NEEDED A SECURITY GUARD?
After tenants HV and OO sued their former landlord for the return of their security deposit, a New York County Civil Court judge awarded the couple a judgment in the amount of $10,089.00.
On appeal, the Appellate Term, First Department, noted that the landlord had “commingled” the money; that is, it failed to keep the funds in a segregated account, as required by New York law [General Obligations Law § 7—103(1)]. As a result of that lapse, the landlord “forfeited” any right to keep or use the proceeds “for any purpose,” and the tenants were entitled to the “immediate” return of their money.
Any purported lease repudiation by the tenants, did not excuse the landlord from complying with this law. And while “commingling” is curable, the appellate court's decision suggests that the landlord failed to do so in this instance, thus warranting the grant of relief in the tenants’ favor.
Looks like this landlord could have used a security blanket ….
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DECISION