Last year, around 232,000 landlord-renter lawsuits were filed in New York City alone. These lawsuits arise from various disputes over unpaid rent, lease violations, and property damage. One of the most common disputes, however, is over security deposits.
In New York, a landlord typically has a window of 21–45 days after a renter moves out to return or address what deductions are being made to the security deposit. Disputes over security deposits arise when a landlord has not returned the security deposit within that time frame, has made unreasonable deductions, or has kept the full deposit due to unpaid rent, cleaning costs, or property damage.
The cost to resolve these conflicts varies, though larger or more complex disputes can be very expensive because of lengthy proceedings and costly lawyers. Disputes under $5,000 (or under $3,000 in town and village court jurisdictions) can generally be pursued for as little as $50 in small claims court with no lawyers needed. One caveat: the average small claims case sees 1–2 months wait time to appear before a judge.
As an alternative, renters and landlords can hire an arbitrator or mediator rather than go to court. However, at $80–250/hour, this out of court solution can get expensive depending on how long the proceedings last.
TheGuarantors’ risk management platform preemptively addresses the landlord-renter tension over security deposits — avoiding the risk of potential costly litigation. Our Security Deposit Replacement tool replaces the costly security deposit with a much lower one-time fee. As a result, the renter is able to move in a more cost-effective manner, while the landlord is relieved of the burden of returning the security deposit in a timely manner.
Our other solutions help landlords and renters avoid costly legal disputes as well. With Lease Guarantee, landlords protect themselves against unpaid rent and avoid the costs associated with pursuing a renter for missed rent. With Renters Insurance Compliance, landlords can clearly and effectively communicate to their renters the right kind of coverage needed, while renters can easily comply.
All in all, the combination of these solutions in our risk management platform eliminates a large portion of potential liability disputes between the two parties.