2010 New York Code
GOB - General Obligations
Article 7 - OBLIGATIONS RELATING TO PROPERTY RECEIVED AS SECURITY
Title 1 - (7-101 - 7-109) MONEY DEPOSITED AS SECURITY TO BE HELD IN TRUST IN CERTAIN CASES
7-108 - Liability of a grantee or assignee for deposits made by tenants upon conveyance of non-rent stabilized dwelling units.

§ 7-108. Liability  of  a  grantee  or  assignee  for deposits made by
  tenants upon conveyance of non-rent stabilized dwelling units.  1.  This
  section  shall  apply  to  all  dwelling  units  with  written leases in
  residential premises containing six or more dwelling units  and  to  all
  dwelling  units  subject  to the city rent and rehabilitation law or the
  emergency housing  rent  control  law,  unless  such  dwelling  unit  is
  specifically referred to in section 7-107 of this chapter.
    2.  (a)  In circumstances where any sum of money or any other thing of
  value deposited as security for the full performance by a tenant of  the
  terms  of  his  lease  is  not  turned  over  to a successor in interest
  pursuant to section 7-105 of this chapter, the grantee  or  assignee  of
  the leased premises shall also be liable to such tenant, upon conveyance
  of such leased premises, for the repayment of any such security deposit,
  plus  accrued  interest, as to which such grantee or assignee has actual
  knowledge.
    (b) For purposes of this section, a grantee or assignee of the  leased
  premises  shall  be  deemed  to  have  actual  knowledge of any security
  deposit which is (i)  deposited  at  any  time  during  the  six  months
  immediately  prior  to closing or other transfer of title in any banking
  organization pursuant to subdivision two-a  of  section  7-103  of  this
  chapter,  or  (ii)  acknowledged  in  any lease in effect at the time of
  closing or other transfer of title, or (iii)  supported  by  documentary
  evidence  provided by the tenant or lessee as set forth in paragraph (c)
  of this subdivision.
    (c) With respect to any leased premises for which there is  no  record
  of  security  deposit  pursuant to subparagraph (i) or (ii) of paragraph
  (b) of this subdivision, the grantee or assignee of the leased  premises
  shall be obligated to notify the tenant thereof in writing no later than
  thirty days following the closing or other transfer of title to the fact
  that  there  is no record of a security deposit for said leased premises
  and that unless the tenant within thirty  days  after  receiving  notice
  provides  him  or  it  with  documentary evidence of deposit, the tenant
  shall have no further recourse against  him  or  it  for  said  security
  deposit.  For purposes of this subdivision, "documentary evidence" shall
  be limited to any cancelled check drawn to the order of, a receipt from,
  or a lease signed by any predecessor in interest, if such  predecessor's
  interest  in  the leased premises existed on or after the effective date
  of this section. Except as otherwise provided by subparagraphs  (i)  and
  (ii) of paragraph (b) of this subdivision the grantee or assignee of the
  leased  premises  shall  not  be  charged  with  actual knowledge of the
  security deposit where the tenant fails within the thirty-day period  to
  provide  said documentary evidence. Where the grantee or assignee of the
  leased premises  fails  to  notify  the  tenant  as  specified  in  this
  paragraph  within thirty days following the closing or other transfer of
  title, the tenant shall be entitled to produce documentary  evidence  at
  any time.
    (d)  The  grantee  or  assignee  of the leased premises shall have the
  right to demand that the grantor or assignor thereof establish an escrow
  account equal to one month's rent for  any  leased  premises  for  which
  there  is  no  record of a security deposit pursuant to paragraph (b) of
  this subdivision to be used for the  purpose  of  holding  harmless  the
  grantee  or  assignee  in  any  case  where, at a date subsequent to the
  closing or other transfer of title, the tenant gives notice pursuant  to
  paragraph (c) of this subdivision.
    (e)  The  liability  of a receiver for payment of any security deposit
  plus accrued interest pursuant to this subdivision shall be  limited  to
  the amount of such deposit actually turned over to him or it pursuant to
  subdivision  one  of  section 7-105 of this chapter and to the operating

income in excess of expenses generated  during  his  or  its  period  of
  receivership.
    3.  Any  agreement  by  a  lessee  or  tenant of a dwelling waiving or
  modifying his rights as set forth in this section  shall  be  absolutely
  void.