It is also worth noting that there is a significant distinction at common law between the return of a security deposit, which is a covenant that does not run with the land, and the benefit of a security deposit, which is a covenant that does run with the land. (Halsted v Globe Indem Co, 258 NY 176 [1932][Pound, J.]; Donnelly v Rosoff, 164 Misc 384, supra; Stellar Holding Corp v Berns, 143 Misc 781 [App Term 1st Dept 1932].)
Respondent's argument, that petitioner is liable to return the security deposit pursuant to the parties' lease agreement, lacks merit. Paragraph 31, the relevant provision of the lease, closely mirrors the language in General Obligations Law § 7-105[2] which states that once the predecessor owner/lessor transfers or otherwise conveys the security deposit to its successor, the former owner is free from liability to the tenant for the repayment of the security. By implication, then, if the predecessor does not transfer the security to its successor, the predecessor remains liable for its return. Here, had respondent provided any proof that the security deposit was, in fact, so conveyed to petitioner, under this analysis and not addressing the existence of the stipulation, petitioner would have been liable. As there is no allegation from respondent that such conveyance ever took place, and there is ample documentation from petitioner that it did not, petitioner has no liability to respondent under the lease terms.
Respondent next avers that the parties' stipulation, drafted by petitioner's attorney, is ambiguous and the ambiguity should be construed in its favor. Respondent asserts that the "if any" wording referred only to the return of interest and that the security deposit was to be returned without condition.