Cal. Civ. Code § 7-106
Money deposited or advanced for certain installations; waiver void
Operative Text
§ 7-106. Money deposited or advanced for certain installations; waiver void. 1. Whenever any non-public moneys shall be deposited or advanced by the owner of an occupied residential dwelling on a contract for the installation of a private connection to a public sewer line as security for payments 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, trust company, savings bank, savings and loan association, federal savings and loan association or federal mutual savings bank and shall not be mingled with other funds or become an asset of such trustee. 2. Any provision of a contract whereby a person who has deposited or advanced money on a contract for the installation of a private connection to a public sewer line as security for payments or to be applied to payments upon such contract when due waives any provision of this section is absolutely void.
Under N.Y. Gen. Oblig. Law § 7-106, when a residential property owner deposits or advances private funds as security on a contract for installing a private sewer connection to a public line, those funds retain their character as the depositor's own money and must be held in trust. The contractor or other recipient must keep the funds in a qualifying banking institution and may not commingle them with other assets. Any contract clause that attempts to strip the depositor of these protections is declared completely void by the statute.
Plain English — not legal advice.
Property owners and managers who enter contracts for private sewer-line connections under N.Y. Gen. Oblig. Law § 7-106 should be aware that any advance or security deposit they make on such a contract is legally protected as a trust fund. Compliant contractors generally hold those funds in a separate, qualifying bank account and do not treat them as general business assets. Owners who encounter contract language purporting to waive these trust-fund requirements can note that § 7-106 renders such clauses unenforceable.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
N.Y. Gen. Oblig. Law § 7-106 is primarily directed at residential property owners who advance funds for sewer-connection installations, but tenants in occupied residential dwellings may have an interest in understanding how these protections apply to their building. If a tenant believes funds related to such an installation have been mishandled, general enforcement paths include raising the statutory violation in any related legal proceeding or filing a complaint with the appropriate state or local regulatory agency. Tenant-rights organizations can help explain how § 7-106 may be relevant to a particular housing situation.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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