N.Y. Real Property Actions & Proceedings Law § 776: Judgment

§ 776. Judgment. The court shall render a final judgment either

a. Dismissing the petition for failure to affirmatively establish the

allegations thereof or because of the affirmative establishment by the

owner or a mortgagee or lienor of record of a defense or defenses

specified in section seven hundred seventy-five of this article; or

b. Directing that (1) the rents due on the date of the entry of such

judgment from the petitioning tenants and the rents due on the dates of

service of the judgment on all other residential and non-residential

tenants occupying such dwelling from such other tenants, shall be

deposited with the administrator appointed by the court, pursuant to

section seven hundred seventy-eight of this article; (2) any rents to

become due in the future from all tenants occupying such dwelling shall

be deposited with such administrator as they fall due; (3) such

deposited rents shall be used, subject to the court's direction, to the

extent necessary to remedy the condition or conditions alleged in the

petition and (4) upon the completion of such work in accordance with

such judgment, any remaining surplus shall be turned over to the owner,

together with a complete accounting of the rents deposited and the costs

incurred; and granting such other and further relief as to the court may

seem just and proper. A certified copy of such judgment shall be served

personally upon each non-petitioning tenant occupying such dwelling and

upon the city of New York by service as provided in subdivision five of

section seven hundred seventy-one of this article. If personal service

on any such non-petitioning tenant cannot be made with due diligence,

service on such tenant shall be made by affixing a certified copy of

such judgment on the entrance door of such tenant's apartment, store or

other unit and, in addition, within one day after such affixing, by

sending a certified copy thereof by registered mail, return receipt

requested, to such tenant. Any right of the owner of such dwelling to

collect such rent moneys from any petitioning tenant of such dwelling on

or after the date of entry of such judgment, and from any

non-petitioning tenant of such dwelling on or after the date of service

of such judgment on such non-petitioning tenant as herein provided,

shall be void and unenforceable to the extent that such petitioning or

non-petitioning tenant, as the case may be, has deposited such moneys

with the administrator in accordance with the terms of such judgment,

regardless of whether such right of the owner arises from a lease,

contract, agreement or understanding heretofore or hereafter made or

entered into or arises as a matter of law from the relationship of the

parties or otherwise. It shall be a valid defense in any action or

proceeding against any such tenant to recover possession of real

property for the non-payment of rent or for use or occupation to prove

that the rent alleged to be unpaid was deposited with the administrator

in accordance with the terms of a judgment entered under this section.