NY State Senate Bill 2019-S3102

Senate Bill S3102

2019-2020 Legislative Session

Directs the department of financial services to periodically inspect residential real properties for which a lender has a duty to maintain

download bill text pdf

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to housing, construction and community development
Feb 04, 2019	referred to housing, construction and community development

2019-S3102 (ACTIVE) - Details

See Assembly Version of this Bill:: A5634
Current Committee:: Senate Housing, Construction And Community Development
Law Section:: Real Property Actions and Proceedings Law
Laws Affected:: Amd §§1307, 1308 & 1310, RPAP L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S7167, A9763
2021-2022: S414
2023-2024: S4503

2019-S3102 (ACTIVE) - Summary

Directs the department of financial services to periodically inspect residential real properties for which a lender has a duty to maintain; authorizes the department of financial services or the municipality to impose a $500 a day civil penalty for the failure of a lender to maintain an abandoned property that it has a duty to maintain; requires such lenders to register with the statewide vacant and abandoned property electronic registry.

2019-S3102 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S3102

SPONSOR: BIAGGI
 
TITLE OF BILL:

An act to amend the real property actions and proceedings law, in
relation to directing the department of financial services to conduct
periodic inspections of vacant and abandoned residential real property
required to be maintained by the mortgagee, authorize the department of
financial services and municipalities to impose a daily civil penalty
upon mortgagees which fail to maintain abandoned and vacant residential
real property, and requiring lenders having a duty to maintain residen-
tial real property to register with the statewide vacant and abandoned
property registry

 
PURPOSE:

To help community residents and municipalities address the growing prob-
lem of vacant and abandoned residential properties owned by the mortgage
loan servicer or lender by enhancing the statewide registry of vacant
and abandoned property, requiring inspections of the property by the
department of financial services, and adding penalties for failure to

maintain the property.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill amends section 1307 of the real property actions
and proceedings law to require the department of financial services
(DFS) to inspect vacant and abandoned properties within four months of
the lender, assignee or mortgage loan servicer registering the property
with the vacant and abandoned registry after the bank receives a judg-
ment of foreclosure. DFS must conduct a follow-up inspection every six
months thereafter until the property's ownership has been transferred
through closing of title.

Section 2 of the bill amends section 1307 of the real property actions
and proceedings law to allow DFS or municipalities to impose a civil
penalty of $500 for each day that a mortgage loan servicer, lender or
assignee who owns the property fails to maintain the property.

Section 3 of the bill amends section 1308 of the real property actions
and proceedings law to require DFS to inspect the vacant and abandoned
property prior to the judgment of foreclosure. DFS must inspect the
property within four months of the property being registered by the
lender, assignee or mortgage loan servicer on the statewide vacant and
abandoned registry, and DFS must conduct a follow-up inspection every
six months thereafter until title is transferred.

Section 4 of the bill amends section 1310 of the real property actions
and proceedings law to expand the statewide vacant and abandoned regis-
try to include property owned by the lender, assignee or mortgage loan
servicer after a judgment of foreclosure until they transfer ownership
of title. The lender, assignee or mortgage loan servicer would be
required to provide additional information to the registry including the
date that the judgment of foreclosure was entered, the date the property
was deemed vacant and abandoned, and whom from the lender, assignee or
mortgage loan servicer entity is authorized to accept service of proc-
ess.

Section 5 states that this bill shall take effect on the first of Janu-
ary after the bill becomes law.

 
EXISTING LAW:

Section 1307 of the Real Property Actions and Proceedings Law, which was
added in 2009, requires lenders, assignees and mortgage loan servicers
that obtain a judgment of foreclosure and sale to maintain the property
if the property is vacant and abandoned, until they transfer ownership
of the property in a foreclosure sale.

Section 1308 of the RPAPL requires lenders, assignees and mortgage loan
servicers to maintain vacant and abandoned property prior to the filing
of the foreclosure action in order to address zombie properties that
lack ownership. DFS is authorized to bring a civil penalty of up to $500
per day per violation for failing to maintain the vacant and abandoned
property.

