Prior Landlord Must Turn Over Security Deposits to New Landlord

May 12, 2012

LVT Number: #24101

New landlord sued prior landlord in small claims court, claiming that prior landlord wrongfully withheld tenant security deposits when the building was transferred. Prior landlord claimed that there were no security deposits because he had used them to offset unpaid rents. The court ruled for new landlord only to the extent that prior landlord had improperly cashed checks totalling $1,270 after closing. New landlord appealed and won. Under General Obligations Law Section 7-105, prior landlord was required to turn over the tenant security deposits to new landlord and to so notify tenants.

New landlord sued prior landlord in small claims court, claiming that prior landlord wrongfully withheld tenant security deposits when the building was transferred. Prior landlord claimed that there were no security deposits because he had used them to offset unpaid rents. The court ruled for new landlord only to the extent that prior landlord had improperly cashed checks totalling $1,270 after closing. New landlord appealed and won. Under General Obligations Law Section 7-105, prior landlord was required to turn over the tenant security deposits to new landlord and to so notify tenants. The fact that there may have been unpaid rents to prior landlord wasn't a valid defense.

Perez v. Ruggiero: NYLJ, 4/26/12, p. 28, col. 2 (App. T.2 Dept.; LaCava, JP, Molia, Iannacci, JJ)

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