Ithaca, N.Y., Code of Ordinances ch. 258 § 258-3
Ownership of security deposit; trust provisions
Operative Text
Whenever a tenant shall deposit with the landlord a security deposit, such deposit, or any portion thereof, until repaid or rightfully applied for obligations of the tenant to the landlord, shall continue to be the money of the tenant and shall be held in trust by the landlord with whom such deposit shall be made and shall not be mingled with the personal moneys or become an asset of the landlord.
Under Ithaca, N.Y., Code of Ordinances ch. 258 § 258-3, a security deposit paid by a tenant does not become the landlord's property simply because it has been handed over. The money legally remains the tenant's until it is either returned or legitimately applied toward a valid obligation. The landlord is required to hold it in a trust-like capacity, keeping it entirely separate from personal or business funds.
Plain English — not legal advice.
Compliance with ch. 258 § 258-3 generally means maintaining any security deposit in a dedicated account that is clearly segregated from operating funds, personal accounts, or any other assets of the property owner or management company. Operators typically document the account separately and avoid drawing on those funds for any purpose other than a rightful application against a tenant's obligations. Treating the deposit as business income or commingling it with other funds is inconsistent with the trust obligation the ordinance imposes.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 258-3 of the Ithaca Code establishes that your security deposit remains your money throughout the tenancy and cannot be treated as the landlord's asset or mixed with the landlord's personal funds. If you have reason to believe a landlord has commingled or misappropriated a deposit, that conduct may constitute a violation of this provision, which could be relevant if a dispute arises over the return of funds. Tenant-rights organizations in the Ithaca area can help explain what documentation to gather and what local or state avenues may be available for addressing such concerns.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated November 7, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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