Section 1310 of the RPAPL establishes an online registry maintained by
DFS related to vacant and abandoned property owned by a lender, assignee
or mortgage loan servicer prior to a judgment of foreclosure. Lenders,
assignees and mortgage loan servicers can face penalties of up to $500
per day per violation for failure to report the property to the regis-
try.

 
JUSTIFICATION:

Vacant and abandoned residential properties securing delinquent mort-
gages fall into disrepair and harm neighboring properties and the
surrounding community. These properties are a blight on neighborhoods
because they are often boarded up, inhabited by squatters or used for
criminal purposes. When a vacant and abandoned property is not main-
tained for an extended period, there is a decline in the community's
real estate market and the state's property tax base. There is also an
increased likelihood of crime in and around the property. There are
instances of such properties being used by criminals to manufacture
and/or distribute illegal drugs.  Municipalities are often forced to
expend taxpayer funds to prevent a vacant and abandoned property from
becoming a public hazard. If a municipality is forced to care for a
significant number of vacant and abandoned properties, its budget can be
depleted quickly. This legislation expands on the 2009 and 2016 laws by
adding bank owned properties to the DFS registry of vacant and abandoned
property so that the state and municipalities can monitor maintenance
obligations. Existing law currently requires reporting of vacant and
abandoned property to the DFS registry before a judgment of foreclosure
is entered but does not apply to properties owed by the servicer post-
foreclosure.

The legislation also seeks to strengthen enforcement of maintenance
obligations by requiring DFS to perform periodic inspections of the
property, and giving DFS the ability to issue fines for the servicer's
failure to maintain the property after a judgment of foreclosure is
entered.

 
PRIOR LEGISLATIVE HISTORY:

2018: S7167/A9763- Referred to Housing, Construction, and Community
Development
 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
January 1, after the bill becomes law

2019-S3102 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3102
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 4, 2019
                                ___________
 
 Introduced  by  Sen.  BIAGGI -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT  to  amend  the  real  property  actions and proceedings law, in
   relation to directing the department of financial services to  conduct
   periodic inspections of vacant and abandoned residential real property
   required  to  be maintained by the mortgagee, authorize the department
   of financial services and  municipalities  to  impose  a  daily  civil
   penalty  upon  mortgagees  which fail to maintain abandoned and vacant
   residential real property, and requiring  lenders  having  a  duty  to
   maintain  residential  real  property  to  register with the statewide
   vacant and abandoned property registry
 
   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 is amended by adding a new subdivision 2-a to read as follows:
   2-A. THE DEPARTMENT OF FINANCIAL SERVICES SHALL CAUSE AN INSPECTION TO
 BE CONDUCTED, WITH REGARD TO COMPLIANCE  WITH  THE  PROVISIONS  OF  THIS
 SECTION,  OF  EACH  RESIDENTIAL  REAL  PROPERTY  THAT  IS SUBJECT TO THE
 PROVISIONS OF THIS SECTION WITHIN FOUR MONTHS OF THE  DATE  THE  LENDER,
 ASSIGNEE  OR  MORTGAGE LOAN SERVICER REGISTERS WITH THE STATEWIDE VACANT
 AND ABANDONED PROPERTY REGISTRY PURSUANT TO SECTION THIRTEEN HUNDRED TEN
 OF THIS ARTICLE AND EVERY SIX MONTHS THEREAFTER UNTIL THE PROPERTY IS NO
 LONGER SUBJECT TO THE PROVISIONS OF THIS SECTION.
   § 2. Subdivision 3 of 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:
   3.  The  DEPARTMENT  OF  FINANCIAL SERVICES, THE municipality in which
 such residential real  property  is  located,  any  tenant  lawfully  in
 possession,  and a board of managers of a condominium in which the prem-
 ises are located or  a  homeowners  association  if  said  premises  are
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD00881-01-9

