Migliaccio & Rathod LLP is investigating landlords and property management companies who may be illegally withholding unpaid interest accrued on tenants’ security deposits, in violation of state laws designed to protect renters.
Tenants May Be Owed Unpaid Interest Even After Their Deposit Was Returned
In several states—including New York and the District of Columbia—landlords are required by law to:
- Place tenant security deposits in interest-bearing accounts, and
- Return the accrued interest (minus a small administrative fee) when the lease ends.
In New York, for example, General Obligations Law § 7-103 applies to all residential buildings with six or more units. Landlords must deposit security funds in interest-bearing accounts and return all but 1% of the interest to tenants at the end of the lease. Any lease term that waives this right is void.
Widespread Noncompliance with Security Deposit Laws
A lawsuit in the U.S. District Court for the Southern District of New York, Blose v. E&M Property Management, LLC, alleges that landlords routinely ignore these requirements—failing to:
- Properly place deposits in interest-bearing accounts
- Return the required interest upon lease termination
- Inform tenants of their right to interest under the law
Despite interest rates rising in recent years, many renters never receive a cent of interest, even when the law says they’re owed it.
Why This Matters
Over time, thousands of tenants may be affected—each losing out on hundreds of dollars or more in interest. These practices may also constitute:
- Breach of contract
- Unjust enrichment
- Deceptive business practices under state consumer protection laws
Are You Owed Interest on Your Security Deposit?
You may have a claim if:
- You rented an apartment in a building with 6 or more units
- You paid a security deposit
- You did not receive any interest (or only got back the principal) when you moved out
- You were not told about your right to interest—or the landlord claimed it didn’t apply
Even if your lease included a waiver, that clause may be unenforceable under your state’s law.
Contact Us
If you suspect your landlord withheld interest on your security deposit, you may be entitled to compensation. We are currently investigating these claims on behalf of tenants nationwide.
To learn more, complete the questionnaire below. If you have further questions, please email us at [email protected] or call us directly at (202) 470-3520.