S T A T E O F N E W Y O R K
________________________________________________________________________
9939
I N A S S E M B L Y
February 27, 2018
___________
Introduced by M. of A. MURRAY -- read once and referred to the Committee
on Judiciary
AN ACT to amend the real property actions and proceedings law, in
relation to the duty of the mortgagee or its loan servicing agent to
maintain property secured by delinquent mortgage
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 1307 of the real property actions and proceedings
law, as added by chapter 507 of the laws of 2009, is amended to read as
follows:
§ 1307. Duty to maintain [foreclosed] property SECURED BY DELINQUENT
MORTGAGE. 1. [A plaintiff in a mortgage foreclosure action who obtains
a judgment of foreclosure and sale pursuant to section thirteen hundred
fifty-one of this article, involving residential real property, as
defined in section thirteen hundred five of this article, that is
vacant, or becomes vacant after the issuance of such judgment, or is
abandoned by the mortgagor but occupied by a tenant] (A) WITH RESPECT TO
A MORTGAGE LOAN SECURED BY RESIDENTIAL REAL PROPERTY, as defined under
section thirteen hundred five of this article, OR RESIDENTIAL COOPER-
ATIVE APARTMENTS OR RESIDENTIAL COOPERATIVE CONDOMINIUMS WHERE THE PROP-
ERTY IS "VACANT AND ABANDONED" AS DEFINED IN PARAGRAPH (B) OF THIS
SUBDIVISION OR A FORECLOSURE ACTION HAS BEEN COMMENCED AGAINST THE PROP-
ERTY BECAUSE THE MORTGAGOR HAS FAILED TO MAINTAIN THE PROPERTY OR WHERE
A JUDGMENT OF FORECLOSURE UNDER SECTION THIRTEEN HUNDRED FIFTY-ONE OF
THIS ARTICLE HAS BEEN OBTAINED ON THE PROPERTY THAT HAS BEEN ABANDONED
BY THE MORTGAGOR BUT REMAINS OCCUPIED BY A TENANT LAWFULLY IN
POSSESSION, THE MORTGAGEE OR ITS LOAN SERVICING AGENT shall maintain
such property until such time as ownership has been transferred through
the closing of title in foreclosure, or other disposition, and the deed
for such property has been duly recorded; provided, however, that if a
municipality or governmental entity holds a mortgage [subordinate to one
or more mortgages] on the residential real property, the municipality or
governmental entity shall not be subject to the requirements of this
section. THE MORTGAGEE OR ITS LOAN SERVICING AGENT'S DUTY TO MAINTAIN
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10990-01-7
A. 9939 2
SUCH PROPERTY SHALL INCLUDE PAYMENT OF HOMEOWNER'S FEES, MAINTENANCE
FEES, AND UPKEEP FEES FOR RESIDENTIAL COOPERATIVE APARTMENTS AND COOPER-
ATIVE CONDOMINIUMS WHICH ARE VACANT AND ABANDONED.
(B) FOR PURPOSES OF THIS SECTION, RESIDENTIAL REAL PROPERTY OR RESI-
DENTIAL COOPERATIVE APARTMENTS OR RESIDENTIAL COOPERATIVE CONDOMINIUMS
SHALL BE DEEMED "VACANT AND ABANDONED" WHEN: (I) AT LEAST THREE MONTHLY
PAYMENTS ARE PAST DUE ON THE MORTGAGE LOAN OR THE MORTGAGOR HAS INFORMED
THE MORTGAGEE OR LOAN SERVICING COMPANY IN WRITING THAT THE MORTGAGOR
DOES NOT INTEND TO OCCUPY THE PROPERTY IN THE FUTURE; AND (II) EITHER:
(A) THERE IS A REASONABLE BASIS TO BELIEVE THAT THE PROPERTY IS NOT
OCCUPIED WHICH SHALL BE DETERMINED IN ACCORDANCE WITH THE REQUIREMENTS
OF PARAGRAPH (B-1) OF THIS SUBDIVISION; (B) SUCH RESIDENTIAL REAL PROP-
ERTY OR RESIDENTIAL COOPERATIVE APARTMENTS OR RESIDENTIAL COOPERATIVE
CONDOMINIUMS ARE A RISK TO THE HEALTH, SAFETY OR WELFARE OF THE PUBLIC
OR ANY ADJOINING OR ADJACENT PROPERTY OWNERS, DUE TO ACTS OF VANDALISM,
LOITERING, CRIMINAL CONDUCT, OR PHYSICAL DESTRUCTION OR DETERIORATION OF
THE PROPERTY; OR (C) THE RELEVANT GOVERNMENTAL AUTHORITY HAS DECLARED
THE PROPERTY UNFIT FOR OCCUPANCY AND TO REMAIN VACANT AND UNOCCUPIED OR
TO BE DEMOLISHED. WHERE A MORTGAGEE OR LOAN SERVICING COMPANY HAS
RECEIVED WRITTEN NOTICE FROM A MORTGAGOR THAT SUCH MORTGAGOR DOES NOT
INTEND TO OCCUPY SUCH PROPERTY IN THE FUTURE, THE MORTGAGEE OR LOAN
SERVICING COMPANY SHALL PROMPTLY NOTIFY THE ATTORNEY GENERAL IN WRITING
OF ITS RECEIPT OF SUCH NOTIFICATION AND THE DATE THEREOF.
