New York’s residential rental rules changed significantly with the Housing Stability and Tenant Protection Act (HSTPA) of 2019, and the rules have continued to evolve since. For NYC landlords, knowing exactly what you can and can’t ask of a prospective or current tenant is essential to staying compliant and avoiding penalties.
Security deposits: capped at one month
Under HSTPA, a residential landlord generally cannot collect more than one month’s rent as a security deposit. The old practice of requiring “first month, last month, and a security deposit” up front is no longer permitted for most residential rentals. You also cannot require an oversized deposit in lieu of last month’s rent that pushes the total above the one-month cap.
The law also tightened the rules on returning deposits. Landlords must:
- Return the deposit within 14 days after the tenant moves out.
- Provide an itemized statement of any deductions for damage beyond normal wear and tear.
- Offer the tenant an opportunity to inspect the unit before move-in and again before move-out, with a written statement of conditions, if requested.
If a landlord fails to provide the itemized statement on time, they can forfeit the right to keep any portion of the deposit. Documentation — move-in and move-out condition reports with photos — is your best protection.
Application fees and screening costs
HSTPA capped what landlords and their agents can charge applicants. A landlord cannot charge more than a modest statutory amount for application processing, which covers the cost of a background and credit check, and only the actual cost of the screening if it is lower. The widely cited figure is a low fixed cap, but because such amounts can be adjusted over time, confirm the current limit before charging anything.
You also cannot charge for a credit or background check if the applicant provides a recent copy of their own report that meets the requirements. Practically, this means application fees are no longer a revenue source — they exist to recover genuine screening costs and nothing more.
Late fees and other charges
Late fees on residential rent are also limited. A landlord generally cannot charge a late fee until the rent is at least five days late, and the fee is capped at a small amount or a small percentage of the monthly rent, whichever is less. The specific cap is set by statute and should be verified, but the principle is firm: late fees must be reasonable, disclosed in the lease, and cannot be stacked or compounded into a penalty.
Source-of-income protection
It is illegal in New York City and State to refuse a tenant because of their lawful source of income. This protection is broad and includes:
- Housing vouchers (such as Section 8 and CityFHEPS).
- Social Security, disability, and other public benefits.
- Child support, alimony, and other lawful income.
That means a landlord cannot advertise “no vouchers,” refuse to accept a voucher, or apply income-multiple requirements (for example, “must earn 40x the rent”) in a way that effectively screens out voucher holders. Treating voucher income as legitimate income — and counting the voucher portion toward affordability — is required, not optional. Source-of-income discrimination is one of the most actively enforced areas of NYC fair housing law.
Tenant screening: what you can still do
Landlords retain the right to screen for legitimate, non-discriminatory reasons. You can:
- Run credit and background checks (within the fee limits above).
- Verify income and employment, applied consistently to all applicants.
- Check landlord references and rental history.
What you can’t do is apply standards selectively or use screening as a pretext to exclude protected classes. New York also restricts the use of past eviction-case records (often called tenant “blacklist” screening) to deny housing. Apply the same objective criteria to every applicant and document your reasoning.
Broker fees: who pays now
Recent reform changed the long-standing NYC custom of tenants paying the broker fee even when the landlord hired the broker. Under the current approach, the party that hires the broker is generally the one responsible for paying that broker’s fee. In practice, when a landlord engages a broker to list and rent a unit, the landlord — not the incoming tenant — typically bears that cost, and landlords are required to disclose fees clearly up front.
This is a meaningful shift in how leasing costs are allocated, and it affects how owners budget for marketing a vacancy. Build broker costs into your pro forma rather than assuming the tenant will absorb them.
Bottom line
The throughline of New York’s residential rules is transparency and limits on up-front costs: one month’s deposit, capped application and late fees, mandatory deposit accounting, strong source-of-income protection, and broker fees falling on whoever hired the broker. Because several of these caps are set by statute and can change, verify current figures before you collect. Sterea Realty Group handles residential leasing in full compliance with these rules across every property structure.
This article is for general informational purposes and is not legal, tax, or financial advice. Rules change and the specifics vary by property — consult a qualified professional about your situation.