NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10984
SPONSOR: Rosenthal TITLE OF BILL:
An act to amend the general obligations law, in relation to interest on
money deposited or advanced for the rental of property from an aggregate
portfolio of six or more rental units
PURPOSE:
This bill will expand the number of renters entitled to receive interest
on their security deposits.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends subdivision 2-a of section 7-103 of the general obli-
gations law.
Section two establishes the effective date.
JUSTIFICATION:
Landlords typically require tenants to pay a security deposit to cover
the cost of potential damages or unpaid rent. Those deposits are typi-
cally held in interest-bearing accounts by the landlord, and when the
tenant moves out, are returned to them.
However, current state law only requires landlords of buildings with six
or more units to deposit these funds in interest bearing accounts. Other
property owners, who may own several small properties all below the
six-unit threshold, are therefore not required to collect and pass along
any interest accrued from a tenant's security deposit. These property
owners may invest these deposits in interest bearing accounts without
ever having to return the earnings to tenants, as they would be required
to if those tenants lived in a larger building.
This legislation would amend our existing security deposit law, applying
it to property owners with six or more units in total.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
90 days.
STATE OF NEW YORK
________________________________________________________________________
10984
IN ASSEMBLY
April 14, 2026
___________
Introduced by M. of A. ROSENTHAL -- read once and referred to the
Committee on Judiciary
AN ACT to amend the general obligations law, in relation to interest on
money deposited or advanced for the rental of property from an aggre-
gate portfolio of six or more rental units
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 2-a of section 7-103 of the general obligations
2 law, as amended by chapter 402 of the laws of 1979, is amended to read
3 as follows:
4 2-a. Whenever the money so deposited or advanced is for the rental of
5 property containing six or more family dwelling units or for the rental
6 of property which is included in an aggregate portfolio of six or more
7 units, the person receiving such money shall, subject to the provisions
8 of this section, deposit it in an interest bearing account in a banking
9 organization within the state which account shall earn interest at a
10 rate which shall be the prevailing rate earned by other such deposits
11 made with banking organizations in such area.
12 § 2. This act shall take effect on the ninetieth day after it shall
13 have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15462-01-6