(B-1) FOR PURPOSES OF PARAGRAPH (B) OF THIS SUBDIVISION, A REASONABLE
BASIS TO BELIEVE THAT RESIDENTIAL REAL PROPERTY OR RESIDENTIAL COOPER-
ATIVE APARTMENTS OR RESIDENTIAL COOPERATIVE CONDOMINIUMS ARE NOT OCCU-
PIED SHALL, AT A MINIMUM, BE BASED UPON PERIODIC INSPECTIONS OF SUCH
PROPERTY, AT LEAST THIRTY DAYS APART, WHERE TWO OR MORE SUCH INSPECTIONS
REVEAL EVIDENCE OF ABANDONMENT. FOR PURPOSES OF THIS SUBDIVISION,
"EVIDENCE OF ABANDONMENT" SHALL INCLUDE BUT NOT BE LIMITED TO ANY OF THE
FOLLOWING CONDITIONS: (I) OVERGROWN OR DEAD VEGETATION; (II) ACCUMU-
LATION OF NEWSPAPERS, CIRCULARS, FLYERS OR MAIL; (III) PAST DUE UTILITY
NOTICES, DISCONNECTED UTILITIES, OR UTILITIES NOT IN USE; (IV) ACCUMU-
LATION OF TRASH REFUSE OR OTHER DEBRIS; (V) ABSENCE OF WINDOW COVERINGS
SUCH AS CURTAINS, BLINDS, OR SHUTTERS; (VI) ONE OR MORE BOARDED, MISSING
OR BROKEN WINDOWS; (VII) THE PROPERTY IS OPEN TO CASUAL ENTRY OR TRES-
PASS; OR (VIII) THE PROPERTY HAS A BUILDING OR STRUCTURE THAT IS OR
APPEARS STRUCTURALLY UNSOUND OR HAS ANY OTHER CONDITION THAT PRESENTS A
POTENTIAL HAZARD OR DANGER TO THE SAFETY OF PERSONS.
(B-2) FOR PURPOSES OF DETERMINING WHETHER RESIDENTIAL REAL PROPERTY OR
RESIDENTIAL COOPERATIVE APARTMENTS OR RESIDENTIAL COOPERATIVE CONDOMIN-
IUMS ARE OCCUPIED, THE MORTGAGEE OR LOAN SERVICING COMPANY SHALL CONDUCT
OR CAUSE TO BE CONDUCTED PERIODIC INSPECTIONS OF SUCH PROPERTY AT LEAST
ONCE EVERY THIRTY DAYS COMMENCING NO LATER THAN SEVEN DAYS AFTER THE
DATE UPON WHICH TWO MORTGAGE PAYMENTS ON SUCH PROPERTY ARE PAST DUE, OR
SOONER IF SO REQUIRED BY FEDERAL STATUTE, RULE, REGULATION, PUBLISHED
GUIDANCE, OR OTHER REQUIREMENTS OF THE FEDERAL NATIONAL MORTGAGE ASSOCI-
ATION, FEDERAL HOME LOAN MORTGAGE CORPORATION OR FEDERAL HOUSING FINANCE
AGENCY.
