N.Y. Laws » CHAPTER General Obligations / ARTICLE Obligations Relating to Property Received As Security / TITLE Money Deposited As Security to Be Held In Trust In Certain Cases
New York Consolidated Laws

N.Y. General Obligations Law § 7-103 (2026)

Money deposited or advanced for use or rental of real property; waiver void; administration expenses

✓ current as of May 2026
Find cases: SyfertCases citing this section NY-LEGnysenate.gov Justiaon Justia CornellLII Search CasesGoogle Scholar 
§ 7-103. Money deposited or advanced for use or rental of real
property; waiver void; administration expenses. 1. Whenever money shall
be deposited or advanced on a contract or license agreement for the use
or rental of real property as security for performance of the contract
or agreement or to be applied to payments upon such contract or
agreement when due, such money, with interest accruing thereon, if any,
until repaid or so applied, shall continue to be the money of the person
making such deposit or advance and shall be held in trust by the person
with whom such deposit or advance shall be made and shall not be mingled
with the personal moneys or become an asset of the person receiving the
same, but may be disposed of as provided in section 7-105 of this
chapter.
  2. Whenever the person receiving money so deposited or advanced shall
deposit such money in a banking organization, such person shall
thereupon notify in writing each of the persons making such security
deposit or advance, giving the name and address of the banking
organization in which the deposit of security money is made, and the
amount of such deposit. Deposits in a banking organization pursuant to
the provisions of this subdivision shall be made in a banking
organization having a place of business within the state. If the person
depositing such security money in a banking organization shall deposit
same in an interest bearing account, he shall be entitled to receive, as
administration expenses, a sum equivalent to one per cent per annum upon
the security money so deposited, which shall be in lieu of all other
administrative and custodial expenses. The balance of the interest paid
by the banking organization shall be the money of the person making the
deposit or advance and shall either be held in trust by the person with
whom such deposit or advance shall be made, until repaid or applied for
the use or rental of the leased premises, or annually paid to the person
making the deposit of security money.
  2-a. Whenever the money so deposited or advanced is for the rental of
property containing six or more family dwelling units, the person
receiving such money shall, subject to the provisions of this section,
deposit it in an interest bearing account in a banking organization
within the state which account shall earn interest at a rate which shall
be the prevailing rate earned by other such deposits made with banking
organizations in such area.
  2-b. In the event that a lease terminates other than at the time that
a banking organization in such area regularly pays interest, the person
depositing such security money shall pay over to his tenant such
interest as he is able to collect at the date of such lease termination.
  3. Any provision of such a contract or agreement whereby a person who
so deposits or advances money waives any provision of this section is
absolutely void.
  4. The term "real property" as used in this section is co-extensive in
meaning with lands, tenements and hereditaments.
Notes of Decisions
Cited in 71 cases (17 in the last 5 years), 1983–2026 · leading case: LeRoy v. Sayers, 217 A.D.2d 63 (N.Y. App. Div. 1st Dep't 1995).
Sort: Relevance Newest Treatment
LeRoy v. Sayers, 217 A.D.2d 63 (N.Y. App. Div. 1st Dep't 1995). · cites it 7× “is action against defendant to recover his $50,000 advance rent payment and the $13,500 security deposit, alleging six causes of action: a violation of Real Property Law § 227 based on defendant’s refusal to return the funds; a breach of the lease’s provisions regarding the…”
Tappan Golf Drive Range, Inc. v. Tappan Prop., Inc., 68 A.D.3d 440 (N.Y. App. Div. 1st Dep't 2009). · cites it 4× “However, General Obligations Law § 7-103 (1) forbids landlords from commingling security deposit monies with their own funds, and defendant’s admitted commingling of plaintiffs security deposit vested in plaintiff an “immediate right” to receive those monies (LeRoy v Sayers, 217…”
