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.