Second Security Deposit
I have been living in my current apartment for about 10 months and plan to renew my lease for another year. I received a letter from my landlord letting me know that my rent will increase by 4% and that I have to pay an additional $100 security deposit. This security deposit is in addition…
I have been living in my current apartment for about 10 months and plan to renew my lease for another year. I received a letter from my landlord letting me know that my rent will increase by 4% and that I have to pay an additional $100 security deposit. This security deposit is in addition to the deposit I paid when I started my lease last year and I have not caused problems or damage which would require additional “insurance”. This is the first time I have heard of anyone paying an additional security deposit to renew their lease – is this a common practice or can I negotiate to have this fee waived?
vinca, you (as many here) confuse letter of the law with intent. Whether or not I actually have a separate bank account (as required by the letter) or just pay my tenants the interest (intent) every year , which I do, only a lawyer could look askance at.
Same for the lead law…I know the apartment is clean (since it’s been partially renovated and repainted twice) but I can’t “prove” it per law.
The security deposit should match your monthly rental payment.
I have rented many apaprtments and no one ever increased my security deposit!
I agree that it’s normal, though clearly it’s not required and not always done by smaller landlords. For rent regulated apartments, there’s a lease rider that specifies these increases and accompanying notices. CMU, I know you fancy yourself a defender of tenants, but also noticed you recently covered yourself with “only joking” after railing against a landlord’s responsibility concerning the lead law, or whether you’d rent to a family or not. Since you’re asking whether other landlords meet their obligation re: interest, please let us know whether *you*
co-mingle funds and/or pay interest, too.
CMU – where did you get 4% from. If this would be true I would love to know which banks give this type of interest.
FYI:
The following information is from the Attorney General’s “Tenant’s Rights Guide”:
Landlords, regardless of the number of units in the building must treat the deposits as trust funds belonging to their tenants and they may not co-mingle deposits with their own money. Landlords of buildings with six or more apartments must put all security deposits in New York bank accounts earning interest at the prevailing rate. Each tenant must be informed in writing of the bank’s name and address and the amount of the deposit. Landlords are entitled to annual administrative expenses of 1% of the deposit. All other interest earned on the deposits belong to the tenants. Tenants must be given the option of having this interest paid to them annually, applied to rent, or paid at the end of the lease term. If the building has fewer than six apartments, a landlord who voluntarily places the security deposits in an interest bearing account must also follow these rules.
For example: A tenant pays a security deposit of $400.00. The landlord places the deposit in an interest bearing account paying 2.5%. At the end of the year the account will have earned interest of $10.00. The tenant is entitled to $6.00 and the land lord may retain $4.00, 1% of the deposit, as an administrative fee.
When I lived in Bklyn I was never asked to give additional security deposit when my rent increased. I was mostly in apartments in a private homes (3-4 family) not large buildings.
When we moved over to Jersey City (large building) it was included in the wording of the lease that with the annual increases we’d have to pony up additional security deposit. I don’t know if this factors into the equation at all but thought I’d mention it since you stated your increase as a percentage but, all buildings in JC with more than 4 units are rent stabilized. Does that change anything? I don’t know.
Owning and renting apt is business and should be conducted as such. Rent goes up so do the deposits. We are talking $100 not a $1000 here. What is a big deal since tenant gets it back anyhow if all is fine.
I’ve never asked this either. otoh, I only raise tenant’s rents every 3-4 years.
jas1: Incidentally, the landlord must pay iirc 4% interest on your deposit/last month’s rent annually…does he discharge that responsibility or it only one way?
Hey I just posted and am so surprised to see other people posting that this is normal! I have been on both ends of this landlord-tenant relationship for many years now, and have never seen such a thing. My own rents as a tenant have risen more times than I can count and I have never been asked for more security deposit.
DIBS, others, why do this?