S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3456

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 27, 2009
                               ___________

Introduced by M. of A. MENG, COLTON, GORDON, MAISEL, COOK -- Multi-Spon-
  sored  by  --  M.  of  A.   GOTTFRIED -- read once and referred to the
  Committee on Judiciary

AN ACT to amend the real property  law,  in  relation  to  recording  of
  restrictive covenant modification documents

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The real property law is amended by adding  a  new  section
291-i to read as follows:
  S 291-I. PROHIBITED RESTRICTIVE COVENANTS. 1. PROHIBITED RESTRICTIONS.
(A)  ANY PROVISION IN A WRITTEN INSTRUMENT RELATING TO OR AFFECTING REAL
PROPERTY THAT PURPORTS TO  FORBID  OR  RESTRICT  CONVEYING,  MORTGAGING,
ENCUMBERING  OR LEASING OF SUCH REAL PROPERTY TO ANY PERSON ON THE BASIS
OF RACE, COLOR, RELIGION, GENDER, SEXUAL ORIENTATION,  FAMILIAL  STATUS,
MARITAL  STATUS,  DISABILITY,  SOURCE OF INCOME OR SOCIOECONOMIC STATUS,
NATIONAL ORIGIN OR ANCESTRY, OR HUMAN  IMMUNODEFICIENCY  VIRUS,  OR  ANY
OTHER CRITERIA IN VIOLATION OF APPLICABLE FEDERAL OR STATE LAW, SHALL BE
VOID.
  (B)  NOTWITHSTANDING  PARAGRAPH (A) OF THIS SUBDIVISION, THE FOLLOWING
PROVISIONS ARE NOT PROHIBITED BY THIS SECTION:
  (I) A LIMITATION, ON THE BASIS OF RELIGION, ON THE USE OF REAL PROPER-
TY HELD BY A RELIGIOUS INSTITUTION OR ORGANIZATION OR BY  ANY  RELIGIOUS
OR  CHARITABLE  ORGANIZATION,  OPERATED,  SUPERVISED  OR CONTROLLED BY A
RELIGIOUS INSTITUTION OR ORGANIZATION AND USED FOR RELIGIOUS OR CHARITA-
BLE PURPOSES; AND
  (II) A LIMITATION, IN ACCORDANCE  WITH  THE  PROVISIONS  OF  STATE  OR
FEDERAL  LAW, ON THE BASIS OF SOURCE OF INCOME OR SOCIO-ECONOMIC STATUS,
ON THE USE OF REAL PROPERTY DESIGNATED  AS  HOUSING  ACCOMMODATIONS  FOR
PERSONS  IN  LOW  INCOME  CATEGORIES,  WHICH LIMITATION RESTRICTS USE OR
OCCUPANCY OF SUCH PROPERTY TO PERSONS IN SUCH CATEGORIES, INCLUDING, BUT
NOT LIMITED TO LIMITATIONS ON PROPERTY:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05292-01-9
              

