NYC Affordability

Key money is any payment a landlord, managing agent, or building employee demands from a prospective tenant beyond what state and city law actually allow to charge — commonly a cash “finder’s fee” for a rent-stabilized unit, or a payment just to get an application considered. It’s illegal in New York regardless of who asks for it or how it’s framed, and it’s treated legally as a form of rent overcharge, not a normal transaction cost.

A tenant who pays key money can file a complaint with the NYS Division of Housing and Community Renewal (DHCR) or bring a civil claim to get it back. If a court or DHCR finds the overcharge was willful — which key money demands usually are, since there’s no legitimate basis for them — the Housing Stability and Tenant Protection Act (HSTPA) requires treble damages: three times the amount improperly collected, looking back up to six years.

Worked example

A super demands $5,000 in cash to “hold” a rent-stabilized apartment before it’s even listed. That payment is key money. If the tenant reports it and a court finds it willful, the landlord owes $15,000 back — three times the original demand — rather than just returning the $5,000. Legitimate move-in costs are capped separately; see security deposits and move-in costs for what a landlord can actually charge.