Ithaca Security Deposit Rules: What the Rental Housing Ordinance Adds to New York Law

A landlord in Ithaca has to satisfy two sets of rules at once: the New York statute, N.Y. Gen. Oblig. Law § 7-108, and the city's own Rental Housing Ordinance (Ithaca City Code § 258-4). The state law sets the 14-day return deadline after the day the tenant vacates; the local ordinance adds rules on receipt and itemization and rent-increase notice. Where the two overlap, the landlord has to meet the stricter one.

What the Rental Housing Ordinance adds

• Receipt and itemization: The ordinance requires the landlord to give the tenant a written receipt for the security deposit and to state in writing where the deposit is held and whether the account is interest-bearing. Only these elements are locally distinct: the separate duty to disclose the name and address of the banking organization already exists under NY General Obligations Law §7-103(2). (Code of the City of Ithaca §258-4)
• Other local rule: A landlord who willfully and without good cause withholds a security deposit may be ordered to pay up to triple the wrongfully withheld amount plus reasonable attorney's fees and court costs, and willfulness is presumed if the landlord misses the ordinance's 30-day deadline for returning the deposit or delivering a written statement of reasons. This exceeds state law, which caps willful-violation damages at twice the deposit and provides no fee-shifting (GOL §7-108(1-a)(g)). (Code of the City of Ithaca §258-7)
• Rent-increase notice: For rental terms of nine months or longer, a landlord must give the current tenant at least 120 days' written notice before renewing the rental agreement, showing the unit to a prospective new tenant, or signing a lease with a new tenant. This exceeds the 30/60/90-day statewide floor in NY Real Property Law §226-c and, unlike the state rule, applies regardless of the size of any rent increase. (Code of the City of Ithaca §258-10 (as amended 4-6-2022 by Ord. No. 2022-02))

Who it covers: Residential landlords and tenants in the City of Ithaca, outside rent-stabilized housing.
Worth knowing: Ithaca separately opted into New York's Good Cause Eviction law (Real Property Law art. 6-A) on July 10, 2024 by L.L. No. 1-2024 — that law does not otherwise apply outside New York City — and used the local options in it to define a "small landlord" as an owner of no more than one rental unit anywhere in the state, narrower than the ten-unit state default, so more landlords are covered. That is an eviction protection rather than a deposit rule or a rent cap; it sits at §§ 258-14 to 258-16. The code text behind this page was read from archived copies of the canonical ecode360 pages, because ecode360.com blocks automated requests.

What New York law already requires

• Return deadline: 14 days after the day the tenant vacates.
• Itemized deductions: required in writing. Since 2019 the landlord must return the deposit with an itemized statement within 14 days of move-out, and must offer a pre-move-out inspection.
• Forwarding address: not a statutory condition of getting the deposit back.
• Penalty for wrongful withholding: A landlord who willfully violates the statute forfeits the right to withhold and may owe punitive damages of up to twice the deposit.
• Deposit cap: One month's rent.
• Interest: Buildings with six or more units: the deposit must be held in an interest-bearing New York bank account; the landlord may keep 1% as an administrative fee.
• Small claims limit: $10,000. The $10,000 figure is the New York City Civil Court’s limit, not a statewide one. N.Y. City Civ. Ct. Act § 1801 defines a small claim as a cause of action “for money only not in excess of ten thousand dollars exclusive of interest and costs,” and only where the defendant resides, has an office for the transaction of business or regular employment within the City of New York, or — for a claim about a tenancy — the rental property is situated within the City of New York. A deposit claim over a rental outside the city is filed in a district, city, town or village court, where the small claims limit is lower. Check the limit of the court you would actually file in.
• Statute: N.Y. Gen. Oblig. Law § 7-108.

Using both rules together

1. Read the lease for the deposit amount, the move-in date, and any clause that mentions the ordinance.
2. Check the local rule first: receipt and itemization under Ithaca City Code § 258-4, then rent-increase notice.
3. Count the New York deadline of 14 days from the day the tenant vacates.
4. A written demand that cites both N.Y. Gen. Oblig. Law § 7-108 and Ithaca City Code § 258-4 carries more weight than one that cites either alone. A landlord who willfully violates the statute forfeits the right to withhold and may owe punitive damages of up to twice the deposit.

Frequently Asked Questions

Q: Does Ithaca require interest on security deposits?
A: The Rental Housing Ordinance does not add an interest rule, so New York law governs. Buildings with six or more units: the deposit must be held in an interest-bearing New York bank account; the landlord may keep 1% as an administrative fee.

Q: Is the Ithaca deposit return deadline different from New York law?
A: No. The Rental Housing Ordinance does not change the return deadline, so the New York rule applies: 14 days after the day the tenant vacates under N.Y. Gen. Oblig. Law § 7-108.

Q: Does the Rental Housing Ordinance apply to my unit?
A: Residential landlords and tenants in the City of Ithaca, outside rent-stabilized housing. Check the section cited below for the full list of exemptions before relying on it.

Q: Can I sue my landlord in small claims court for my New York deposit?
A: Yes. New York small claims court hears claims up to $10,000, which covers most deposits plus the statutory penalty. The $10,000 figure is the New York City Civil Court’s limit, not a statewide one. N.Y. City Civ. Ct. Act § 1801 defines a small claim as a cause of action “for money only not in excess of ten thousand dollars exclusive of interest and costs,” and only where the defendant resides, has an office for the transaction of business or regular employment within the City of New York, or — for a claim about a tenancy — the rental property is situated within the City of New York. A deposit claim over a rental outside the city is filed in a district, city, town or village court, where the small claims limit is lower. Check the limit of the court you would actually file in. A dated written demand that cites N.Y. Gen. Oblig. Law § 7-108 is the usual first exhibit.

Sources Checked

• Code of the City of Ithaca ch. 258 (Rental Housing) §§ 258-4 (receipt and disclosure), 258-7 (treble damages) and 258-10 (renewal notice); art. I adopted 10-7-1992 by Ord. No. 92-12 and redesignated 6-5-2013 by Ord. No. 2013-03; § 258-10 amended 4-6-2022 by Ord. No. 2022-02, Rental Housing Ordinance: code text, read 2026-09-20
• N.Y. Gen. Oblig. Law § 7-108 (the New York statute cited above)
• LeaseLenses New York deposit data set, last reviewed 2026-09-19; the same data powers the New York demand letter tool
• New York landlord-tenant overview and the New York deposit rules page

This page is general legal information for Ithaca, New York, not legal advice. Local ordinances are amended more often than state statutes; read the current code text before relying on a figure in court.