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DHCR has no jurisdiction over security deposits?

Posted by tenant rep. in NYC on August 31, 1998 at 14:20:25:

The landlord is refusing to return the security deposit of a tenant who changed apartments in the same rent-stabilized building. The tenant paid a security deposit for the new apartment, but the landlord is keeping the old security deposit, applying it to "retroactive MCI". (The landlord was granted this MCI 2 years ago, but the retroactive part collection is held in abeyance, as the tenants filed a PAR, still under review by DHCR.)

The tenant complained to DHCR. In response, DHCR wrote that "problems relating to the payment of interest or the return of security deposit ...are not under the jurisdiction of DHCR".

Please help us with the following two questions: (I am a tenant association rep.)

1) can the landlord use security deposit for MCI purposes, and 2) why are security deposits not (or no longer?) under DHCR jurisdiction? What are the tenant's options beyond going to small claims court? It seems that, by claiming no jurisidiction, DHCR encourages landlords to keep security deposits, as many tenants in NY City are recent immigrants, and are hesitants to pursue these matters in courts.


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