A. 3456                             2

  (A) DESIGNATED AS PUBLICLY-ASSISTED HOUSING ACCOMMODATIONS AS PROVIDED
IN SECTION TWO HUNDRED NINETY-TWO OF THE HUMAN RIGHTS LAW; OR
  (B)  SUBJECT TO RENT CONTROL OR RENT STABILIZATION PURSUANT TO CHAPTER
FIVE HUNDRED SEVENTY-SIX OF THE LAWS OF NINETEEN  HUNDRED  SEVENTY-FOUR,
CONSTITUTING   THE   EMERGENCY   TENANT   PROTECTION   ACT  OF  NINETEEN
SEVENTY-FOUR, CHAPTER TWO HUNDRED SEVENTY-FOUR OF THE LAWS  OF  NINETEEN
HUNDRED  FORTY-SIX, CONSTITUTING THE EMERGENCY HOUSING RENT CONTROL LAW,
OR THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK.
  (C) THE VOIDING OF A PROVISION  PURSUANT  TO  PARAGRAPH  (A)  OF  THIS
SUBDIVISION  SHALL  NOT  AFFECT  THE VALIDITY OF THE INSTRUMENT, AND THE
INSTRUMENT SHALL HAVE FULL FORCE AND EFFECT IN ALL OTHER  RESPECTS,  AND
SHALL BE CONSTRUED AS IF NO SUCH PROVISION WERE CONTAINED THEREIN.
  2.  PROSPECTIVE  DOCUMENTS.  SUBJECT  TO THE PROVISIONS OF SUBDIVISION
FIVE OF THIS SECTION, NO WRITTEN INSTRUMENT HEREAFTER MADE, RELATING  TO
OR  AFFECTING REAL PROPERTY, SHALL CONTAIN ANY PROVISION IN VIOLATION OF
THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION. UPON THE TRANSFER  OR
SALE OF REAL PROPERTY, OR UPON THE OCCURRENCE OF ANY OTHER CIRCUMSTANCES
ENTAILING THE FILING OF A NEW DEED PERTAINING TO REAL PROPERTY, WHICHEV-
ER  OCCURS  FIRST, THE ATTORNEY, TITLE INSURANCE COMPANY OR TITLE INSUR-
ANCE AGENT PREPARING THE NEW  DEED  SHALL  REMOVE  FROM  SUCH  DEED  ALL
PROVISIONS  OR  LANGUAGE  PROHIBITED BY SUBDIVISION ONE OF THIS SECTION,
AND SHALL ALSO REMOVE ALL SUCH PROVISIONS OR LANGUAGE FROM  ANY  ASSOCI-
ATED  CONTRACTS, SECURITY INSTRUMENTS OR OTHER DOCUMENTS INVOLVED IN THE
TRANSACTION. SUCH ATTORNEY, TITLE INSURANCE COMPANY OR  TITLE  INSURANCE
AGENT  SHALL,  IF  NECESSARY  TO  GIVE EFFECT TO THIS SECTION, PREPARE A
MODIFICATION DOCUMENT AS PROVIDED IN SUBDIVISION THREE OF THIS  SECTION,
TO  BE SIGNED BY THE OWNER OF RECORD OR THE PROSPECTIVE PURCHASER OF THE
PROPERTY, AS APPLICABLE, AND SHALL FILE THE SAME AT  THE  TIME  THE  NEW
DEED IS FILED.
  3.  EXISTING  DOCUMENTS. SUBJECT TO THE PROVISIONS OF SUBDIVISION FIVE
OF THIS SECTION, A PERSON WHO HOLDS AN OWNERSHIP INTEREST OF  RECORD  IN
REAL PROPERTY HE OR SHE BELIEVES IS THE SUBJECT OF A PROHIBITED RESTRIC-
TIVE COVENANT IN VIOLATION OF THE PROVISIONS OF THIS SECTION MAY, AT ANY
TIME  PRIOR TO THE SALE OF THE PROPERTY, RECORD A DOCUMENT, AS DESCRIBED
IN THIS SUBDIVISION, MODIFYING THE INSTRUMENT CONTAINING THE  PROHIBITED
RESTRICTIVE COVENANT.
  (A)  THE  MODIFICATION  DOCUMENT  SHALL  BEAR THE HEADING "RESTRICTIVE
COVENANT MODIFICATION", AND SHALL BE FILED WITH THE CLERK OF THE  COUNTY
IN WHICH THE REAL PROPERTY IS LOCATED, INDEXED IN THE SAME MANNER AS ANY
PREVIOUSLY  RECORDED  DOCUMENT  OR  DOCUMENTS  TO WHICH THE MODIFICATION
DOCUMENT REFERS.
  (B) THE MODIFICATION DOCUMENT SHALL:
  (I) DISPLAY ON THE FIRST PAGE THE NOTATION "THIS DOCUMENT  MODIFIES  A
DOCUMENT  THAT CONTAINS ILLEGAL RESTRICTIONS BASED ON RACE, COLOR, RELI-
GION, GENDER, SEXUAL ORIENTATION, FAMILIAL STATUS, MARITAL STATUS, DISA-
BILITY, SOURCE OF INCOME OR SOCIO-ECONOMIC STATUS,  NATIONAL  ORIGIN  OR
ANCESTRY,  OR  HUMAN  IMMUNODEFICIENCY  VIRUS, THAT VIOLATE STATE AND/OR
FEDERAL  LAW,  AND  IS  EXECUTED  FOR  THE  PURPOSE  OF  REMOVING   SUCH
RESTRICTIONS.";
  (II)  REFERENCE  THE ORIGINAL DOCUMENT TO BE MODIFIED BY BOOK AND PAGE
OR INSTRUMENT NUMBER AND THE DATE OF RECORDING, AND SET FORTH THE  NAMES
OF THE SIGNATORIES TO THE ORIGINAL DOCUMENT, IF ANY;
  (III)  INCLUDE A COMPLETE COPY OF THE ORIGINAL DOCUMENT CONTAINING THE
UNLAWFULLY RESTRICTIVE LANGUAGE WITH THE UNLAWFULLY RESTRICTIVE LANGUAGE
STRICKEN; AND

