NY Gen Oblig L § 7-101 (2021)
2021 New York Laws GOB - General Obligations Article 7 - Obligations Relating to Property Received as Security Title 1 - Money Deposited as Security to Be Held in Trust in Certain Cases 7-101 - Money Deposited or Advanced for Use or Rental of Personal Property; Waiver Void.

§ 7-101. Money  deposited  or  advanced  for use or rental of personal   property; waiver void. 1. Whenever money shall be deposited or  advanced   on a contract for the use or rental of personal property as security for   performance  of  the  contract  or  to  be applied to payments upon such   contract when due, such money, with interest accruing thereon,  if  any,   until repaid or so applied, shall continue to be the money of the person   making  such  deposit  or  advance  and  shall  be  a  trust fund in the   possession of the person with whom such deposit or advance shall be made   and shall be deposited in a bank or  trust  company  and  shall  not  be   mingled  with other funds or become an asset of such trustee, excepting,   however, that such trust funds may be deposited with  other  funds  that   have  been  deposited  or  advanced  to  the  trustee  as  security  for   performance of a contract for the use or rental of personal property  or   be  applied  to payments upon such contract when due. If the money being   deposited or advanced is for the use or rental of personal property  and   the  money  deposited or advanced is seven hundred fifty dollars or more   and is for the use or rental of personal property for a period equal  to   or greater than one hundred twenty days, the person receiving such money   shall deposit it pursuant to the provisions of subdivision one-a of this   section.1-a.  Whenever  the  money  so  deposited or advanced is seven hundred   fifty dollars or more and is for the use or rental of personal  property   for  a  period  equal  to  or  greater than one hundred twenty days, the   person receiving such money shall, subject to  the  provisions  of  this   section,  deposit  it  in  an  interest  bearing  account  in  a banking   organization within the state which account shall  earn  interest  at  a   rate  which  shall  be the prevailing rate earned by other such deposits   made with banking organizations in such area. Such person shall  not  be   required  to  keep  the funds of the separate persons from whom security   deposits or advances have been received in separate depository accounts,   provided his books of account shall clearly show the allocation  of  the   funds deposited in his general or special depository account. The person   depositing  such  security  money  shall  be  entitled  to  receive,  as   administration expenses, a sum equivalent to one per cent per annum upon   the security money so  deposited,  which  shall  be  deducted  from  the   interest earned on such security money from the banking organization and   shall  be  in  lieu  of  all other administrative and custodial expenses   relating to the security deposit or advance. The balance of the interest   paid by the banking organization shall be the money of the lessee making   the deposit or advance and shall either be held in trust by  the  person   with whom such deposit or advance shall be made, until repaid or applied   for  the use or rental of the personal property, or annually paid to the   lessee making the deposit of security money.1-b. This section shall not be applicable to any  advance  payment  of   money  under  or  with  respect to any contract for the use or rental of   personal property that, in accordance with the terms applicable to  such   payment,  either  (a) is not revocable by the person making such payment   and is not otherwise subject to  being  returned  or  refunded  to  such   person, or (b) otherwise satisfies or discharges an equivalent liability   under  such  contract  when  such  payment  is made, whether or not such   liability is otherwise then due and payable  under  the  terms  of  such   contract.1-c.  This  section  shall  apply  to  money  deposited or advanced on   contracts for the use or rental of personal  property  as  security  for   performance  of  the  contract  or  to  be applied to payments upon such   contract when due, only if (a) such contract is governed by the laws  of   this  state as the result of a choice of law provision in such contract,   in accordance  with  section  1--301  of  the  uniform  commercial  code    (subject  to  the  limitations  on  choice  of  law  by the parties to a   consumer lease under section 2-A-106 of the uniform commercial code), or   such contract is otherwise  governed  by  the  laws  of  this  state  in   accordance  with  applicable  conflict of laws rules, and (b) the lessee   under such contract is located within this state, within the meaning  of   the  uniform  commercial code (with respect to the location of debtors),   except that a foreign air carrier under  the  Federal  Aviation  Act  of   1958,  as amended, shall not be deemed located in this state solely as a   result of having a designated office of an agent upon  whom  service  of   process may be made located in this state.2.  Any  provision of a contract whereby a person who has deposited or   advanced money on a contract for the use or rental of personal  property   as  security for the performance of the contract waives any provision of   this section is absolutely void.3. This section shall not be applicable to any deposit or  advance  of   money made in connection with the borrowing of securities for any lawful   purpose.