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NYC Apartment - Using the security deposit for the last month's rent
May 2, 2014 10:57 AM   Subscribe

What issues (legal and ethical) do I face if I attempt to don't pay my last month's rent, and let my security deposit take its place instead? Details/justifications within...

My spouse and I have been living in an apartment in NYC for two years now, and we're not confident that we won't get bilked for our security deposit. As a result, we're debating whether or not to pay the last month's rent, using the security deposit instead (the amounts are not equal, so we would plan on sending a check to make up the small difference).

-We haven't had much contact with the landlord/real estate manager, in general; there is a superintendent who is nice, but very difficult to communicate with, and so whenever possible, we have avoided asking him for help or repairs. When we have spoken with the landlord, he doesn't seem especially helpful or especially shady - the relationship is strictly neutral. But we're concerned about getting our security deposit back for a couple of reasons:

-While we've been living here, the landlord has done lots of construction in other apartments on the building. As a result (and perhaps due to shifting of the overall building as well) there are cracks in the walls, and the bathroom door no longer closes fully. We're concerned that this could be blamed on us, though we did not cause these issues.

-In addition, a couple of months ago, the landlord brought in a crew to open up a small hole in one of the walls to run wiring through to another apartment. They haven't been back to fix it, and I haven't pressed them to, because they did a poor job of cleaning it up on the first visit, and didn't even attempt to clean it on the second visit. Since we were moving out anyway, we thought it was easier to keep the wall taped up than to have to clean up the massive amounts of dust and grime that the crew generated previously.

-Overall, when we moved into the apartment, we found it to be dirty and grimy from construction (it hadn't looked like that when we'd signed the lease), with broken glass and loose screws and nails in a few corners. We wound up doing a significant cleanup ourselves so that we wouldn't have to wait to move in. We are planning on leaving the apartment clean and in better condition than we found it.

-In reviewing the lease, it does stipulate that the security deposit should not cover the last month's rent.

So, in sum: what legal repercussions need we worry about if we decide to forgo paying the last month's rent? Are we being illogical or unethical in deciding to do this? If you think we should pay the last month's rent, how can we be sure that we won't be charged for damages that we did not cause?

Thank you!
posted by rock'em sock'em puppets to Home & Garden (30 answers total)
 
Finally, I haven't been able to find this exact issue on Metafilter (or Google). Please let me know if there is something I might have missed.
posted by rock'em sock'em puppets at 10:58 AM on May 2


I have done this every time I've moved in NYC, which is....hmm...four times?

You're probably fine.
posted by Narrative Priorities at 11:00 AM on May 2


I saw an ask me here not too long ago where the renters took date and time-stamped pics of every room after they had everything out and cleaned the place. When the landlord tried to charge them for damage they did not cause, they told him about the pics and threatened small claims court. He backed down immediately.

Is your idea unethical? My two cents answer is yes.
posted by harrietthespy at 11:00 AM on May 2 [1 favorite]


My understanding is that this is the default arrangement in NYC. Just reach out to your landlord and verify that they are going to do this.
posted by Sara C. at 11:02 AM on May 2


In reviewing the lease, it does stipulate that the security deposit should not cover the last month's rent.

You made an agreement in writing that you're considering violating outright. I do think that's unethical.

None of the reasons you listed involved the landlord stiffing people out of money, so I think you might be a little illogical in assuming he'll stiff you.
posted by Bentobox Humperdinck at 11:03 AM on May 2 [2 favorites]


Also, unless you have had a bad experience with your landlord so far or there is damage that could be claimed which you know you didn't cause, I wouldn't worry so much about getting scammed out of your deposit. Most landlords have to do some minor cleanup and painting between tenants, anyway, and I've never heard of anyone being charged for stuff that would be taken care of during that transitional maintenance period (e.g. nail or tack holes, discolored paint, dust behind the fridge, etc).
posted by Sara C. at 11:05 AM on May 2


Ah, sorry, I missed the bit where your lease specifically says you aren't supposed to do this...hmmmm...maybe try asking them? Are you dealing with a big management company or just a dude/lady who owns the building? I definitely don't think it's unethical, and it's the standard practice for everyone I know here in the city, but if it's going to stress you out this much then maybe get permission or just concentrate on making sure they don't try to keep your deposit.