(B-3) FOR PURPOSES OF PARAGRAPH (B) OF THIS SUBDIVISION, RESIDENTIAL
REAL PROPERTY OR RESIDENTIAL COOPERATIVE APARTMENTS OR RESIDENTIAL COOP-
ERATIVE CONDOMINIUMS SHALL NOT BE DEEMED "VACANT AND ABANDONED" WHERE
SUCH PROPERTY IS: (I) AN UNOCCUPIED BUILDING WHICH IS UNDERGOING
CONSTRUCTION, RENOVATION OR REHABILITATION THAT IS PROCEEDING TO
COMPLETION, AND THE BUILDING IS IN COMPLIANCE WITH ALL APPLICABLE ORDI-
NANCES, CODES, REGULATIONS AND STATUTES; (II) A BUILDING OCCUPIED ON A
A. 9939 3
SEASONAL BASIS THAT IS OTHERWISE SECURE; (III) A BUILDING THAT IS
SECURE, BUT IS THE SUBJECT OF A PROBATE ACTION, ACTION TO QUIET TITLE,
OR OTHER SIMILAR OWNERSHIP DISPUTE; (IV) A BUILDING DAMAGED BY A NATURAL
DISASTER AND ONE OR MORE OWNER INTENDS TO REPAIR AND REOCCUPY THE PROP-
ERTY; OR (V) OCCUPIED BY THE MORTGAGOR, A RELATIVE OF THE MORTGAGOR OR A
TENANT LAWFULLY IN POSSESSION.
2. Such [plaintiff] MORTGAGEE AND/OR ITS LOAN SERVICING AGENT shall
have the right to peaceably enter upon such property DETERMINED TO BE
VACANT AND ABANDONED PURSUANT TO SUBDIVISION ONE OF THIS SECTION, or to
cause others to peaceably enter upon the property for the limited
purpose of inspections, repairs and maintenance as required by this
section, or as otherwise ordered by court; provided, however, that if
the property is occupied by a tenant LAWFULLY IN POSSESSION, at least
seven days notice must be given to such tenant, unless emergency repairs
are required in which case reasonable notice shall be provided to the
tenant.
2-A. (A) IT SHALL BE UNLAWFUL FOR A MORTGAGEE, ITS SERVICER OR A THIRD
PARTY AGENT OR OTHER PERSON ACTING ON BEHALF OF A MORTGAGEE TO ENTER
RESIDENTIAL REAL PROPERTY OR RESIDENTIAL COOPERATIVE APARTMENTS OR RESI-
DENTIAL COOPERATIVE CONDOMINIUMS THAT ARE NOT VACANT AND ABANDONED FOR
THE PURPOSE OF FORCING, INTIMIDATING, HARASSING OR COERCING A LAWFUL
OCCUPANT OF SUCH RESIDENTIAL PROPERTY TO VACATE THAT PROPERTY IN ORDER
TO RENDER THE PROPERTY VACANT AND ABANDONED, OR TO OTHERWISE FORCE,
INTIMIDATE, HARASS, OR COERCE A LAWFUL OCCUPANT OF RESIDENTIAL REAL
PROPERTY TO VACATE THAT PROPERTY SO THAT IT MAY BE CONSIDERED AS VACANT
AND ABANDONED.
(B) LIABILITY FOR SUCH UNLAWFUL CONDUCT SHALL EXTEND TO ANY MORTGAGEE
FOR WHOSE BENEFIT THE ACTIONS WERE INITIATED, IN ADDITION TO ANY AGENT,
EMPLOYEE OR SUBCONTRACTOR OF THE MORTGAGEE WHO RETAINED, HIRED OR OTHER-
WISE ENLISTED THE PERPETRATOR.
