Can Your Security Deposit Cover Your Last Month’s Rent in New York?
It’s a common question for tenants nearing the end of their lease: can I simply use my security deposit to pay for the final month’s rent? It seems logical. The money is already with the landlord, so why go through the hassle of another rent payment only to have the deposit returned later?
However, in New York State, the answer is a firm no. Tenants cannot legally use their security deposit to cover the last month’s rent. While it might seem convenient, nearly all lease agreements in New York explicitly prohibit tenants from withholding rent and applying the security deposit as a credit. Even if your lease doesn’t explicitly state this, the fundamental purpose of a security deposit is not to serve as prepaid rent.
➡️ For more on how security deposits work in NYC commercial leases, check out Security Deposit in a NYC Commercial Office Lease: What You Need to Know.
New York’s Housing Stability and Tenant Protection Act of 2019 clearly outlines the specific purposes of a security deposit. It is intended to protect landlords against:
Unpaid rent: This refers to rent that becomes due during the lease term, not the final month’s payment.
Damage beyond normal wear and tear: This covers any significant damage to the property caused by the tenant.
Noncompliance with lease obligations: This could include costs incurred by the landlord due to the tenant’s failure to uphold the terms of the lease.
Using the security deposit for the last month’s rent undermines its core function. It leaves the landlord without financial protection against potential damages or other charges that might surface after you move out. If the deposit has already been used for rent, the landlord has no recourse to cover these unexpected costs.
➡️ For details on how landlords manage risks like unpaid rent or damages, explore The Good Guy Guarantee NYC: What You Need to Know.
Beyond the legal and contractual aspects, attempting to use your security deposit for rent can also negatively impact your relationship with your landlord. As you prepare to move out, you’ll likely need their cooperation, and a positive landlord reference can be invaluable when seeking future leases. Creating friction over the security deposit is simply not a good approach.
➡️ For tips on maintaining positive tenant-landlord relationships, read Should a Company Hire an Exclusive Broker?.
For any lease related requestions please feel free to contact me at
Paul Walker
212-984-7117