By Jay Romano
Q I moved out of a building in Brooklyn two years ago, and the owner has not yet returned my security deposit. Even though two other names were on the lease in addition to mine, the whole deposit came from me. Now only one of the original lease signers remains in the apartment. But the owner says he will not refund my deposit until the apartment is vacated.
I checked with the bank where the deposit was held and found out that the check was not deposited into a separate security account, but into the landlord's general business account. I also understand the deposit should be earning interest. I've heard that since the building has six apartments, the landlord should return my deposit immediately. Is this true? Should I sue?
A "Since a landlord is under no legal obligation to return the deposit until such time as the lease expires and all occupants have vacated the space," said Lucas Ferrara, a Manhattan real estate lawyer, "the letter writer's landlord generally may rightfully retain the deposit until the apartment is vacated." He added that once all the occupants have moved out, the owner may then use the funds to offset any tenant-caused damage -- other than ordinary wear and tear -- and any balance must be refunded.
However, Mr. Ferrara said, because a security deposit is the tenant's property, a landlord is prohibited from combining the deposit money with his own personal funds unless a default occurs in the lease. He added that when a building contains six or more apartments, the security deposit is to be kept in an interest-bearing account in a New York State bank. So if the landlord has mishandled the security deposit, the tenant may be entitled to an immediate refund. If the landlord unreasonably refuses to return all, or part, of a security deposit, the tenant may file a complaint with the state attorney general's office or sue the landlord in small-claims court.