N.Y. General Obligations Law § 7-105

Turn over deposit within five days:N.Y. Gen. Oblig.§ 7-105

Sold or foreclosed: landlord must turn over security deposit to new owner within five days, notify tenant by certified mail. Failure is misdemeanor.

Official text N.Y. General Obligations Law § 7-105 — New York

§ 7-105. Landlord failing to turn over deposits made by tenants or licensees and to notify tenants or licensees thereof in certain cases. 1. Any person, firm or corporation and the employers, officers or agents thereof, whether the owner or lessee of the property leased, who or which has or hereafter shall have received from a tenant or licensee a sum of money or any other thing of value as a deposit or advance of rental as security for the full performance by such tenant or licensee of the terms of his lease or license agreement, or who or which has or shall have received the same from a former owner or lessee, shall, upon conveying such property or assigning his or its lease to another, or upon the judicial appointment and qualifying of a receiver in an action to foreclose a mortgage or other lien of record affecting the property leased, or upon the conveyance of such property to another person, firm or corporation by a referee in an action to foreclose a mortgage or other lien of record affecting the property leased if a receiver shall not have been appointed and qualified in such action, at the time of the delivery of the deed or instrument or assignment or within five days thereafter, or within five days after the receiver shall have qualified, deal with the security deposit as follows:

Turn over to his or its grantee or assignee, or to the receiver in the foreclosure action, or to the purchaser at the foreclosure sale if a receiver shall not have been appointed and qualified the sum so deposited, and notify the tenant or licensee by registered or certified mail of such turning over and the name and address of such grantee, assignee, purchaser or receiver.

  • 2. Any owner or lessee turning over to his or its grantee, assignee, to a purchaser of the leased premises at a foreclosure sale, or to the receiver in the foreclosure action the amount of such security deposit is hereby relieved of and from liability to the tenant or licensee for the repayment thereof; and the transferee of such security deposit is hereby made responsible for the return thereof to the tenant or licensee, unless he or it shall thereafter and before the expiration of the term of the tenant's lease or licensee's agreement, transfer such security deposit to another, pursuant to subdivision one hereof and give the requisite notice in connection therewith as provided thereby. A receiver shall hold the security subject to such disposition thereof as shall be provided in an order of the court to be made and entered in the foreclosure action. The provisions of this section shall not apply if the agreement between the landlord and tenant or licensee is inconsistent herewith.
  • 3. Any failure to comply with this section is a misdemeanor.

Text as published in the 2026 snapshot of the code.

Source: Vaquill Open US Law, compiled from official state publishers (huggingface.co), reproduced under license CC BY 4.0.

Read this provision at the official source →

What it actually says

This section governs the handover. Anyone who holds a tenant's or licensee's security deposit - owner or lessee, and whether the money came from the tenant or from a former owner - must, on conveying the property or assigning the lease, or on a receiver being appointed in a foreclosure, or on a referee's conveyance where no receiver was appointed, do two things: turn the deposit over to the grantee, assignee, receiver or foreclosure purchaser, and notify the tenant by registered or certified mail of the transfer and of the name and address of the person who now holds the money. The timing is tight: at the delivery of the deed or assignment or within five days after, or within five days after the receiver qualifies.

Subdivision 2 explains why a landlord would bother. Turning the deposit over relieves the transferor of liability to the tenant for repaying it, and makes the transferee responsible for its return - unless that transferee in turn passes it on under subdivision 1 and gives the same notice. A receiver holds the deposit subject to whatever the court orders in the foreclosure action. The same subdivision contains a limit that is easy to miss: the section does not apply if the agreement between landlord and tenant is inconsistent with it.

Subdivision 3 states the consequence of ignoring the section: any failure to comply is a misdemeanor. It is worth reading this section next to § 7-108(2), which approaches the same problem from the tenant's side by making a buyer liable for deposits it has actual knowledge of, and defines what counts as knowledge.

When it applies

  • The building is sold and the new owner says the deposit was never passed on to it.
  • A tenant receives no notice of who now holds the deposit after a change of ownership.
  • The building goes into foreclosure and a receiver is appointed mid-tenancy.
  • A tenant is asked at the end of the lease to chase the previous owner for the deposit.
  • A managing agent transfers deposits to a new owner without writing to the tenants.

What this section does not say

  • It does not tell the tenant what to deduct or when the deposit comes back. That is § 7-108.
  • It does not by itself make the buyer liable where nothing was handed over. The tenant's route against a new owner runs through § 7-108(2) and its actual-knowledge test.
  • It can be displaced by agreement. Subdivision 2 says the section does not apply where the landlord-tenant agreement is inconsistent with it.
  • A misdemeanor is a criminal characterization. The section does not itself award the tenant damages or a penalty.

