Security Deposit Alternative in New York
New York limits two things at once: how much you can hold as a security deposit, and what else you are allowed to charge a tenant on top of rent. New York City adds a further layer on top of the state rules. That combination is why a deposit alternative in New York should be offered to a resident as a choice rather than written into the lease as a requirement.
What New York law says about security deposits
Read from the New York statute on 2026-09-04. Deposit rules change, and this is general information rather than legal advice. Confirm the current text with your own counsel before you change a lease.
Can you require it of every New York resident?
New York regulates both halves of this at once. General Obligations Law 7-108 governs the deposit, and Real Property Law 238-a limits what a landlord may charge a residential tenant on top of rent. New York City adds its own layer. Because both the deposit and the extra charge are limited, New York is not a state where you should assume a required monthly fee is permitted. Offering it as a choice is the conservative starting point.
Rules differ by state and by city, and subsidized housing is its own question. This is general information for property managers, not legal advice. Get a written opinion before you make the fee a condition of tenancy anywhere.
How the program works in New York
The mechanics are the same in every state Beagle operates in. The program is designed to comply with applicable state and local regulations, and the rate is set by the deposit amount rather than by geography, so a New York property and one two states over are quoted the same way.
The resident chooses at signing
Instead of producing the full deposit, the resident pays a smaller non-refundable monthly fee that is billed with rent. Nothing is held, so nothing has to be returned.
The property keeps its protection
Damage beyond normal wear is reimbursed up to the deposit amount the unit would otherwise have required, so what you can recover does not shrink.
Move-out stops being a negotiation
A claim is filed against the program rather than deducted from money you are holding, which takes the itemised-deduction letter and the dispute that follows it off your team's desk.
You earn on every resident who takes it
You set an administrative fee on top of the premium, up to $5 per unit per month, and keep it.
New York security deposit alternative FAQs
Do not assume so. New York limits security deposits under General Obligations Law 7-108, and separately limits what else you can charge a residential tenant under Real Property Law 238-a. New York City rules go further again. Get a written New York opinion before you make the fee a condition of the lease, and expect offering it as a choice to be the workable version.
Security deposit rules in other states
See it on your New York units
Run the program against your own unit count, or walk through it with our team. No upfront fees, no onboarding charges, no long-term contracts.