(Note: I have an extremely low opinion of the honesty of your typical NYC management company.)
posted by Narrative Priorities at 11:06 AM on May 2


I would plan on paying the last month's rent, and I would send an itemized list to the landlord today outlining the issues and problems, with picture, and ask for them to be repaired.

Take plenty of pictures upon move out of the apartment, noting where problems were caused by contractors, and have them ready.

You can always ask the landlord, via email, if you can pay last month's with your deposit, but that's not what it's for.

Did you by chance pay first and last, in addition to deposit upon moving in? Just a shot in the dark.
posted by Ruthless Bunny at 11:09 AM on May 2


Everywhere I have lived, those (security deposit, last month's rent) were two different entities. I did actually just move out of a place where we paid both, and accordingly did not pay the last month's rent. The security deposit will be returned minus some stuff that is perfectly legitimate.

Had we moved out without paying expected rent, there wouldn't have been deposit money to cover those legitimate expenses. I would distrust the "everybody does it" excuse, as a motivated landlord could end up dinging your credit for breaking a lease, and then there's the question of references.
posted by Lyn Never at 11:10 AM on May 2


I can sympathize with you because I feel like I have usually gotten screwed when it comes to deposits. However, leases are legally binding agreements, and there is a reason this is a common clause in leases, as the deposit serves a totally separate financial obligation from the rent. If you choose to not pay last month's rent and consider your deposit that rent, your landlord would be well within his rights to take you to small claims and sue you for the rent.

Now, that's a huge hassle, and he probably won't do it simply because the amount probably doesn't really justify going through the whole ordeal, but that is your risk. You'd be banking on him shrugging it off.
posted by Lutoslawski at 11:15 AM on May 2 [1 favorite]


I am landlord, and personally I hate when tenants do this - because it always seems to be the tenants that have damage in the apartment that do it. You say you didnt damage anything, so I guess I will believe you here.

It seems to me that you are assuming bad faith on the part of the landlord, and are planning to correct that by committing an act of bad faith. Landlord's have a lot to lose for illegally withholding deposits. I don't really see why you should assume they will act in bad faith.

If the bathroom door doesn't close, why didn't you notify the landlord?

Realistically, the landlord will probably not be able to do much to stop you - but you are burning the bridge. You certainly can not put that address down on any future rental applications. For sure, if another landlord calls them to check references, they will burn you back.
posted by Flood at 11:15 AM on May 2 [9 favorites]


FWIW I would not at all worry about the "damage" issues you refer to. Cracks in walls and doors that don't shut properly are par for the course in any NYC apartment and there is no way you guys could have caused that unless one of you is the Hulk. Maintenance issues caused by shoddy/incomplete work done by workers brought in by the building is very clearly not caused by you.

I would be more worried if there were, for example, pet-related damage to the walls/sills/moldings, or if you had hired your own workers who had done shoddy/incomplete work.

Take pictures and make careful notes, sure, but I would be really shocked if your landlord tried to scam you out of your deposit for such obvious not tenant related issues.
posted by Sara C. at 11:15 AM on May 2


Ethically: two wrongs don't make a right, and a wrong in anticipation of an expected non-wrong (as you say you don't expect your LL to bilk you) makes ... even less of a right.

Legally: your LL can start eviction proceedings within 3 days of non-payment of rent. That may well follow you for a long time, when you go to apply for apartments after this next one.

