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Can i sue my commercial landlord for not putting my security deposit in a interest bearing account,and how can i prove it

Buffalo, NY |

i recently move out of a commercial,after returning for final inspection,they said they already inspected it themselves i told them i needed to be there to,they said we assumed you would just leave keys and locked doors,i said o.k. well was the cleaning to your satisfaction,she hemmed and hawed and said not really, you could feel the hostility in the air so i just said fine and left,so i know it's gonna be a court thing,and i know he didn't put money in a account,but how can i prove it?

I SHOULD ALSO ADD THIS IS A MONTH TO MONTH LEASE,NO FORMAL SIGNED LEASE,THIS WAS AN AUTOMOTIVE REPAIR SHOP,I WAS IN BUSINESS THERE FOR 7 AND A HALF YEARS. WE'RE TALKING ABOUT A $1400 SECURITY DEPOSIT.LANDLORD IS REFUSING TO RETURN SECURITY DEPOSIT,INSTEAD USING MY MONEY FOR PAINTING AND REMODELING.I GUESS MY QUESTION IS,WHAT IF LANDLORD DID NOT DEPOSIT SECURITY IN ANY KIND OF ACCOUNT,WOULD HE BE FINED,OR WOULD THIS WORK IN MY FAVOR AT A COURT HEARING.IF I WANTED TO HIRE A LAWYER TO LITIGATE THIS CASE,HOW MUCH WOULD SOMETHING LIKE THIS COST? I AM A CORPORATION,SO WILL I NEED A LAWYER ANYWAY?

Attorney Answers 3


  1. Best answer

    Dear Buffalo Tenant:

    New York State law does not require the landlord deposit the security deposit of a commercial tenant into an interest earning account. But if the security is deposited into an interest earning account the tenant is entitled to the interest less the statutory allowed charge for the landlord to administer the account.

    Within the first thirty days of your tenancy 7 years ago the landlord should have informed you of the name and the location of the bank where the security was deposited.

    If you received the security deposit after the inspection launching a lawsuit for the interest that may have been earned if the security was placed into an interest earning account may not be cost efficient, as interest rates are notoriously low.

    See: New York G.O.L. Section 7-103:

    ">>>2. Whenever the person receiving money so deposited or advanced shall deposit such money in a banking organization, such person shall thereupon 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 security 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.>>>"

    See more at: http://codes.lp.findlaw.com/nycode/GOB/7/1/7-103#sthash.ElL1RAK8.dpuf

    The answer provided to you is in the nature of general information. The general proposition being that you should try to avoid a bad outcome if you can.


  2. Firstly you should consult your Lease and any riders or amendments thereto. As to the security deposit, the language in the Lease will control the landlord's duties and responsibilities in that regard. Did you document the manner in which you vacated the premises, pictures, etc.? This would be very helpful in defending your claim or possibly any counterclaims that you may have.


  3. As you indicated that there was no Lease, there is no requirement for a commercial security deposit to be placed into an interest bearing account, just that it not be co-mingled. However, your issues seem larger than that, and you may well end up in court if the landlord refuses to return the deposit and deducts items which are not truly deductible from security deposit. As the amount is only $1400, you may not need an attorney, as that is below Small Claims limits, depending on your status of individual proprietor vs corporation. However, if the Landlord is a corporation, they will need an attorney, so the cost of that may dictate in favor of a fair refund to you.

    This is being provided as an informational service to AVVO and is not to be construed or used as legal advice to any particular individual or entity. Always consult an attorney for review of your actual legal situation and the attendant circumstances, which vary on a case by case basis.

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