Worked examples

Invented situations, written to show how the wording bites. They are not real cases, not judgments and not precedent, and nothing here predicts what would happen in yours.

Illustrative example

A building changes hands in the middle of a tenancy. A year later, when the tenant moves out, the new owner says the deposit was never passed on and that it is the previous owner's problem.

How the wording applies

The section puts the duty on the transferor: turn the deposit over to the grantee and notify the tenant by registered or certified mail of the transfer and of the name and address of the new holder, at delivery of the deed or within five days after. Handing it over is what relieves the transferor of liability for repaying it. But the tenant's route against a new owner runs through § 7-108(2) and its actual-knowledge test, so it turns on what the buyer knew about the deposits at closing.

How the parties settled it

The two owners agree between themselves who bears it, the tenant is repaid in full within a fortnight by whichever of them holds the money, and the tenant is not asked to chase either of them again.

Illustrative example

The building goes into foreclosure and a receiver is appointed halfway through a tenancy. The tenant, who has heard nothing from anyone, wants to know who is now holding their money.

How the wording applies

The section covers this case expressly: the deposit is turned over to the receiver, the tenant is notified by registered or certified mail within five days after the receiver qualifies, and the receiver holds the deposit subject to whatever the court directs in the foreclosure action. The date the receiver qualified is what the five days run from.

How the parties settled it

The receiver writes to every tenant with the account details and a schedule of what is held for each unit, and the tenants agree to direct deposit questions to the receiver rather than to the former owner.

Illustrative example

A landlord selling a small building points to a clause in its leases setting out its own arrangement for deposits on a sale, and says the statutory route does not apply to him.

How the wording applies

Subdivision 2 contains that limit in terms: the section does not apply if the agreement between landlord and tenant is inconsistent with it. So the argument turns on the wording of the lease clause and whether it is genuinely inconsistent - and where the section does apply, the consequence of ignoring it is that non-compliance is a misdemeanor, which is a criminal characterization rather than a payment to the tenant.

How the parties settled it

Buyer and seller agree the deposits transfer at closing against a signed schedule unit by unit, and every tenant receives a letter naming the new holder, whatever the lease clause says.

How courts have read it

Decisions construing this provision. The question and the summary are ours; the quoted sentence is the court's own words, taken from the published opinion. These are the decisions in our corpus, not every decision there is, and nothing here predicts any other case. Reported 2003 to 2017.

130 Remsen LLC v. Commercial Investigations LLC, 57 Misc. 3d 678 (2017)

trial courts

What the court had to decide

Was a successor landlord who did not receive the security deposit from the original landlord liable for its return under GOB § 7-105?

What it held

The successor landlord is not liable for the return of the security deposit under GOB § 7-105 because the deposit was not transferred to it, but it may become liable by contract if it assumes the obligations of the lease.

In the court's words
Therefore, since the security deposit was not transferred to the foreclosure sale purchaser (Remsen), neither Remsen nor any subsequent owner/lessor has liability to Commercial for the deposit’s return unless the lease provides to the contrary (Matter of Central Sav. Bank v Fashoda, 94 AD2d 927, 928 [3d Dept 1983], affd 62 NY2d 721 [1984]).

Gerel Corp. v. Prime Eastside Holdings, LLC, 12 A.D.3d 86 (2004)

Appellate Division

What the court had to decide

whether plaintiffs, the successor landlords to which the three subject properties had been surrendered when defendants, the net lessees, defaulted on their lease obligations, have a private right of action under General Obligations Law § 7-105 to recover the tenants' security deposits

What it held

The court held that successor landlords have a private right of action under General Obligations Law § 7-105 to recover tenant security deposits from a prior landlord who failed to turn them over.

In the court's words
General Obligations Law § 7-105 provides plaintiffs with a civil remedy to recover the security deposits.

Source: Caselaw Access Project, CC0 1.0 Universal (public domain dedication).

Related sections

N.Y. General Obligations Law § 7-108 GOL § 7-108: one month's security, itemized in fourteen days N.Y. General Obligations Law § 7-103 Money Held in Trust: N.Y. General Obligations Law § 7-103

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We copy this text from the official publisher and re-check it against that source on every page load, but we cannot guarantee it is complete, current or free of error, and we accept no liability for any reliance on it. An amendment can take effect before a consolidation catches up. The publisher's own copy is linked below; where the two differ, it is the official one that counts.

This page reproduces the text of N.Y. General Obligations Law § 7-105 in force at the date shown and explains it in general terms. It is not legal advice and takes no account of the circumstances of your case, which can change the answer completely. For a live dispute, for limitation periods, and before taking any step in court, consult a qualified lawyer in New York.

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