SGW Properties LLC Failed to Return Security Deposits Within 14 Days and Failed to Provide an Itemized List of Costs, as Required by New 2019 Laws
New York Attorney General Letitia James today announced that she has reached an agreement with New York City landlord SGW Properties LLC and their related LLCs for failing to return approximately $296,272 in security deposits to New Yorkers following new changes to security deposit laws. Attorney General James found that SGW failed to comply with the 2019 changes to the state’s rental laws when they did not return security deposits to 129 tenants within 14 days of the tenant vacating the apartment or providing a written itemized list of their reasons for keeping the deposit. All of the tenants resided in SGW’s various buildings throughout Brooklyn, including Crown Heights, Bedford-Stuyvesant, Midwood, Stuyvesant Heights, and others. Under the terms of the agreement, SGW must return all improperly retained security deposits to approximately 129 tenants harmed by their failure to follow the law, train all staff in compliance with the updated security deposit law, and pay a $10,000 penalty.
“As housing, health, and affordability crises continue, it's more important than ever to put money back into the pockets of New Yorkers,” said Attorney General James. “Tenants deserve transparency and accountability from their landlords, and New Yorkers should trust that their security deposit will be returned to them as required by their leases and the law. I will always stand up to landlords who take advantage of their tenants and disregard the law for their own benefit.”
In June 2019, New York enacted new legal protections for tenants requiring landlords to either return the entire security deposit or provide an itemized written list of their reasons for keeping the deposit. If the landlord fails to provide the itemized list within 14 days, they no longer hold the right to keep the deposit and must return the entire amount. Tenants who sue for their security deposit and are successful are entitled to actual damages. If the landlord’s actions were intentional, the tenant is entitled to double damages.
In May 2021, the Office of the Attorney General (OAG) launched an investigation into violations of the new security deposit law, following complaints by New Yorkers who reported that their security deposits were being withheld by landlords. The investigation found that SGW failed to send itemized lists outlining their reasons for withholding security deposits, and therefore were not authorized to keep the deposit. Additionally, SGW did not properly segregate the security deposits in escrow accounts as required by law. It is estimated that SGW unlawfully withheld security deposits from 129 residents for a total of $296,272.59.
Attorney General James’ agreement with SGW ensures that all unlawfully withheld security deposits are returned to former tenants and requires the company’s staff to receive compliance training to prevent future violations. SGW must also pay $10,000 in damages to New York state and will be subject to a $2,000 penalty for every significant violation of this security deposit law in the future.
The OAG is engaged in several other investigations related to security deposits and tenant protections. The OAG will continue to monitor complaints to ensure that landlords are complying with the law. Anyone who has questions or believes that their landlord has violated the law is encouraged file a consumer complaint.
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