In the Matter of the State of New York, Petitioner, v. Jack Parker, Doing Business as Parman Co., et al., Respondents.
Supreme Court, New York County,
June 6, 1971.
Louis J. Lefkowitk, Attorney-General (Samuel A. Hershowits, Meyer H. Mencher, Robert Perm and Eugene P. O’Brien of counsel), for petitioner. Botein, Hays, SJclar & Hersberg {Bernard Botein, Howard L. Weinreieh, Harold R. Liebman, Arthur Kramer and Lawrence M. Kate of counsel), for respondents.
Myles J. Lane, J.
Motion Nos. 48 and 69 are consolidated and determined herein.
The Attorney-General initiates this proceeding pursuant to subdivision 12 of section 63 of the Executive Law to compel respondents engaged in the rental of housing accommodations to place security deposits of their tenants in an interest-bearing bank account. Respondents move to dismiss the petition for legal insufficiency.
The petition is based upon the recent amendment to section 7-103 of the General Obligations Law effective September 1, 1970, which provides in essence that security moneys received by the lessors of certain apartment units are to be deposited in interest-bearing accounts for the benefit of tenants.
The Attorney-General maintains that this amendment applies to security moneys received not only subsequent but prior to the effective date of the amendment. That respondents’ failure to deposit security moneys received by them prior to September 1, 1970 demonstrates persistent illegality within the purview and intent of subdivision 12 of section 63 of the Executive Law.