A 1431: Establishes security deposit options for certain tenants, including but not limited to, an option to pay any deposit or advance to rent or use residential real property or a dwelling unit.

  
  STATE OF NEW YORK ________________________________________________________________________ 1431 2025-2026 Regular Sessions  IN ASSEMBLY January 9, 2025 ___________ Introduced by M. of A. GONZALEZ-ROJAS, TAYLOR, DAVILA -- Multi-Sponsored by -- M. of A. SIMON -- read once and referred to the Committee on Housing AN ACT to amend the real property law, in relation to establishing secu- rity deposit options for certain tenants The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The real property law is amended by adding a new section 2 238-b to read as follows: 3 § 238-b. Security deposit. 1. A landlord who requires a security 4 deposit to be paid by a tenant which is covered by the provisions of 5 sections 7-107 and 7-108 of the general obligations law shall also be 6 required to offer to accept at least one of the following options in 7 lieu of such security deposit: 8 a. Payment of any security deposit over a series of no less than six 9 equal monthly installment payments, which installments shall be due on 10 the same day as the monthly rent payment and which may be paid together 11 with the monthly rent payment in a single transaction, absent a separate 12 agreement between such landlord and tenant; 13 b. Payment of a reduced security deposit which shall be no more than 14 fifty percent of the amount of one month's rent under such contract; or 15 c. If such tenant qualifies, payment of any deposit pursuant to 18 16 NYCRR 352.6. 17 2. In addition to the options in subdivision one of this section in 18 lieu of a security deposit, a landlord may accept rental security insur- 19 ance, defined as a surety bond or insurance policy issued by a 20 licensed carrier in the state of New York that guarantees or indemnifies 21 a tenant after default of a financial obligation under the rental 22 agreement. If the landlord wishes to offer or suggest rental security 23 insurance that is provided by itself or a separate company, the rental 24 security insurance offered must satisfy the following criteria: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03281-01-5 
 A. 1431 2 1 a. the insurance provider is an approved carrier licensed by the 2 department of financial services pursuant to article eleven of the 3 insurance law; 4 b. the coverage is effective upon the payment of the first premium or 5 fee and remains effective for the entire lease term; 6 c. any dispute under the coverage cannot require arbitration and waive 7 the tenant's right to go to court; 8 d. the amount paid by the tenant cannot exceed the amount of the 9 coverage; 10 e. the tenant cannot be liable to the insurance provider for any 11 claims paid out to the landlord; and 12 f. the coverage provided per claim is no less than the amount such 13 landlord requires for security deposits. 14 3. A tenant who elects to provide rental security insurance, pursuant 15 to paragraph a of subdivision one of this section, in lieu of a required 16 security deposit shall not be required to provide additional security or 17 insurance coverage per claim in an amount greater than the amount 18 required for the security deposit. 19 4. Such landlord shall not impose any additional fees or interest on a 20 tenant that pays their security deposit in an alternate manner pursuant 21 to subdivision one of this section. 22 5. Any agreement to pay a security deposit in installments shall be 23 included within such contract, lease or agreement and shall specify the 24 total deposit amount due and the amount due for each installment. 25 6. Prior to entering into a contract, lease or rental agreement a 26 landlord shall provide the tenant written notice of the available secu- 27 rity deposit alternatives and include the following language: "If a 28 security deposit is required, tenant has the right to request and land- 29 lord is required to accept one of the following three alternatives: a. a 30 deposit paid over no less than six equal monthly installments; b. a 31 one-time reduced security deposit payment of no more than fifty percent 32 of the monthly rental rate charged for the rental unit; or c. if such 33 tenant qualifies, a deposit paid through the department of social 34 services grant program pursuant to 18 NYCRR 352.6. Tenant shall not be 35 required to provide rental security insurance coverage per claim in an 36 amount greater than the amount required for the security deposit". 37 7. The requirements of this section shall be considered source of 38 income as defined by subdivision thirty-six of section two hundred nine- 39 ty-two of the executive law and any violation of this section may be a 40 violation of section two hundred ninety-six of the executive law. 41 § 2. This act shall take effect on the thirtieth day after it shall 42 have become a law. Effective immediately, the addition, amendment and/or 43 repeal of any rule or regulation necessary for the implementation of 44 this act on its effective date are authorized to be made and completed 45 on or before such effective date.