New York has strict laws protecting a tenant’s security deposit. A landlord taking a security deposit has to demonstrate that it was put in a separate account, or else he has to pay back the security with 9% annual interest from the beginning of the lease. The separate account has to be only for security deposits and cannot be for the landlord’s general operating funds. If the security deposit is put in the same account as the rent, it shows a violation of the law. Any payment to a landlord advanced towards future rent, including payment of the last month’s rent in advance, is considered a security deposit. When a landlord gets a security deposit, he has to give written notice of the name and address of the bank holding the deposit. If he does not, he has to prove, in court, that the security was deposited into a separate account. The landlord cannot defend an action for return of the security deposit by showing that the tenant is in violation of the lease, or owes rent, or damaged the premises. If the landlord has commingled the security deposit with his personal funds, the tenant is entitled to its return immediately. If the landlord has to give back the security deposit, he cannot demand that the tenant replenish the security. If the landlord is a corporation, the individual responsible for the security deposit is personally liable for it.