Paterno v. Carroll, 75 A.D.3d 625 (N.Y. App. Div. 2d Dep't 2010). · cites it 4× “When Paterno failed to return it, the Carrolls commenced an action in the District Court, Nassau County, alleging that Paterno had commingled their security deposit with his personal funds in violation of General Obligations Law § 7-103. Paterno asserted a counterclaim to…”
State v. Wolowitz, 96 A.D.2d 47 (N.Y. App. Div. 2d Dep't 1983). · cites it 2× “Finally, Special Term was of the opinion that the Attorney-General lacked standing to contest the rent security clause and that, in any case, that clause did not violate the law since, “[b]y accepting the lease, the tenants have voluntarily selected one of the options conferred…”
Eujoy Realty Corp. v. Van Wagner Commc'ns, LLC, 73 A.D.3d 546 (N.Y. App. Div. 1st Dep't 2010). · cites it 9× “Where a lease requires the tenant to pay the rent in advance, the tenant is obligated to pay the entire amount even though the lease is subsequently terminated before the lease term expires (see 1251 Ams.”
Harlem Capital Ctr., LLC v. Rosen & Gordon, LLC, 145 A.D.3d 579 (N.Y. App. Div. 1st Dep't 2016). · cites it 2× “Plaintiff failed to make a prima facie showing of entitlement to judgment on the conversion claim as the bank statement showing that the alleged security deposit was held in equities and fixed income investments does not clearly demonstrate a violation of General Obligations Law…”
Shandwick USA, Inc. v. Exenet Tech., Inc., 192 Misc. 2d 280 (N.Y. City Civ. Ct. 2002). · cites it 7× “In seeking return of the funds, respondent claims that petitioner violated the statutory requirements of General Obligations Law § 7-103 in that it failed to notify respondent where and in what account number the funds were placed, thus creating the inference that it commingled…”
Milkie Ex Rel. JCR Fitness v. Guzzone, 143 A.D.3d 863 (N.Y. App. Div. 2d Dep't 2016). · cites it 3× “The plaintiff commenced this action, inter alia, to recover the security deposit alleging, under the fourth cause of action, a violation of General Obligations Law § 7-103. The defendants denied the allegations of the complaint and asserted counterclaims seeking to recover the…”
Eujoy Realty Corp. v. Van Wagner Commc'ns, LLC, 4 N.E.3d 336 (N.Y. 2013). “Putting aside considerations of preservation, the dissenters concluded on the merits that General Obligations Law § 7-103, which prohibits the commingling by a landlord of funds deposited by a tenant as security or prepaid rent, would prevent Eujoy’s recovery, and that Eujoy…”
Hamilton v. Bosko, 54 Misc. 3d 386 (2016). · cites it 3× “In particular, General Obligations Law § 7-103 (1) provides in pertinent part that “[w]henever money shall be deposited .”
Jimenez v. Henderson, 144 A.D.3d 469 (N.Y. App. Div. 1st Dep't 2016). · cites it 3× “Supreme Court properly granted tenant’s motion for summary judgment on his counterclaim for return of his $58,000 security deposit that landlords admittedly, improperly commingled, in violation of General Obligations Law § 7-103 (1). However, the court erred in staying entry of…”
Finnerty v. Freeman, 176 Misc. 2d 220 (N.Y. App. Term. 1998). · cites it 2× “General Obligations Law § 7-103 (1) provides that a security deposit “shall continue to be the money of the person making such deposit or advance and shall be held in trust by the person with whom such deposit or advance shall be made and shall not be mingled with the personal…”
Show all 71 citing cases →
N.Y. General Obligations Law § 7-103(1): 4 cases
Matter of People of the State of New York v. Cohen, 2023 NY Slip Op 01149 (N.Y. App. Div. 1st Dep't 2023).
Gonzales v. Verna, 2024 NY Slip Op 24114 (2024).
Baffour v. Calenda, No. 2020 NYSlipOp 50386(U) (N.Y. App. Term. Apr. 3, 2020).
Nazor v. Sydney Sol Grp., Ltd., 2025 NY Slip Op 03295 (N.Y. App. Div. 1st Dep't 2025).
N.Y. General Obligations Law § 7-103(2): 2 cases
Baffour v. Calenda, No. 2020 NYSlipOp 50386(U) (N.Y. App. Term. Apr. 3, 2020).
Schottenstein v. Axia Realty, LLC, 2026 NY Slip Op 30948(U) (N.Y. Sup. Ct., New York Cty. 2026).
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.