A property manager holds a tenant's $1,800 security deposit in trust. The tenant vacates, and the landlord claims $300 in legitimate cleaning costs but is temporarily unreachable. Under New York General Obligations Law §7-108, what is the property manager's primary obligation?
Correct Answer
B) Return $1,500 to the tenant within the statutory deadline and hold the disputed $300 pending landlord authorization
Under NY General Obligations Law §7-108, a landlord — and by extension a property manager acting as the landlord's agent — must return the security deposit within 14 days of the tenant vacating, along with an itemized statement of any deductions. Failing to meet this deadline can cause the landlord to forfeit the right to make any deductions. The legally defensible approach is to return the undisputed portion ($1,500) to the tenant within the statutory period, while retaining only the disputed amount ($300) pending proper landlord authorization. This honors both the tenant's statutory right to timely return and the broker's agency duty not to disburse funds without client authorization.
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