Assembly Bill A11579

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   11579
 
                           I N  A S S E M B L Y
 
                               June 5, 2026
                                ___________
 
 Introduced  by  COMMITTEE ON RULES -- (at request of M. of A. Walker) --
   read once and referred to the Committee on Judiciary
 
 AN ACT to amend the real property law, in  relation  to  the  rights  of
   parties  involved  in  actions  commenced  upon  real property related
   instruments
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 282 of the real property law, as added by chapter
 550 of the laws of 2010, is amended to read as follows:
   § 282. [Mortgagor's right] RIGHT to recover attorneys' fees in actions
 or proceedings arising out of  [foreclosures  of  residential  property]
 CERTAIN  REAL  PROPERTY  RELATED  INSTRUMENTS.  1.  Whenever  a covenant
 contained in [a mortgage on] AN INSTRUMENT DESCRIBED IN SUBDIVISION FOUR
 OF SECTION TWO HUNDRED THIRTEEN OF THE  CIVIL  PRACTICE  LAW  AND  RULES
 RELATING  TO  residential real property [shall provide] PROVIDES that in
 any action or proceeding [to foreclose the  mortgage]  RELATING  TO  THE
 INSTRUMENT  that  the  [mortgagee]  LENDER  may recover attorneys' fees,
 COSTS, DISBURSEMENTS and/or expenses incurred as the result of the fail-
 ure of the [mortgagor] BORROWER to perform  any  covenant  or  agreement
 contained  in  such  [mortgage]  INSTRUMENT, or that amounts paid by the
 [mortgagee] LENDER therefor shall be paid by the [mortgagor] BORROWER as
 additional payment, there shall be implied in such [mortgage] INSTRUMENT
 a covenant by the [mortgagee] LENDER to pay to the [mortgagor]  BORROWER
 the  reasonable  attorneys'  fees,  COSTS, DISBURSEMENTS and/or expenses
 incurred by the [mortgagor] BORROWER, WHICH SHALL INCLUDE FEES ON  FEES,
 as  the  result  of the failure of the [mortgagee] LENDER to perform any
 covenant or agreement on its part to be performed under  the  [mortgage]
 INSTRUMENT  or UPON PREVAILING in [the successful defense of] any action
 or proceeding PENDING OR commenced by the [mortgagee] LENDER against the
 [mortgagor] BORROWER arising out of the [contract]  INSTRUMENT,  and  an
 agreement  that  such  fees,  COSTS,  DISBURSEMENTS  and expenses may be
 recovered as provided by law in [an] ANY action OR PROCEEDING PENDING OR
 commenced BY THE BORROWER against the [mortgagee] LENDER or  by  way  of
 counterclaim  in  any  action  or proceeding PENDING OR commenced by the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD16064-01-6
 A. 11579                            2
 
 [mortgagee] LENDER against the [mortgagor] BORROWER.  Any waiver of this
 section shall be void as against public policy.
   2. For the purposes of this section[,]:
   (A) "BORROWER" SHALL MEAN ANY AND ALL BORROWERS, MORTGAGORS, OBLIGORS,
 DEBTORS,  AND GUARANTORS NAMED IN AN INSTRUMENT DESCRIBED IN SUBDIVISION
 FOUR OF SECTION TWO HUNDRED THIRTEEN  OF  THE  CIVIL  PRACTICE  LAW  AND
 RULES,  AND  SHALL ALSO INCLUDE ANY AND ALL OWNERS OR TRANSFEREES OF THE
 RESIDENTIAL REAL PROPERTY RELATED TO SUCH INSTRUMENT;
   (B) "LENDER" SHALL MEAN ANY AND  ALL  LENDERS,  MORTGAGEES,  OBLIGEES,
 NOTE HOLDERS, AND CREDITORS NAMED IN AN INSTRUMENT DESCRIBED IN SUBDIVI-
 SION  FOUR OF SECTION TWO HUNDRED THIRTEEN OF THE CIVIL PRACTICE LAW AND
 RULES, AND SHALL ALSO INCLUDE ANY ASSIGNEE OF THE INSTRUMENT OR SERVICER
 AS DEFINED UNDER 3 NYCRR § 418.1;
   (C) "residential real property" means real  property  [improved  by  a
 one-  to  four-family  residence,  a condominium that is occupied by the
 mortgagor or a cooperative unit that  is  occupied  by  the  mortgagor.]
 LOCATED  IN  THIS STATE IMPROVED BY ANY BUILDING OR STRUCTURE THAT IS OR
 MAY BE USED, IN WHOLE OR IN PART, AS THE HOME OR  RESIDENCE  OF  ONE  OR
 MORE  PERSONS, AND SHALL INCLUDE ANY BUILDING OR STRUCTURE USED FOR BOTH
 RESIDENTIAL AND COMMERCIAL PURPOSES; AND
   (D) "PREVAILING" SHALL MEAN:
   (I) RECEIPT OF ANY DECREE, DECISION, DETERMINATION, FINDING, JUDGMENT,
 ORDER, OR RULING DISMISSING AN ACTION OR PROCEEDING PENDING OR COMMENCED
 BY A LENDER, WITH OR WITHOUT PREJUDICE, ON THE COURT'S  OWN  INITIATIVE,
 AFTER TRIAL, OR UPON APPLICATION OR MOTION MADE BY THE BORROWER; OR
   (II)  RECEIPT  OF  ANY DECREE, DECISION, DETERMINATION, FINDING, JUDG-
 MENT, ORDER, OR RULING IN FAVOR OF A BORROWER, ON A COUNTERCLAIM  OR  IN
 ANY  ACTION OR PROCEEDING PENDING OR COMMENCED, CANCELLING AND DISCHARG-
 ING OF RECORD A MORTGAGE PURSUANT TO SUBDIVISION FOUR OF SECTION FIFTEEN
 HUNDRED ONE OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.