It is not your choice to "let" your security deposit take the place of rent. There are very strict laws that cover when and how security deposits are used or returned. They protect both you and the LL.
posted by Dashy at 11:38 AM on May 2


I wonder if all the people who think this is unethical have ever rented apartments in a major city like NYC. I think pretty much everyone I know has done this at some point, myself included, no harm has ever come AFAIK. Not that that makes it 'right' but in a city where rent is astronomically high and you are being asked to put down first, last, and a deposit AND pay rent on your other place and hold out for getting that deposit back (hopefully) AND pay for moving it's not like violating a clause in a lease for a place you are leaving is the crime of the century.

I've never heard of a landlord suing someone for money they already have in their pocket. Eviction proceedings in NYC for someone who's moving out? I guess it's possible but semi-absentee NYC property owners are not in the habit of creating lots of work for themselves out of spite. Most likely he'll pocket the money and move on to the next tenant. And who cares if you burn this bridge if you already have a lease on a new place?
posted by bradbane at 11:45 AM on May 2 [1 favorite]


Are you sure you didn't already pay "last months rent" in addition to the security deposit?

Many places I've rented I've had to send in first/last and security dep.
posted by bottlebrushtree at 12:00 PM on May 2


Thank you all for the advice.

A few clarifications:

-We did not pay the last month when we signed, just first and deposit.

-We are not moving within NYC, and don't ever intend to return to NYC, so not as concerned about burning bridges, etc. (the other apartments we've found where we're looking to move don't require references like this).

-Technically, they don't really require rent until the 10th. In general, they don't usually cash the check until the 20th, so I'm not concerned about them opening up eviction proceedings in the next few days.

-In terms of ethical advice, I was really looking for something that I might not have thought of before. If we had damaged the apartment in any way, for instance, I would understand that it would be ethically wrong. But since we'll be leaving the apartment in as tip-top shape as we can, given the circumstances, and we'll be making up the difference between rent and deposit, I don't view that in particular as an ethical issue about which I'm concerned.

That said, the advice here has made me rethink this, and consider paying the last month's rent. To the folks that suggested we take pictures of everything and all of the damage: how will this constitute any sort of proof in court? We can't prove the time that the damage was done, or that it wasn't us that caused it? Any suggestions for this?
posted by rock'em sock'em puppets at 12:03 PM on May 2


Taking photos now means that, if your landlord starts saying that you caused all sorts of damage you didn't cause, or blows the condition of the apartment way out of proportion, you have proof of what condition you actually left it in. For example there's a huge difference between a crack in plaster from a building settling over time (which you will see in any NYC apartment) and a hole where somebody punched the wall. If your landlord says the latter happened, you can show a photo of the hairline cosmetic damage crack that was actually there.
posted by Sara C. at 12:11 PM on May 2


Considering the clause in your lease, your question boils down to "What are the outcomes of continuing to live in an apartment when I cease paying rent?" Because that's what you're doing.

The consequences vary. The landlord may let it slide, may start eviction, may sue you for any damages to the apartment, or may just (validly) give you a poor reference. He could also write up a damages claim, send you a dunning letter and then send your debt to a collections agency. That will start thrashing your credit while you sort everything. You may not rent again in NYC, but a tenant default on your credit history will haunt you in most rental markets.

The takeaway here is that if you stiff him on last month's rent, then you aren't in the clear for damages. He'll sue you for damages and that's a less fun outcome.

A different way to address your concerns is to schedule a walkthrough with the landlord to check for damages.
posted by 26.2 at 12:18 PM on May 2


You take photos of the damage the workers did, and email or snail mail your landlord using statements like "this hole was left by workers who came at your request on Jan 15 2014"


If your landlord never responds, it suggests that he doesn't dispute your version of events (IANAL). This is what people mean when they say "keep a paper trail." It's ideal if you document it with him as it happens, but failing that, as soon as possible, and with the dates that the damage was done. It may or may not include a request to fix the damage. But it establishes a paper trail. Now, could a tenant lie and send an email and a photo saying that workers busted something that the tenant actually busted? Yes, but if you act quickly, right when it happens, the landlord knows when workers were in there or not, and can call them when everybody's memory is fresh and say "did you bust that thing?"