(C) A HOMEOWNER AND/OR OCCUPANT, OR A HOMEOWNERS ASSOCIATION WHO HAS
BEEN SUBJECTED TO SUCH UNLAWFUL CONDUCT MAY BRING AN ACTION FOR DAMAGES
AND INJUNCTIVE RELIEF WHICH MAY BE RAISED AS A COUNTERCLAIM IN A FORE-
CLOSURE OR EVICTION PROCEEDING, OR IN ANY OTHER ACTION OR PROCEEDING
BROUGHT TO REGAIN POSSESSION OF, OR QUIET TITLE TO, RESIDENTIAL REAL
PROPERTY, OR MAY BE RAISED AS AN AFFIRMATIVE ACTION IN ANY COURT OF
COMPETENT JURISDICTION.
(D) PUNITIVE DAMAGES, COSTS AND/OR ATTORNEY FEES, MAY BE AWARDED WHEN
THE CONDUCT COMPLAINED OF HAS BEEN CARRIED OUT WITH KNOWING DISREGARD OF
THE RIGHTS OF THE OCCUPANT OR WAS PART OF A PATTERN OF CONDUCT INTENDED
TO SECURE THE VACATING OF PROPERTIES SO THAT THOSE PROPERTIES WOULD BE
CONSIDERED AS VACANT AND ABANDONED FOR PURPOSES OF THIS SECTION.
3. The municipality in which such residential real property OR RESI-
DENTIAL COOPERATIVE APARTMENTS OR RESIDENTIAL COOPERATIVE CONDOMINIUMS
[is] ARE located, any tenant lawfully in possession, and a board of
managers of a condominium in which the premises are located or a home-
owners association if said premises are subject to the rules and regu-
lations of such an association, shall have the right to enforce the
obligations described in this section in any court of competent juris-
diction after at least seven days notice to the [plaintiff in the fore-
closure action] MORTGAGEE OR ITS LOAN SERVICING AGENT unless emergency
repairs are required. Any entity acting pursuant to this subdivision
shall have a cause of action in any court of competent jurisdiction
against the [plaintiff in the foreclosure action] MORTGAGEE OR ITS LOAN
SERVICING AGENT to recover costs incurred as a result of maintaining the
property. SUCH ENTITY SHALL PROVIDE THE ATTORNEY GENERAL WITH WRITTEN
A. 9939 4
NOTICE AT LEAST TEN DAYS PRIOR TO BRINGING AN ACTION PURSUANT TO THIS
SUBDIVISION; PROVIDED, HOWEVER, THAT FAILURE TO COMPLY WITH THIS NOTICE
REQUIREMENT SHALL NOT BE A DEFENSE TO THE ENTITY'S PROCEEDING. The
authority provided by this subdivision shall be in addition to, and
shall not be deemed to diminish or reduce, any rights of the parties
described in this section under existing law against the mortgagor of
such property for failure to maintain such property.
4. In the event the mortgagor of the property commences a proceeding
in bankruptcy court prior to the completion of the public auction
ordered in the judgment of sale, the duties created by this section
shall be suspended during the pendency of the bankruptcy proceeding or
until such time as an order has been entered in that proceeding lifting
or removing the automatic stay of the foreclosure sale.
5. For the purposes of this section "maintain" shall mean keeping the
subject property in a manner that is consistent with the standards set
forth in the New York property maintenance code chapter 3 sections 301,
302 (excluding 302.2, 302.6 and 302.8), 304.1, 304.3, 304.7, 304.10,
304.12, 304.13, 304.15, 304.16, 307.1, and 308.1; provided, however,
that if the property is occupied by a tenant, then such property must
also be maintained in a safe and habitable condition.
6. A [plaintiff] MORTGAGEE OR ITS LOAN SERVICING AGENT shall be
relieved of its responsibilities [to maintain the residential real prop-
erty that is the subject of a foreclosure action] UNDER PARAGRAPH (A) OF
SUBDIVISION ONE OF THIS SECTION for the period that a receiver of such
property is serving.
7. Nothing contained in this section shall diminish in any way the
obligations pursuant to any state or local law of the mortgagor of the
property or a receiver of rents and profits appointed in an action to
foreclose a mortgage to maintain the property prior to the closing of
title pursuant to a foreclosure sale.
8. This section shall not preempt, reduce or limit any rights or obli-
gations imposed by any local laws with respect to property maintenance
and the locality's ability to enforce those laws.
§ 2. This act shall take effect on the ninetieth day after it shall
have become a law; provided, however, that effective immediately, the
addition 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.