Suppose a landlord in New York State who cannot provide an accounting of their tenant's security deposit is accused in small claims court of commingling it with personal funds, which is conversion.
1)Is it a defense if the tenant initially paid the security deposit and first month's rent together in one big check, so the tenant is somehow deemed complicit in the conversion of his deposit?
Or, is the landlord still guilty of conversion because within a reasonable time after receiving the one big check, he never established a separate a separate escrow account and funded it from his own account with an amount equal to the security deposit?
2) When a landlord is guilty of conversion by commingling a tenant's security, isn't the landlord liable for accrued interest on its return -regardless of whether the rented property has less than the 6 units referenced in GOL 7-103(2a)?