Do I owe my tenants more money after they broke the lease?

Full question:

I am a landlord in New York State. My tenants have signed a 1 year lease until March, 31, 2011. At the end of December 2010 they informed me they would be breaking the lease and moving out at the end of January 2011. Originally with a verbal agreement between myself and the tenants I would keep their security (1200.00) and last months rent (1225.00) to carry them through. One for February and one for March. Although rent was 1225.00 they would be 25.00 short one month I let that go. Later in January they approached me to get some security back; they had not yet moved out. Verbally again we agreed that I would give some security back after inspecting the place after they moved out. January 29, 2011 they moved out. I inspected the place and found $300 in damages. Their security totaled 1200.00, so I returned 900.00 to them on Feb. 15, 2011. I also did them a favor when they were signing the lease because I wanted a pet deposit as well and they could not afford that, so I let that go knowing I had their security. The dog did most of the $300.00 in damage. They have now found out that I have re-rented the place and want more money back. Do I owe them anymore because my lease indicates that a landlord can keep security or some of it if the tenant breaks the lease, which they signed. They are looking for I guess the last months rent I have (1225.00). Do I owe them that or anymore money? Haven't I been more then generous considering they broke the lease?

• Category: Landlord Tenant
• Subcategory: Security Deposit
• Date: 04/07/2025
• State: New York

Answer:

In New York, landlords typically require a security deposit, usually equal to one month's rent. When a tenant vacates, the landlord must return the security deposit minus any lawful deductions for damages or unpaid rent. Landlords must treat these deposits as trust funds and cannot mix them with their own money. If the building has six or more units, the deposit must be held in an interest-bearing account, and tenants must be informed of the bank details.

In your case, you found $300 in damages after the tenants moved out and returned $900 of their $1,200 security deposit. Since the lease allows you to retain some of the security for damages, you acted within your rights. The tenants may feel entitled to the last month's rent, but since you agreed to use the security deposit for February and March rent, you are not obligated to return any additional funds. Your generosity in waiving the pet deposit does not change the lease terms or your obligations as a landlord.

If the tenants dispute your decision, they may take the matter to Small Claims Court. Ultimately, the lease terms and New York law will guide any resolution.