Thursday, January 27, 2011

KEEP THE CHANGE, YA FILTHY ANIMAL: New York law has two big restrictions on what landlords can do with security deposits. First, they have to put the money in an interest-bearing account and the interest must be paid to the tenant. Second, to cover the expense of opening, maintaining, and dealing with the account, they can keep up to the first 1% of interest. Interest rates being what they are, this means I received my annual interest check from Bank of America on my security deposit this week, which I believe amounted to interest of .1% on my security deposit. Even at the ridiculous rental rates in Manhattan, that amounts to a check that's less than the cost of a first class stamp (and may even be a check that's for less than it cost BOA to mail it in bulk mail). Any suggestions for what the appropriate thing to do with such a check is? Is it even really worth depositing? Do I walk to my friendly neighborhood bank branch and ask for cash--in pennies?
at

14 comments:

  1. Jake11:05 AM

    I'm not sure about the constitutionality of this, but it would be great if NYC could change the law to have those checks donated automatically to shelters and other organizations for the homeless.  It's so little money per renter that it wouldn't hurt any individual, but with the massive number of renters in the city, I imagine it would add up to some real money.

    ReplyDelete
  2. christy in nyc11:09 AM

    I'd probably put it in via the ATM the next time I had another deposit to make, not make a special trip for it.

    Unless you have some kind of art project in mind.

    I actually didn't know this was a thing, and I have been renting in NYC for years. I've been cheated out of possibly whole dollars. DOLLARS! What a racket.

    ReplyDelete
  3. The Pathetic Earthling11:30 AM

    I used to a work for a fellow who, for some reason, got a $0.60 dividend check from Texaco or some other oil company and every quarter he'd make a special trip to the bank to cash the thing.

    ReplyDelete
  4. Bob in SA11:31 AM

    Endorse it to your landlord and apply it towards next month's rent. A nice, passive-aggressive approach.

    ReplyDelete
  5. Adam12:11 PM

    Basically, IOLTA?

    ReplyDelete
  6. Jake1:24 PM

    Hadn't thought of that analogy (you're so far removed from client trust accounts as a biglaw associate), but it seems to be the exact same idea.  I guess that means it's legal?

    ReplyDelete
  7. bella wilfer1:24 PM

    HOME ALONE post title!!! Best.

    ReplyDelete
  8. Adam1:29 PM

    Brown v Legal Foundation of Washington (2003) held that it wasn't a taking.

    ReplyDelete
  9. KR1:39 PM

    I only get that money when I end my lease.  Why are they sending it to you now?

    ReplyDelete
  10. Matt1:48 PM

    I believe under law, they have to provide your interest annually (to the extent that there's any left after administrative fees).  It's typically followed by a 1099-INT for about 3-4 bucks.

    ReplyDelete
  11. isaac_spaceman3:16 PM

    You don't lose the money if you don't cash the check.  The issuing bank will hold the funds represented by uncashed checks for a long time (though the check itself will become non-negotiable after a shorter period, maybe 6 months).  They are required to escheat it to the state if it goes uncashed for several years.  I don't know the specific number in New York, but for intangible property it's usually 5-10 years.  So you could keep getting these checks and letting them sit there, and then after several years, when it's worth your time, you can write to the bank (providing whatever identification is necessary in the state in which the bank is located) and ask for your funds.  If you wait too long, you may have to request the money from the state, instead of the bank, but the principle is that the state is holding it on your behalf (actually, it's supposed to be looking for you so that it can give you the money, though it never actually does that), which means that you have a permanent right to obtain it from the state. 

    ReplyDelete
  12. Watts4:02 PM

    You could take the opposite tack and make it even more absurdly time/money wasting by:
    1. Endorsing the check to someone else
    2. Mailing it to him/her using a first-class stamp
    3. Making it his/her problem.

    ReplyDelete
  13. Anonymous6:34 PM

    I'm an actress and get teensy tiny checks all too often--always a disappointment to open those envelopes.  Our payment for internet residuals is especially small... Screen Actors Guild has come up with a great option though. Checks under an amount of your choosing can be automatically donated to the Guild's foundation which, among other things, supports the SAG retirement homes.  It's small from any one person but probably adds up for them. 

    ReplyDelete
  14. Andrew10:22 PM

    New York has an easy to use database of unclaimed funds on a website: http://www.osc.state.ny.us/ouf/index.htm

    It's worth checking every so often (if you live or work in NYS). 

    ReplyDelete