When a tenant breaks a lease and stops paying, you want the rent, and you want it without a fight. The usual safety nets don’t deliver. A security deposit gives you one month’s rent to split between the unpaid rent and the repairs. A personal guarantor gives you the right to sue someone’s parent in another state.
With PandaGuarantee as your rent guarantor, coverage includes that unpaid rent, and claims are paid in only 3 business days. This protection is free to landlords. The tenant pays the premium.
Here’s what that looks like in an example Brooklyn move-out.
The math on one bad move-out
A tenant gives notice in March, then stops paying. “Just keep the deposit,” they tell you. They leave on the 31st. At the buildings we work with, a ready unit in the outer boroughs takes about 30 days to re-lease. At the walk-through you find a gouged floor and a cracked countertop.
At Brooklyn’s median asking rent of $3,990:
- Skipped last month: $3,990
- 30 days to re-lease: about $3,935
- Repairs: whatever the walk-through finds
You’re owed $7,925 in rent, plus repairs. You’re holding a $3,990 deposit.
Most tenants who break a lease pay through move-out, and the deposit covers the gap. Job relocation is the top reason New Yorkers leave early, according to Leasebreak. This is about the ones who stop paying.
Can a landlord use a security deposit for unpaid rent in New York?
Yes. You can apply it to unpaid rent or to damage beyond normal wear and tear. But it’s one pot of money, capped at one month’s rent, and you have 14 days after move-out to send an itemized statement or you forfeit all of it.
So you pick which bill the deposit pays. Put it toward the rent, and the repairs are on you. Put it toward the repairs, and the rent goes uncollected. Either way, the rest is a balance owed by someone who has already moved.
Why a personal guarantor doesn’t solve it
On paper, a personal guarantor owes that balance. To collect it, you have to find them, serve them and win in court, often against someone out of state. Then you still have to collect the judgment. That’s a lot of work for a $4,000 balance. (More on this in our co-signer alternatives post.)
What PandaGuarantee changes
With PandaGuarantee on the lease, coverage can include the unpaid rent. You file the claim online, and claims are paid in 3 business days. Your deposit stays available for repairs.
For each bad move-out, that keeps this off your books:
- Brooklyn: $3,935 to $7,925
- Queens: $3,350 to $6,750
- Manhattan: $1,150 to $6,145
The low end is a tenant who left no damage. The high end is damage of a month’s rent or more. Manhattan units re-lease in about a week, so there most of the exposure is the damage.
What it asks of you
It costs you nothing. PandaGuarantee is free to landlords, and tenants pay about 20% less than with other guarantor services.
The admin is light. You register your building once. When an applicant needs a rent guarantor, you invite them to apply, and most get a decision in minutes. The bond arrives by email. If a tenant stops paying, you file online and get paid in 3 business days.
What it won’t do
PandaGuarantee doesn’t pay for the turn. Cleaning, paint and listing are still yours, and so is any damage beyond the deposit. What changes is the rent: the one bill you can’t count on collecting from a tenant who has moved.
Protect the deposit you have
- Document move-in condition with dated photos and a signed checklist.
- Offer a walk-through before move-out. New York gives tenants the right to request one, and it’s your best chance to get problems fixed before they become deductions.
- Send the itemized statement well inside 14 days. If it’s late, you lose the whole deposit.
The number to pull
Go through your last year’s move-outs. Find the ones where the deposit ran out before the bills did, and add up what you wrote off. If that number bothers you, talk to us.