While counsel for Broadway LLC correctly cites 930 Fifth Ave. Corp. v Shearman (17 Misc 3d 1126[A] [Civ Ct,
NY County 2007]) for the proposition that the Civil Court does not have jurisdiction over
security deposits and that such funds cannot be recovered in a nonpayment proceeding, such case
is inapplicable to the instant matter.
In 930 Fifth Ave. Corp., the landlord consented to the tenant's use of an escrow
account for rent once the tenant stopped paying rent. After the funds in the escrow account were
entirely drawn down, the landlord in 930 Fifth Ave. Corp sought a possessory judgment
against tenant to replenish the escrow account and the tenant counterclaimed for an order
directing the landlord to return the funds to such account. Although the parties in 930 Fifth
Ave. Corp. agreed to treat the escrow account as additional rent, the court therein
determined that the account was a security deposit since the landlord was to use the funds to
ensure the tenant's compliance with the terms of the proprietary lease, to keep such funds in a
separate account, and to return same if the tenant sold the shares allocated to the cooperative
apartment. As such, the court concluded in 930 Fifth Ave. Corp., inter alia, that the
escrow account was a security deposit and, thus, not rent which is recoverable in a nonpayment
proceeding. Additionally, the court concluded in 930 Fifth Ave. Corp., inter alia,
that it had no jurisdiction to order the replenishment of funds to the escrow account or to direct
its return. Here, there is no claim that the security deposit at issue constitutes additional rent and
no request for the Court to return such funds.
In the instant case, petitioner may apply the security deposit to any rent owed, pursuant to