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Security deposits: LL notifications to tenant, W-9, etc.

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Security deposits: LL notifications to tenant, W-9, etc.

Postby sr77 » Thu Dec 08, 2016 4:36 am

Are landlords required to send periodic statements to tenants re: the status of security deposits, informing them of such things as the name of the bank where the account is held, current balance, interest accrual, etc.?

Also, I was reminded of the above because I had received a W-9 from an unknown bank. When I called the bank to inquire it became clear that it was related to my security deposit. There had been no notification from the landlord so I inquired and had that confirmed.

LL said I should fill out the W-9 and return it to them to be forwarded to the bank, because "their [the bank's] taxation department needs that copy for their records."

Is that an unusual request? I don't recall being sent a W-9 before. My SSN is already shown on the form. What I'm asked to do is confirm that the SSN is correct and that I'm a U.S. citizen, indicate whether I'm an individual,corporation, partnership, etc. and whether or not I'm subject to backup withholding, and sign and date it.

Thanks.
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Re: Security deposits: LL notifications to tenant, W-9, etc.

Postby TenantNet » Thu Dec 08, 2016 6:29 am

I'd be wary about all that. The bank may be the one used by the LL for your deposit, but I would deal directly with the bank, not the LL. I would NOT give the LL my social security number. For RS tenants, there is no obligation to do so and no good can come out of it.

These days the interest earned at banks is so minimal, I'm not sure giving it to the bank even makes sense. Even for backup withholding reasons, the amounts are next to nothing.

I would not confirm or deny your citizenship status to anyone. Especially now with Trump soon to be the prez, if you are not a citizen, you can be asking for trouble. Even if you are a natural born citizen, do you want a country where you have to prove it?
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Re: Security deposits: LL notifications to tenant, W-9, etc.

Postby sr77 » Thu Dec 08, 2016 2:09 pm

Thanks. I haven't head of a way to arrange for a security deposit account to be handled directly between a tenant and the holding bank. Can that actually be done?

Doesn't the landlord have control of the account (essentially as collateral) even though the funds are technically the tenant's?

If I had control of the account in the normal way (as with one's own personal bank account) the LL would no longer have the benefit of the 'security' the security deposit is supposed to provide him, would he?
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Re: Security deposits: LL notifications to tenant, W-9, etc.

Postby TenantNet » Thu Dec 08, 2016 2:33 pm

Yes the LL has control, but I meant if they ask for the SS number.

It's a "trust account" but the LL by law has to tell you where it is.
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Re: Security deposits: LL notifications to tenant, W-9, etc.

Postby sr77 » Thu Dec 08, 2016 10:06 pm

TenantNet wrote:Yes the LL has control, but I meant if they ask for the SS number.
It's a "trust account" but the LL by law has to tell you where it is.

Isn't the LL also supposed to send annual statements to tenants re: interest -- or, given how slight that is these days, just to inform/remind the tenant of the security deposit and its account activity?

Re: the SSN, I'm guessing you mean to just send the W-9 directly to the bank (?)

My other guess is that the LL already has my SSN from some past occurrence or other (like when the security deposit account was first opened), if not from his own interaction with the bank, which clearly has it since it's printed on the W-9.

BTW, looking through a document on the topic here I saw a statement to the effect that security deposit accounts aren't supposed to be comingled; i.e., each tenant is supposed to have his/her own separate account. Is that accurate?
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Re: Security deposits: LL notifications to tenant, W-9, etc.

Postby TenantNet » Fri Dec 09, 2016 5:09 am

I generally refer to this page:
http://tenant.net/Rights/CTRC/ctrcf006.html

It's an old document, but I believe it's still accurate.

The General Obligations Law sec 103 covers this; See below and:
http://codes.findlaw.com/ny/general-obl ... 7-103.html

As to W-9, I've never had a bank ask for one. But if they did, I'd ask for account statements. Some LLs get your SS when you apply to move in, but if not, you are not required to give it to them (at least for rent stab tenancies).

As to commingling, I have seen some case law on that (google it) and even raised it once in a proceeding. Yes, and banks know not to do this. There can be consequences if the LL does, but most likely that would only come as a result of a court case.


New York General Obligations Law § 7-103. Money deposited or advanced for use or rental of real property;  waiver void;  administration expenses

1. Whenever money shall be deposited or advanced on a contract or license agreement for the use or rental of real property as security for performance of the contract or agreement or to be applied to payments upon such contract or agreement when due, such money, with interest accruing thereon, if any, until repaid or so applied, shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal moneys or become an asset of the person receiving the same, but may be disposed of as provided in section 7-105 of this chapter.

2. Whenever the person receiving money so deposited or advanced shall deposit such money in a banking organization, such person shall thereupon notify in writing each of the persons making such security deposit or advance, giving the name and address of the banking organization in which the deposit of security money is made, and the amount of such deposit.  Deposits in a banking organization pursuant to the provisions of this subdivision shall be made in a banking organization having a place of business within the state.  If the person depositing such security money in a banking organization shall deposit same in an interest bearing account, he shall be entitled to receive, as administration expenses, a sum equivalent to one per cent per annum upon the security money so deposited, which shall be in lieu of all other administrative and custodial expenses.  The balance of the interest paid by the banking organization shall be the money of the person making the deposit or advance and shall either be held in trust by the person with whom such deposit or advance shall be made, until repaid or applied for the use or rental of the leased premises, or annually paid to the person making the deposit of security money.

2-a. Whenever the money so deposited or advanced is for the rental of property containing six or more family dwelling units, the person receiving such money shall, subject to the provisions of this section, deposit it in an interest bearing account in a banking organization within the state which account shall earn interest at a rate which shall be the prevailing rate earned by other such deposits made with banking organizations in such area.

2-b. In the event that a lease terminates other than at the time that a banking organization in such area regularly pays interest, the person depositing such security money shall pay over to his tenant such interest as he is able to collect at the date of such lease termination.

3. Any provision of such a contract or agreement whereby a person who so deposits or advances money waives any provision of this section is absolutely void.

4. The term “real property” as used in this section is co-extensive in meaning with lands, tenements and hereditaments.
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Re: Security deposits: LL notifications to tenant, W-9, etc.

Postby sr77 » Mon Dec 12, 2016 6:08 am

Thanks a lot for that information and the links.

> As to W-9, I've never had a bank ask for one.

Wouldn't the bank need a W-9 and your SSN in order to pay you the interest on your security deposit (notwithstanding that these days it's negligible)?
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