§ 7-103 — Money deposited or advanced for use or rental of real property; waiver void; administration expenses

New York § 7-103

• Jurisdiction: New York
• Law GOB: General Obligations
• Title 1: Money Deposited As Security to Be Held In Trust In Certain Cases
• Art. 7: Obligations Relating to Property Received As Security

Text

§ 7-103. Money deposited or advanced for use or rental of real\nproperty; waiver void; administration expenses. 1. Whenever money shall\nbe deposited or advanced on a contract or license agreement for the use\nor rental of real property as security for performance of the contract\nor agreement or to be applied to payments upon such contract or\nagreement when due, such money, with interest accruing thereon, if any,\nuntil repaid or so applied, shall continue to be the money of the person\nmaking such deposit or advance and shall be held in trust by the person\nwith whom such deposit or advance shall be made and shall not be mingled\nwith the personal moneys or become an asset of the person receiving the\nsame, but may be disposed of as provided in section 7-105 of this\nchapter.\n 2. Whenever the person receiving money so deposited or advanced shall\ndeposit such money in a banking organization, such person shall\nthereupon notify in writing each of the persons making such security\ndeposit or advance, giving the name and address of the banking\norganization in which the deposit of security money is made, and the\namount of such deposit. Deposits in a banking organization pursuant to\nthe provisions of this subdivision shall be made in a banking\norganization having a place of business within the state. If the person\ndepositing such security money in a banking organization shall deposit\nsame in an interest bearing account, he shall be entitled to receive, as\nadministration expenses, a sum equivalent to one per cent per annum upon\nthe security money so deposited, which shall be in lieu of all other\nadministrative and custodial expenses. The balance of the interest paid\nby the banking organization shall be the money of the person making the\ndeposit or advance and shall either be held in trust by the person with\nwhom such deposit or advance shall be made, until repaid or applied for\nthe use or rental of the leased premises, or annually paid to the person\nmaking the deposit of security money.\n 2-a. Whenever the money so deposited or advanced is for the rental of\nproperty containing six or more family dwelling units, the person\nreceiving such money shall, subject to the provisions of this section,\ndeposit it in an interest bearing account in a banking organization\nwithin the state which account shall earn interest at a rate which shall\nbe the prevailing rate earned by other such deposits made with banking\norganizations in such area.\n 2-b. In the event that a lease terminates other than at the time that\na banking organization in such area regularly pays interest, the person\ndepositing such security money shall pay over to his tenant such\ninterest as he is able to collect at the date of such lease termination.\n 3. Any provision of such a contract or agreement whereby a person who\nso deposits or advances money waives any provision of this section is\nabsolutely void.\n 4. The term "real property" as used in this section is co-extensive in\nmeaning with lands, tenements and hereditaments.\n