICATIONS:

Minimal.

EFFECTIVE DATE:

This act will take effect on the first of January next succeeding
the date on which it shall become a law.

S514-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     514

                         2013-2014 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 9, 2013
                                 ___________

  Introduced by Sen. ESPAILLAT -- read twice and ordered printed, and when
    printed to be committed to the Committee on Judiciary

  AN ACT to amend the general obligations law, in relation to tenant secu-
    rity deposits

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. The section heading and subdivision 2 of section  7-103  of
  the  general  obligations law, the section heading as amended by chapter
  1009 of the laws of 1970 and subdivision 2 as amended by chapter 402  of
  the laws of 1979, are amended to read as follows:

    Money deposited or advanced for use or rental of real property; waiver
  void[; administration expenses].
    2.  Whenever the person receiving money so deposited or advanced shall
  deposit such money in a banking organization, such person shall thereup-
  on notify in writing each of the persons making such security deposit or
  advance, giving the name and address  of  the  banking  organization  in
  which  the  deposit  of  security  money is made, and the amount of such
  deposit. Deposits in a banking organization pursuant to  the  provisions
  of  this  subdivision  shall  be made in a banking organization having a
  place of business within the state. If the person depositing such  secu-
  rity  money  in a banking organization shall deposit same in an interest
  bearing account,[ he shall be entitled  to  receive,  as  administration
  expenses,  a  sum equivalent to one per cent per annum upon the security
  money so deposited, which shall be in lieu of all  other  administrative
  and custodial expenses. The balance of] the interest paid by the banking
  organization  shall  be  the  money  of the person making the deposit or
  advance and shall either be held in trust by the person with  whom  such
  deposit or advance shall be made, until repaid or applied for the use or
  rental of the leased premises, or annually paid to the person making the
  deposit of security money.
    S  2. This act shall take effect on the first of January next succeed-
  ing the date on which it shall have become a law.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD01949-01-3