OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed, with costs.

The language of the General Obligations Law (§ 7-103, subd 2) provides two alternatives for the disposition of accrued interest, less administration expenses, by a landlord: to hold the interest in trust or to make annual payments to the tenant. Neither the statutory language nor the legislative history mandates that a landlord apply the accrued interest to a subsequent increase in the security deposit. Nor did the Appellate Division abuse its discretion in awarding costs and disbursements to defendants.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Meyer, Simons and Kaye concur.

On review of submissions pursuant to rule 500.2 (b) of the Rules of the Court of Appeals (22 NYCRR 500.2 [g]), order affirmed, with costs, in a memorandum.