A. 3456                             3

  (IV) SET FORTH THE NAME  AND  ADDRESS  OF  THE  PERSON  PREPARING  THE
MODIFICATION DOCUMENT; AND
  (V)  BE  DULY EXECUTED IN THE MANNER AS A DEED BY ALL OWNERS OF RECORD
OF THE REAL PROPERTY, AND SIGNED UNDER PENALTY OF LAW.
  (C) THE OWNER OF THE PROPERTY SHALL BE RESPONSIBLE FOR ANY FILING FEE,
IF ANY, ASSOCIATED WITH THE FILING OF SUCH DOCUMENT.
  4. FORM. THE COUNTY CLERK SHALL MAKE AVAILABLE TO THE PUBLIC  RESTRIC-
TIVE COVENANT MODIFICATION FORMS AND INSTRUCTIONS IN ACCORDANCE WITH THE
PROVISIONS  OF  THIS  SECTION. NOTWITHSTANDING THE FOREGOING, A PROPERTY
OWNER MAY ELECT TO HAVE AN ATTORNEY PREPARE THE MODIFICATION DOCUMENT IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION.
  5. COMMON INTEREST DEVELOPMENTS. MODIFICATION  OF  THE  PROVISIONS  OF
GENERAL  ASSOCIATION  DOCUMENTS  PERTAINING  TO COMMON INTEREST DEVELOP-
MENTS, INCLUDING CONDOMINIUM OR COOPERATIVE ASSOCIATION  DOCUMENTS,  FOR
THE PURPOSE OF REMOVING PROHIBITED RESTRICTIVE COVENANTS AS DESCRIBED IN
SUBDIVISION  ONE OF THIS SECTION SHALL REQUIRE THE WRITTEN APPROVAL OF A
MAJORITY OF ALL OF THE OWNERS OF REAL PROPERTY LOCATED WITHIN THE DEVEL-
OPMENT. UPON GOOD FAITH DELIVERY OF WRITTEN NOTIFICATION TO  ALL  OWNERS
OF  REAL  PROPERTY  LOCATED  WITHIN  A  SUBDIVISION, AS INDICATED ON THE
RECORDS OF THE CLERK OF THE COUNTY IN WHICH THE SUBDIVISION IS  LOCATED,
A MEETING MAY BE HELD NOT LESS THAN TEN DAYS AFTER SUCH NOTIFICATION HAS
BEEN  GIVEN,  CONCERNING  THE MODIFICATION OF ANY PROHIBITED RESTRICTIVE
COVENANTS. FOLLOWING APPROVAL OF THE MAJORITY OF OWNERS, A  MODIFICATION
DOCUMENT PREPARED IN ACCORDANCE WITH THE PROVISIONS OF SUBDIVISION THREE
OF  THIS  SECTION  SHALL  BE  FILED WITH THE COUNTY CLERK. A COPY OF THE
MODIFICATION DOCUMENT SHALL BE DELIVERED BY MAIL TO ALL OWNERS OF RECORD
OF REAL PROPERTY LOCATED WITHIN THE SUBDIVISION.
  6. REVIEW. PRIOR TO RECORDING  A  MODIFICATION  DOCUMENT,  THE  COUNTY
CLERK  SHALL SUBMIT THE MODIFICATION DOCUMENT TO THE COUNTY ATTORNEY WHO
SHALL DETERMINE WHETHER THE ORIGINAL  DOCUMENT  CONTAINS  A  RESTRICTION
PROHIBITED BY SUBDIVISION ONE OF THIS SECTION. THE COUNTY ATTORNEY SHALL
RETURN  THE  DOCUMENTS AND SHALL ADVISE THE COUNTY CLERK OF ITS DETERMI-
NATION. IF THE COUNTY ATTORNEY DETERMINES  THAT  THE  ORIGINAL  DOCUMENT
DOES  NOT  CONTAIN  PROVISIONS  IN  VIOLATION OF SUBDIVISION ONE OF THIS
SECTION, THE COUNTY CLERK SHALL NOT RECORD  THE  MODIFICATION  DOCUMENT,
BUT SHALL RETURN THE DOCUMENT TO THE PROPERTY OWNER.
  7. EFFECT. SUBJECT TO COVENANTS, CONDITIONS, AND RESTRICTIONS RECORDED
AFTER  THE  ORIGINAL  DOCUMENT  CONTAINING  UNLAWFUL  RESTRICTIONS,  AND
SUBJECT TO COVENANTS, CONDITIONS AND  RESTRICTIONS  RECORDED  AFTER  THE
RESTRICTIVE  COVENANT  MODIFICATION  DOCUMENT,  THE RESTRICTIVE COVENANT
MODIFICATION, ONCE RECORDED,  SHALL  BE  DEEMED  THE  ONLY  RESTRICTIONS
HAVING EFFECT ON THE PROPERTY.
  8.  RESPONSIBILITY. IF THE HOLDER OF AN OWNERSHIP INTEREST IN PROPERTY
CAUSES TO BE  RECORDED  A  RESTRICTIVE  COVENANT  MODIFICATION  DOCUMENT
PURSUANT  TO THIS SECTION WHICH CONTAINS LANGUAGE NOT AUTHORIZED BY THIS
SECTION, ANY LIABILITY THAT DERIVES FROM SUCH  RECORDING  SHALL  BE  THE
SOLE  RESPONSIBILITY  OF  THE HOLDER OF THE OWNERSHIP INTEREST OF RECORD
AND THE COUNTY CLERK SHALL NOT INCUR ANY LIABILITY  FOR  RECORDING  SUCH
DOCUMENT.
  9. DEFINITIONS. AS USED IN THIS SECTION:
  (A)  "PROVISION" MEANS ALL CLAUSES, STIPULATIONS, RESTRICTIONS, PROHI-
BITIONS, COVENANTS AND CONDITIONS OF ANY KIND OR CHARACTER, INCLUDING  A
RIGHT OF ENTRY OR A POSSIBILITY OF REVERTER, WHICH DIRECTLY OR INDIRECT-
LY LIMIT THE USE OR OCCUPANCY OF REAL PROPERTY;
  (B)  "WRITTEN  INSTRUMENT"  OR  "INSTRUMENT"  MEANS EVERY WRITING THAT
RELATES TO OR AFFECTS ANY  RIGHT,  TITLE,  INTEREST  IN  REAL  PROPERTY,