If you document it right away, he has to put energy into disputing your story, so inertia is on your side. You leave in June and the landlord says "hey! This thing is busted!" And you say "I emailed you a picture of that in January and told you the workers did it, remember?" He says "Ah, i don't think the workers did it." And you say "why didn't you tell me at the time?!"

But if you wait until you move out, the landlord says "why didn't you tell me about that broken thing at the time?! I woulda fixed it....I kinda don't believe you...."

(Landlords, in my head, always sound like my 80 year old, former NYC Teamster father-in-law.)
posted by vitabellosi at 12:41 PM on May 2 [2 favorites]


We can't prove the time that the damage was done, or that it wasn't us that caused it?

This is true, and it's a reason you should have documented these things and notified your landlord at the time they happened. If they didn't bother you enough to mention at the time, they're certainly not justifications for acting in bad faith now.

If you think we should pay the last month's rent, how can we be sure that we won't be charged for damages that we did not cause?

You can't be sure of this, especially because you did not document damage, but that does not make it legal or ethical for you to run out on the tab.

Your question is confusing. Do you really want to know what is legal and ethical or do you want to know whether you can get away with this? It seems clear the answer to the first question is "no" and that no one can give you more than a "maybe" on the second. Just pay the rent.
posted by whoiam at 1:50 PM on May 2 [1 favorite]


You signed a contract explicitly forbidding what you are asking about. So it is not ethical to do what you propose, and if you never intended to abide by that clause then signing the contract would have been in bad faith, ergo unethical.

Your rationale about possibly being stiffed is not sufficient to make it ethical, since it is merely hypothetical and based only on your assumptions. The notion that "everyone does it" is not germane to the ethical consideration since you essentially swore in a legally binding agreement that you would not do this.

-In terms of ethical advice, I was really looking for something that I might not have thought of before. If we had damaged the apartment in any way, for instance, I would understand that it would be ethically wrong. But since we'll be leaving the apartment in as tip-top shape as we can, given the circumstances, and we'll be making up the difference between rent and deposit, I don't view that in particular as an ethical issue about which I'm concerned.

To me this reads like you are not actually concerned about the ethics, or that you don't understand what "ethics" means. You're trying to find a rationale to justify behaving unethically, or looking for some ethical consideration that trumps violating the terms of your contract, which does not appear to exist in your case.

Do whatever you want to do, but you have no protection for doing so on the basis of ethics.

You've also posted your question on a publicly-accessible website without anonymizing your user ID, which could potentially come back to bite you in the ass if you ever do get sued over violating your agreement. It might be a trivial risk, but it's out there for the world to see.
posted by under_petticoat_rule at 2:07 PM on May 2 [2 favorites]


Sorry, hit "post" before addressing another part of your question regarding potential consequences.

If your landlord does sue you, and you've already moved, you'll have to go back to defend yourself. Depending on where you move to that could cost more than paying the rent and then getting your deposit back legitimately.
posted by under_petticoat_rule at 2:10 PM on May 2


Can't you just ask your landlord? Find some reason that it's maybe in their best interest too?

I was in a place that was itchy to be rid of me so they could gut the place and JACK up the rent. They offered me this option.

Why risk pissing them off? If provoked, they could come back at you in a million ways since you did violate the terms of your lease.
posted by crankyrogalsky at 2:53 PM on May 2


I don't think it's ethical and have never done this, but I don't necessarily see practical repercussions.

Here's a hypothetical situation on the ethics -- what if they locked up the security deposit in a CD that would expire the day you were scheduled to move out, on your assurances that you'd be paying your last month's rent? Now, they might face having to pay the building's mortgage or other fixed expenses without the cash flow of your rent payment. (I mean, they're idiots if they don't have the savings to cover one tenant's non-payment, but you don't know; maybe some major repair just used up their savings or eight other tenants are moving out and doing the same thing.)

