Security Deposits as Trust Funds (GOL §7-103)

N.Y. General Obligations Law § 7-103

Money deposited as security for the use or rental of real property continues to be the tenant's money and must be held in trust by the landlord; it may not be commingled with the landlord's personal funds and may not become an asset of the landlord. For buildings containing six or more family dwelling units, the deposit must be placed in an interest-bearing account in a banking organization within New York State earning the prevailing rate; the landlord may retain one percent per annum of the deposit as administration expenses, and the balance of the interest belongs to the tenant. Any agreement by which the depositor waives the protections of this section is absolutely void.