75 Misc. 2d 900 | N.Y. City Civ. Ct. | 1973
The court on its own motion recalls the decision rendered in the above matter dated October 29,1973.
The plaintiff brought this action in the Small Claims Part of this court and seeks to recover interest in the sum of $22.26 on a security deposit given to his landlord on security on a lease.
Landlord and tenant had entered into a lease agreement in 1966, which agreement was renewed thereafter. Under the terms thereof, tenant had furnished security which increased as the rental set forth in the lease renewals increased. All of the security upon which plaintiff demands his interest was paid to and in the hands of the landlord on September 1,1970, the effective date of subdivision 2 of section 7-103 of the General Obligations Law.
Plaintiff relies on subdivision 2 of section 7-103 of the General Obligations Law the last sentence of which reads ‘ ‘ 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.” (Emphasis supplied.)
It is plaintiff’s contention that the interest must be paid annually. The court’s attention was directed to a letter issued in September, 1972, by the Attorney-General’s office which sets forth an informal opinion that security interest is payable annually to the tenant unless prior to that time the interest has been used in the reduction of rent. This letter also states that the Court of Appeals in a proceeding brought by the Attorney-General (Matter of State of New York v. Parker, 30 N Y 2d 964) to enforce compliance with the statute (in accordance with the informal opinion) stated that the Attorney-General had no standing to bring the proceeding and suggested tenants bring their own action in Small Claims Court.
The court notes that by way of suggestion from the Court of Appeals in the proceeding brought by the Attorney-General the court stated the tenants should bring their own action in the Small Claims Court. The inference to be drawn from the Court of Appeals’ suggestion is that the interest on security deposits must be paid to the tenants annually and if upon demand, payment of interest is not made, tenants may bring an action in the appropriate court for their relief. The court is impelled to conclude that interest accruing on a tenant’s security deposit in the amount in excess of the 1% landlord is permitted to retain should either be paid to the tenant1 annually, applied to the rent due, or held in trust if the tenant elects to leave the interest in the trust account. Accordingly plaintiff shall have judgment against the defendant in the sum of $22.26.