If you live in a jurisdiction where they're supposed to provide you with some minimal interest on your security deposit, remember to reduce your additional payment by that amount.
posted by salvia at 3:48 PM on May 2


Surprised that people do this and think it's ok. I lived in NYC for 14 years and never once did this or knew anyone who did.

A security deposit isn't rent for the last month. It's an advancement of money by you to guarantee your performance under your lease contract. It's placed into a separate savings account. I think it's even supposed to be an interest-bearing account.

So, yeah. Don't do this. The proper thing to do is take pictures when you move in. When you move out, you take pictures. Take move-out pics even if you don't have move-in pics. If the LL complains, you discuss and offer your evidence. If it escalates, there's court.

For those of you who think it's ok to neg out like this and not pay your last month's rent, that's unacceptable. Guess you all don't use your past LLs as references?!
posted by vivzan at 4:38 PM on May 2 [1 favorite]


I'd be less concerned with whether it's OK to use your security deposit to pay last month's rent so much as whether you are ever going to see your security deposit again at all. I've lived in about five different apartments (not all in NYC - shady developers are the same everywhere, sadly) and I have gotten my security deposit back once, and that wasn't even the whole thing.
posted by dekathelon at 5:12 PM on May 2


If you choose to not pay last month's rent and consider your deposit that rent, your landlord would be well within his rights to take you to small claims and sue you for the rent.

No, he's got rent in the form of the security deposit. He would sue for any damages. What giving up the deposit does is shift the burden to sue from the tenant to the LL.

FWIW, I did this a few times in NYC. This is business, not ethics class. I wouldn't sweat the ethics, although I would try to negotiate this in advance of the move if the LL isn't a total scumbag.
posted by jpe at 5:33 PM on May 2


Didn't see you were moving outta state. I would definitely see if I could figure this out in advance. That's an easy default judgment for the LL unless you return to defend, and those can be enforced from out of state.
posted by jpe at 5:50 PM on May 2


Surprised that people do this and think it's ok. I lived in NYC for 14 years and never once did this or knew anyone who did.

It's business, the landlord has the money, no need for drama. If you've rented for 14 years and never had to think about where you were going to get 3-4 months worth of rent payments in cash to move I would call that pretty lucky. When I did it my lease was up and I had to move at the same time a client dragged their feet on payment for a job done months past. So how's that for an ethical dilemma: I could stiff my coworkers for work they'd already completed (by contract net 30, which we were well past) or the landlord (for money he already had)? My landlord did not throw a small claims court temper tantrum because he's a business guy too, he shrugged and told me to leave it clean and be out early if possible.

I'm not advising the OP to do this or saying it's "right", but if you don't have the cash on hand and are weighing your options I don't consider it a moral failure to break a lease agreement. Of course there will be risk and potential consequences, just like with any financial decision. You can't pay rent/security deposits with a credit card though, and you have to live somewhere.

Unfortunately a lot of landlords don't treat their business like a business and might take it personally and do something pointless, only OP can know if that is likely or not.

I've lived in about five different apartments (not all in NYC - shady developers are the same everywhere, sadly) and I have gotten my security deposit back once, and that wasn't even the whole thing.

Ask for copies of receipts for everything they deducted. I have gotten every cent of my deposits back (except for the one above exception) just by asking for documentation. If they can't prove it with a paper trail they can't keep it.
posted by bradbane at 7:22 PM on May 2


I wouldn't. The security deposit is for damage not rent. I'd suggest that you ask if it's ok have the landlord do a walk through and get something in writing.

The likelihood your landlord will follow through with legal proceedings depends on the cost of court vs cost of rent.

Also housing references are important.

Seriously ask the Landlord. You knew upfront that this wasn't something he wanted (he bothered to put it in the lease) and should have arranged a way to save money when you planned on moving so you were not dependent on needing the last months rent.
posted by AlexiaSky at 8:54 AM on May 3


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