real property as security...such money, with interest accruing thereon...shall continue to be the
money of the person making such deposit...and shall be held in trust by the person with whom
such deposit...shall be made and shall not be mingled with the personal moneys or become an
asset of the person receiving the same...
(2) Whenever the person receiving money so deposited...shall deposit such money in a
banking organization, such person shall thereupon notify in writing each of the persons making
such security deposit...giving the name and address of the banking organization in which the
deposit of security money is made, and the amount of such deposit...
(3) Any provision of such a contract or agreement whereby a person who so deposits or
advances money waives any provision of this section is absolutely void.
It is clear from the language of the Lease and the statute that the Security and Utilities
Deposits are to be held in trust and not commingled with defendant's personal funds. It is also
clear, and undisputed, that defendant deposited the Security and Utilities Deposits into his
personal bank account, rather than in trust for plaintiff as required by GOL § 7-103(1).
Despite defendant's claim that the monies were segregated within his bank account, the
commingling of funds constitutes a conversion of the funds, calling for the immediate return of
the deposits. [*4]Leroy v Sayers, 217 AD2d 63, 69 (1st
Dep't 1995). Furthermore, the Sayers court stated that the stamped name of the bank on
the back of a cancelled check does not qualify as notice in writing as required by GOL §
7-103(2). Id. at 68-69. As such, defendant has violated GOL § 7-103 and forfeited
any right to avail himself of the Security Deposit for any purpose. Dan Klores Assocs. v