A. 3456                             4

INCLUDING, BUT NOT LIMITED TO, DEEDS, MORTGAGES, LEASES, LIENS, MAPS AND
PLATS;
  (C) "SOURCE OF INCOME" MEANS THE COMBINED SOURCES OF ALL LAWFUL, VERI-
FIABLE INCOME PAID DIRECTLY TO A PERSON OR TO HIS OR HER REPRESENTATIVE,
WHICH INCOME IS REPORTED IN ACCORDANCE WITH APPLICABLE FEDERAL AND STATE
LAW; AND
  (D)  "RESTRICTIVE  COVENANT  MODIFICATION"  OR "MODIFICATION DOCUMENT"
MEANS A DOCUMENT PREPARED AND FILED IN ACCORDANCE WITH THE PROVISIONS OF
SUBDIVISION THREE OF THIS  SECTION  FOR  THE  PURPOSE  OF  MODIFYING  AN
INSTRUMENT  CONTAINING  A PROHIBITED RESTRICTIVE COVENANT AS PROVIDED IN
SUBDIVISION ONE OF THIS SECTION.
  10. APPLICATION. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO PROHIB-
IT THE INCLUSION IN WRITTEN INSTRUMENTS OF PROVISIONS NECESSARY TO  GIVE
EFFECT TO STATE OR FEDERAL STATUTES.
  11.  LIABILITY.  NOTWITHSTANDING  ANY  LAW TO THE CONTRARY, ANY PERSON
WHO, IN GOOD FAITH AND IN THE USUAL COURSE  OF  BUSINESS,  DELIVERS  ANY
DEED,  CONTRACT,  SECURITY INSTRUMENT, OR OTHER INSTRUMENT AFFECTING THE
TRANSFER OR SALE OF, OR ANY INTEREST IN, REAL PROPERTY WHICH CONTAINS  A
RESTRICTIVE  COVENANT  AS  DESCRIBED IN SUBDIVISION ONE OF THIS SECTION,
SHALL BE IMMUNE FROM CIVIL LIABILITY. IN ADDITION, SUCH  DELIVERY  SHALL
NOT CONSTITUTE AN UNFAIR HOUSING PRACTICE. THE PROVISIONS OF THIS SUBDI-
VISION SHALL NOT APPLY TO ANY PERSON WHO:
  (A)  REPRESENTS  OR ATTEMPTS TO REPRESENT THAT SUCH RESTRICTIVE COVEN-
ANTS ARE VALID AND ENFORCEABLE; OR
  (B) HONORS OR EXERCISES OR ATTEMPTS TO HONOR OR EXERCISE SUCH RESTRIC-
TIVE COVENANTS.
  S 2. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however that effective  immediate-
ly,  the  addition,  amendment  and/or  repeal of any rule or regulation
necessary for the implementation of this act on its effective  date  are
authorized  and  directed  to  be  made  and completed on or before such
effective date.