. For a history of the New York treatment of security deposits, see Park Holding Co. v Johnson (106 Misc 2d 834, 835-837 [Civ Ct, NY County 1980, Dankberg, J.]), which tracks the changes from the common-law view as set forth in Matter of Atlas v Moritz (217 App Div 38, 42 [4th Dept 1926]), through the 1935 enactment of Real Property Law § 233, and the reenactment and recodification of substantially similar provisions in General Obligations Law § 7-103. For a review of the nationwide status of security deposit laws, see John E Ludington, Annotation, Landlord-Tenant Security Deposit Legislation, 63 ALR4th 901.
. If the tenant remains in possession and has not sued to recover the deposit, a landlord has the opportunity to cure (Milton R. Friedman, Friedman on Leases § 20.4 [Nature of Security Deposit—Statutes], at 1293 [4th ed, PLI 1997] [“Commingling by landlord is a conversion, which gives tenant an immediate right to recover the deposit without offset by reason of any claim by landlord. Landlord’s right to the security is revived if the commingling ceases before tenant brings an action to recover the deposit. But segregation after expiration of the term and vacation by tenant is held too late for such revival”]; see, as to bankruptcy treatment, In re Spinelli, 36 BR 819, 821 [Bankr ED NY 1984] [“However, if a landlord restores and segregates the once-commingled funds prior to bankruptcy or prior to an action having been commenced for the conversion, the statutory ‘trust’ may be reinstated, and the tenant or trustee in bankruptcy will no longer possess a cause of action for the conversion”]).