Governor Pledges to Close Security Deposit Loophole for Stabilized Tenants

New York Governor Kathy Hochul recently pledged to close a loophole in state housing law that leaves rent-stabilized tenants without the same protections as other renters when it comes to the return of security deposits.

This move, announced during her State of the State address, aims to amend the 2019 Housing Stability and Tenant Protection Act (HSTPA), which mandates owners return security deposits or provide a detailed justification within 14 days of a tenant moving out. According to the 2025 State of the State Book, rent-regulated tenants were erroneously left out from receiving these protections, and the governor will propose legislation to grant rent-regulated tenants the same protections for their security deposits as all other tenants.

Currently, for tenants in non-rent-regulated apartments, HSTPA requires that within 14 days after the tenant has vacated the premises, the owner provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and return any remaining portion of the deposit to the tenant. If an owner fails to provide the tenant with the statement and deposit within 14 days, the owner forfeits any right to retain any portion of the deposit.