Security Deposit - Condo Unit

From NYT from 2002 (so things may have changed)

http://query.nytimes.com/gst/fullpage.html?res=9C02E0D91039F934A25750C0A9649C8B63

Q. & A.; Getting Interest on Security Deposit
Published: March 17, 2002
Q I have been living in a rent-stabilized apartment. I just discovered that the managing agent removed my security deposit from an interest-bearing account three years ago. She has not responded to my requests for information as to the location of the money. Is there any law regarding security deposits? . . . Joseph Furey, the Bronx.

A Lucas Ferrara, a Manhattan landlord-tenant lawyer, said that by law, if a tenant resides in a building with six or more units, the security deposit must be placed in a separate interest-bearing account in a New York State bank. Mr. Ferrara said that the landlord is required to inform the tenant where the deposit is being held.

The tenant has the option of receiving the interest once a year, applying it to the rent or adding the interest to the amount on deposit.

By law, Mr. Ferrara said, when a security deposit is placed in an interest-bearing account, the landlord is entitled to deduct one percent of the amount on deposit as an administrative fee each year. So if a security deposit of $1,000 is on deposit, the landlord may deduct $10 of any interest received before providing the balance to the tenant.

If a landlord fails to maintain the security deposit as required by law, Mr. Ferrara said, the landlord may forfeit the right to hold the security. In such a case, he said, the tenant can demand that the deposit be returned.

If the landlord declines to return it, he said, the tenant can apply the amount on deposit to the next month's rent and use the landlord's failure to comply with the law as a defense in any legal proceeding the landlord may bring.

Landlords of single condo units are not obligated to segregate security deposits.

Nope