1 Misc. 2d 756

When plaintiff was informed of the security being turned over to the purchasers, he brought this action for conversion against defendant. Defendant answered and also brought in the purchasers as third-party defendants, and then made the present motion to dismiss.
Section 233 of the Real Property Law provides that money deposited as security shall be held in trust ‘ ‘ but may be disposed of as provided in section thirteen hundred and two-a of the penal law.” The word “ tenant ” does not appear in the section and the language is broad enough to encompass the act of a security deposit by anyone “ on a contract for the use or rental of real property ”.
Section 1302-a of the Penal Law provides that an owner who has received “ from a tenant ” a deposit “ as security for the full performance by such tenant of the terms of his lease ” shall upon conveying the property deal with the security deposit in one of three ways: A. Turn over the sum deposited to his grantee and notify tenant by registered mail. B. Return the sum deposited to the tenant. O. Retain the sum deposited and notify tenant by registered mail. It is further provided that if A is adopted he is “ hereby relieved of and from liability to the tenant for the repayment thereof; and the transferee of such security deposit is hereby made responsible for the return thereof to the tenant ”.