Requires landlords to pay interest on all money of tenants of commercial property held as a security deposit

10 Co-sponsors

• Martin Malavé Dilan
• Ruth Hassell-Thompson
• Craig M. Johnson
• Jeffrey D. Klein
• Liz Krueger
• Kevin S. Parker
• Bill Perkins
• Eric T. Schneiderman
• Toby Ann Stavisky
• Antoine M. Thompson

Title of bill

An act to amend the general obligations law, in relation to requiring interest to be paid on security deposits for the lease or rental of commercial property

Summary of provisions

This bill amends Section 1. Subdivision two-a of section 7-103 of the general obligations law, as amended by chapter four hundred two of the laws of nineteen hundred seventy-nine to require landlords to pay interest on all money of tenants of commercial property held as security deposit.

Justification

As of date, any security deposits on rental property in dwellings of six or more family units must be put in an interest bearing account to be paid to the leasee (rentor) upon termination of the contract as pertains to the general obligations law. However, commercial rentors have no such protections. Their security deposits, which are of much greater sums than those of family units, are left to the whims of the landlord as to whether or not they should accrue interest over the years. The security deposit, by accruing interest not only assures the landlord, in the case of breach of contract, that he will have sufficient funds to cover the missing rent but it also insures the leasee that his (her) money will not be frozen over the years but will be active in interest bearing accounts. As such, by insuring that all security deposits on commercial property accrue interest, the benefits are there for both the leasee (renter) and the leasor (rentor).

Fiscal implication

None.

Legislative history

1989-08-Referred to Judiciary.

Effective date

The first of October next succeeding the date on which it shall have become a law.