 S. 3102                             2
 
 subject  to the rules and regulations of such an association, shall have
 the right to enforce the obligations described in this  section  in  any
 court  of competent jurisdiction after at least seven days notice to the
 plaintiff  in  the  foreclosure  action  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  to  recover  costs  incurred  as  a
 result  of  maintaining  the  property.   IN ADDITION, THE DEPARTMENT OF
 FINANCIAL SERVICES OR THE MUNICIPALITY IN WHICH THE RESIDENTIAL PROPERTY
 IS LOCATED MAY IMPOSE A CIVIL PENALTY OF FIVE HUNDRED DOLLARS  FOR  EACH
 DAY A PARTY REQUIRED TO MAINTAIN PROPERTY PURSUANT TO THIS SECTION FAILS
 TO  DO  SO  OR  FAILS  TO COMPLY WITH THE PROVISIONS OF SECTION THIRTEEN
 HUNDRED TEN OF THIS ARTICLE. 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.
   § 3. Section 1308 of the real property actions and proceedings law  is
 amended by adding a new subdivision 7-a to read as follows:
   7-A. THE DEPARTMENT OF FINANCIAL SERVICES SHALL CAUSE AN INSPECTION OF
 THE SUBJECT PROPERTY TO BE CONDUCTED, WITH REGARD TO COMPLIANCE WITH THE
 PROVISIONS  OF  THIS SECTION WITHIN FOUR MONTHS OF THE DATE THE SERVICER
 REGISTERS WITH THE STATEWIDE VACANT AND  ABANDONED  PROPERTY  ELECTRONIC
 REGISTRY  PURSUANT  TO SECTION THIRTEEN HUNDRED TEN OF THIS ARTICLE, AND
 EVERY SIX MONTHS THEREAFTER UNTIL SUCH TIME AS THE PROPERTY IS NO LONGER
 SUBJECT TO THE PROVISIONS OF THIS SECTION.
   § 4. Subdivision 2 of section 1310 of the real  property  actions  and
 proceedings  law,  as  added by section 4 of part Q of chapter 73 of the
 laws of 2016, is amended to read as follows:
   2. A lender, assignee or mortgage loan servicer shall submit or  cause
 to  be  submitted  to  the  department of financial services information
 required by the superintendent of financial services  about  any  vacant
 and  abandoned  residential  real  property,  as that term is defined in
 subdivision two of section thirteen hundred nine of this article, or  as
 the superintendent of financial services may otherwise define that term,
 OR ABOUT ANY FORECLOSED PROPERTY FOR WHICH THE LENDER, ASSIGNEE OR MORT-
 GAGE  LOAN  SERVICER HAS A DUTY TO MAINTAIN PURSUANT TO SECTION THIRTEEN
 HUNDRED SEVEN OR THIRTEEN HUNDRED EIGHT OF THIS ARTICLE  within  twenty-
 one business days of when the lender, assignee or mortgage loan servicer
 learns,  or  should have learned, that such property is vacant and aban-
 doned, OR THAT THE PROPERTY IS THE SUBJECT OF A JUDGMENT OF  FORECLOSURE
 AND  SALE  AND  REMAINS  VACANT AND ABANDONED, AS THE CASE MAY BE.  Such
 information shall, at a minimum, include: (a) the current name,  address
 and contact information for the lender, assignee or mortgage loan servi-
 cer responsible for maintaining the vacant property; (b) whether a fore-
 closure  action has been filed for the property in question, and, if so,
 the date on which the foreclosure action was commenced, OR THE DATE  THE
 JUDGEMENT OF FORECLOSURE AND SALE WAS ENTERED, AS THE CASE MAY BE; [and]
 (c)   the   last   known   address   and  contact  information  for  the
 [mortgagor(s)] MORTGAGOR OR MORTGAGORS of record; (D) THE DATE THE PROP-
 ERTY WAS DETERMINED TO BE VACANT OR ABANDONED, OR THE DATE THE  DUTY  OF
 THE  LENDER, ASSIGNEE OR MORTGAGE LOAN SERVICER TO MAINTAIN THE PROPERTY
 ACCRUED; AND (E) THE NAMES OF ALL OFFICERS OF THE  LENDER,  ASSIGNEE  OR
 MORTGAGE LOAN SERVICER UPON WHICH SERVICE OF PROCESS MAY BE MADE.
   §  5. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.

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