Nazor v. Sydney Sol Group, Ltd., 2025 NY Slip Op 03295 (2025)

As to the seventh cause of action for an accounting of the tenants' use and occupancy payments and the security deposit, although pendente lite use and occupancy payments are not trust funds, that portion of the seventh cause of action seeking an accounting of the landlord's treatment of the security deposit under General Obligations Law § 7-103(1) should be reinstated. By failing to submit an affidavit by a person with knowledge of the facts, the landlord failed to meet its burden to establish that the trust funds were not commingled, and therefore the claim for an accounting of the security [*2]deposit should not have been dismissed (see 225 E. 64th St., LLC v Janet H. Prystowsky, M.D. P.C., 96 AD3d 536, 537-538 [1st Dept 2012]). Because the landlord's obligations with respect to the security deposit arise under the lease and there is no evidence that the security deposit has been returned, the tenants' twelfth cause of action for attorneys' fees under Real Property Law § 234 should be reinstated, in the event the tenants are the prevailing party.