recover not only the principal amount of the security deposit, but also any interest accrued on the
security deposit while it was in the interest-bearing account (cf. Holmes v Worthen, 19 Misc 3d 33, 35 [App Term, 2d Dept, 2d,
11th & 13th Jud Dists 2008]).
However, a landlord of a rent-stabilized apartment is entitled to keep, as an administrative
fee, "a sum equivalent to one percent per annum upon the security money so deposited" (Rent
Stabilization Code [9 NYCRR] 2525.4 [b]). At the tenant's option, the remaining balance of the
accrued interest may be paid annually to the tenant (id.). Here, claimant did not establish
that there was any unpaid accrued interest on her security deposit at the time she vacated the
apartment. The evidence at trial indicated that defendant kept a portion of the accrued interest,
and the remaining portion was paid annually to claimant.
Claimant is entitled to prejudgment interest on $1,327.93 at the rate of 9% per annum, from
January 15, 2021, the earliest ascertainable date that the cause of action existed—i.e., the
date when claimant was entitled to the full amount of the deposit and could therefore sue
defendant for not returning the deposit (see Gihon, LLC v 501 Second St., LLC, 103 AD3d 840, 842-43 [2d
Dept 2013]; see also 23 E. 39th St. Mgt.
Corp. v 23 E. 39th St. Dev., LLC, 134 AD3d 629, 632 [1st Dept 2015] [tenant was
entitled to interest on the full security deposit from the date of its conversion]; 56 Bogart St., LLC v Vandyke, 60
Misc 3d 135[A], 2018 NY Slip Op 51063[U] [App Term, 2d Dept, 2d, 11th & 13th Jud
Dists 2018]).
As to punitive damages,
"[p]unitive damages are permitted when the defendant's wrongdoing is not simply
intentional but evinces a high degree of moral turpitude and demonstrates such wanton