S T A T E O F N E W Y O R K
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10727
I N A S S E M B L Y
May 15, 2018
___________
Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
tee on Judiciary
AN ACT to amend the general obligations law, in relation to pre-payment
penalties for mortgages secured by real property owned in a cooper-
ative form of ownership
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph b of subdivision 3 of section 5-501 of the gener-
al obligations law, as amended by chapter 472 of the laws of 2008, is
amended to read as follows:
b. notwithstanding any other provision of law, the unpaid balance of
the loan or forbearance may be prepaid, in whole or in part, at any
time. If prepayment is made on or after one year from the date the loan
or forbearance is made, no penalty may be imposed. If prepayment is made
prior to such time, no penalty may be imposed unless provision therefor
is expressly made in the loan contract, provided that no penalty may be
imposed if prohibited by sections six-l and six-m of the banking law. NO
PREPAYMENT PENALTY OR FEE SHALL BE CHARGED OR COLLECTED ON A LOAN OR
FORBEARANCE SECURED BY REAL PROPERTY OWNED IN A COOPERATIVE FORM OF
OWNERSHIP WHERE OVER FIFTY PERCENT OF THE UNITS ARE SHAREHOLDER OCCU-
PIED. SUCH PREPAYMENT PENALTY SHALL BE UNENFORCEABLE. In all cases, the
right of prepayment shall be stated in the instrument evidencing the
loan or forbearance, provided, however, that the provisions of this
subdivision shall not apply to the extent such provisions are inconsist-
ent with any federal law or regulation.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15196-01-8