1. (a) if the demand, collection or retention of such security deposit was permitted under the rent regulations promulgated pursuant to the Federal Act, the State Rent Law or the local laws of the City of New York, and said security deposit does not exceed the rent for one month in addition to the authorized collection or rent; or

2. (b) if the demand, collection or retention of such security deposit was pursuant to a rental agreement with the tenant, and said security deposit does not exceed the rent for one month (or for one week where the rental payment period is for a term of less than one month) in addition to the authorized collection of rent, provided in all cases:

   1. (1) that said security deposit shall be deposited in a banking organization no later than July 15, 1960, or within 15 days after receipt thereof, whichever is later, which shall be placed in an interest-bearing account on or before October 1, 1974 or the date of any deposit made thereafter;
   2. (2) the person depositing such security money shall be entitled to receive, as reimbursement for administrative expenses, a sum equivalent to one percent per annum upon the security money so deposited;

   3. (3) the balance of the interest paid by the banking organization shall be held in trust until applied for the rental of the housing accommodations, or until paid to the tenant not less often than annually by check or cash;

      and provided further, with respect to properties or building containing six or more family dwelling units, nothing set forth in this section shall be construed to relieve any person receiving or retaining any rent security deposit for or in connection with the use or occupancy of any dwelling unit therein from complying and continuing to comply with the requirements of article 7 of the General Obligations Law.

Regardless of any contract, agreement, lease or other obligation heretofore or hereafter entered into, no person shall demand, receive or retain a security deposit for or in connection with the use and occupancy of housing accommodations, except: