S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5886
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 24, 2025
                                ___________
 
 Introduced  by  M. of A. CRUZ -- read once and referred to the Committee
   on Consumer Affairs and Protection
 
 AN ACT to amend the general business law,  in  relation  to  prohibiting
   unfair residential real estate service agreements
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "prohibition of unfair real estate service agreements act".
   §  2. Legislative intent. In an effort to protect consumers from fraud
 and abuse by unscrupulous actors, this act prohibits  the  use  of  real
 estate  service  agreements  that  are unfair to an owner of residential
 real estate or to other persons who  may  become  owners  of  that  real
 estate  in the future, and further prohibits the recording of such resi-
 dential real estate service agreements so that the public  records  will
 not  be  clouded by them and provides remedies for owners who are incon-
 venienced or damaged by the recording of such agreements.
   § 3. The general business law is amended by adding a new article  36-E
 to read as follows:
                               ARTICLE 36-E
           PROHIBITION OF UNFAIR REAL ESTATE SERVICE AGREEMENTS
 SECTION 778-AAA. DEFINITIONS.
         778-BBB. PROHIBITION  AGAINST UNFAIR SERVICE AGREEMENTS; RECORD-
                    ING THEREOF.
         778-CCC. DECEPTIVE ACTS AND PRACTICES.
         778-DDD. ENFORCEMENT; ACTION BY THE ATTORNEY GENERAL.
         778-EEE. SEVERABILITY.
   § 778-AAA. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING  TERMS,
 UNLESS  THE  CONTEXT  REQUIRES OTHERWISE, SHALL HAVE THE FOLLOWING MEAN-
 INGS:
   1. "PERSON" MEANS A NATURAL PERSON, PARTNERSHIP, ASSOCIATION,  COOPER-
 ATIVE, CORPORATION, TRUST, OR OTHER LEGAL ENTITY.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05484-01-5
              

 A. 5886                             2
 
   2.  "REAL  ESTATE  SERVICE  AGREEMENT"  MEANS A WRITTEN CONTRACT UNDER
 WHICH A PERSON AGREES TO PROVIDE SERVICES IN CONNECTION WITH THE MAINTE-
 NANCE OF OR PURCHASE OR SALE OF RESIDENTIAL REAL ESTATE.
   3.  "RECORDING"  MEANS  PRESENTING  A DOCUMENT TO A RECORDING OFFICER,
 WHETHER THE COUNTY CLERK OF THE COUNTY OR THE REGISTER  OF  THE  COUNTY,
 CONSISTENT WITH THE REAL PROPERTY LAW.
   4. "RESIDENTIAL REAL ESTATE" MEANS REAL PROPERTY LOCATED IN THIS STATE
 WHICH  IS USED PRIMARILY FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES AND
 IS IMPROVED BY ONE TO FOUR DWELLING UNITS, INCLUDING CONDOMINIUM UNITS.
   5. "SERVICE PROVIDER" MEANS AN  INDIVIDUAL  OR  ENTITY  THAT  PROVIDES
 SERVICES TO A PERSON.
   6.  (A)  "UNFAIR  REAL ESTATE SERVICE AGREEMENT" MEANS ANY REAL ESTATE
 SERVICE AGREEMENT THAT IS NOT TO BE PERFORMED WITHIN ONE YEAR AFTER  THE
 TIME IT IS ENTERED INTO AND EITHER:
   (I) PURPORTS TO RUN WITH THE LAND OR TO BE BINDING ON FUTURE OWNERS OF
 INTERESTS IN THE REAL PROPERTY; OR
   (II)  ALLOWS  FOR  ASSIGNMENT  OF THE RIGHT TO PROVIDE SERVICE WITHOUT
 NOTICE TO AND CONSENT OF THE OWNER OF RESIDENTIAL REAL ESTATE; OR
   (III) PURPORTS TO CREATE A LIEN, ENCUMBRANCE, OR OTHER  REAL  PROPERTY
 SECURITY  INTEREST, OTHER THAN A MECHANICS LIEN PROPERLY ISSUED PURSUANT
 TO THE PROVISIONS OF THE LIEN LAW.
   (B) NOTWITHSTANDING THE FOREGOING, AN AGREEMENT SHALL NOT  BE  CONSID-
 ERED AN UNFAIR REAL ESTATE SERVICE AGREEMENT IF IT IS A VALID:
   (I)  HOME  WARRANTY OR SIMILAR PRODUCT THAT COVERS THE COST OF MAINTE-
 NANCE OF A MAJOR HOME SYSTEM FOR A FIXED PERIOD;
   (II) INSURANCE CONTRACT;
   (III) OPTION OR RIGHT OF REFUSAL  TO  PURCHASE  THE  RESIDENTIAL  REAL
 ESTATE;
   (IV)  DECLARATION CREATED IN THE FORMATION OF A COMMON INTEREST COMMU-
 NITY OR AN AMENDMENT THERETO;
   (V) MAINTENANCE OR REPAIR AGREEMENT ENTERED BY A  HOMEOWNERS'  ASSOCI-
 ATION IN A COMMON INTEREST COMMUNITY;
   (VI) MORTGAGE LOAN OR A COMMITMENT TO MAKE OR RECEIVE A MORTGAGE LOAN;
   (VII) SECURITY AGREEMENT UNDER THE UNIFORM COMMERCIAL CODE RELATING TO
 THE SALE OR RENTAL OF PERSONAL PROPERTY OR FIXTURES; OR
   (VIII)  CONTRACT WITH A WATER, SEWER, ELECTRICAL, TELEPHONE, CABLE, OR
 OTHER REGULATED UTILITY SERVICE PROVIDER.
   § 778-BBB. PROHIBITION AGAINST UNFAIR  SERVICE  AGREEMENTS;  RECORDING
 THEREOF. 1. NO UNFAIR REAL ESTATE SERVICE AGREEMENT SHALL BE ENFORCEABLE
 IN THE STATE.
   2.(A)  NO  PERSON  SHALL RECORD OR CAUSE TO BE RECORDED AN UNFAIR REAL
 ESTATE SERVICE AGREEMENT OR NOTICE OR MEMORANDUM THEREOF.
   (B) IF AN UNFAIR REAL ESTATE SERVICE AGREEMENT  IS  RECORDED  IN  THIS
 STATE,  IT  SHALL  NOT  PROVIDE ACTUAL OR CONSTRUCTIVE NOTICE AGAINST AN
 OTHERWISE BONA FIDE PURCHASER OR CREDITOR.
   (C) IF AN UNFAIR SERVICE AGREEMENT OR A NOTICE OR  MEMORANDUM  THEREOF
 IS  RECORDED,  ANY  PERSON WITH AN INTEREST IN THE REAL PROPERTY THAT IS
 THE SUBJECT OF THAT AGREEMENT MAY APPLY TO A COURT IN THE  COUNTY  WHERE
 THE  RECORDING  EXISTS  TO  RECORD A COURT ORDER DECLARING THE AGREEMENT
 UNENFORCEABLE.
   § 778-CCC. DECEPTIVE ACTS AND PRACTICES. ANY PERSON IN THIS STATE  WHO
 ENTERS  INTO  OR  CAUSES  A CONSUMER TO ENTER INTO AN UNFAIR REAL ESTATE
 SERVICE AGREEMENT SHALL BE CONSIDERED TO  HAVE  VIOLATED  SECTION  THREE
 HUNDRED FORTY-NINE OF THIS CHAPTER.
   § 778-DDD. ENFORCEMENT; ACTION BY THE ATTORNEY GENERAL. 1.(A) WHENEVER
 THE  ATTORNEY  GENERAL  SHALL  BELIEVE FROM EVIDENCE SATISFACTORY TO THE
 A. 5886                             3
 
 ATTORNEY GENERAL THAT ANY  PERSON  OR  AGENT  OR  EMPLOYEE  THEREOF  HAS
 ENGAGED  IN OR IS ABOUT TO ENGAGE IN ANY OF THE ACTS OR PRACTICES STATED
 TO BE UNLAWFUL PURSUANT TO THIS SECTION, THE ATTORNEY GENERAL MAY  BRING
 AN  ACTION  IN  THE NAME AND ON BEHALF OF THE PEOPLE OF THE STATE OF NEW
 YORK TO ENJOIN SUCH UNLAWFUL ACTS OR PRACTICES AND TO OBTAIN RESTITUTION
 OF ANY MONEYS OR PROPERTY OBTAINED DIRECTLY OR INDIRECTLY  BY  ANY  SUCH
 UNLAWFUL  ACTS  OR  PRACTICES.  IN SUCH ACTION PRELIMINARY RELIEF MAY BE
 GRANTED UNDER ARTICLE SIXTY-THREE OF THE CIVIL PRACTICE LAW AND RULES.
   (B) THE PROVISIONS OF THIS ARTICLE MAY BE ENFORCED CONCURRENTLY BY THE
 DIRECTOR OF A MUNICIPAL CONSUMER AFFAIRS OFFICE, OR BY THE  TOWN  ATTOR-
 NEY,  CITY  CORPORATION  COUNSEL,  OR OTHER LAWFUL DESIGNEE OF A MUNICI-
 PALITY OR LOCAL GOVERNMENT, AND ALL MONEYS COLLECTED THEREUNDER SHALL BE
 RETAINED BY SUCH MUNICIPALITY OR LOCAL GOVERNMENT.
   2. IN ADDITION TO THE RIGHT OF ACTION GRANTED TO THE ATTORNEY  GENERAL
 PURSUANT  TO  THIS SECTION, ANY PERSON WHO HAS BEEN INJURED BY REASON OF
 ANY VIOLATION OF THIS SECTION MAY BRING AN ACTION IN THEIR OWN  NAME  TO
 ENJOIN  SUCH  UNLAWFUL  ACT  OR  PRACTICE,  AN  ACTION TO RECOVER ACTUAL
 DAMAGES OR FIVE HUNDRED DOLLARS, WHICHEVER  IS  GREATER,  OR  BOTH  SUCH
 ACTIONS. THE COURT MAY, IN ITS DISCRETION, INCREASE THE AWARD OF DAMAGES
 TO  AN AMOUNT NOT TO EXCEED THREE TIMES THE ACTUAL DAMAGES, IF THE COURT
 FINDS THE DEFENDANT WILLFULLY OR KNOWINGLY VIOLATED  THIS  SECTION.  THE
 COURT MAY AWARD REASONABLE ATTORNEYS' FEES TO A PREVAILING PLAINTIFF.
   §  778-EEE. SEVERABILITY. IF ANY PROVISION OF THIS ARTICLE IS, FOR ANY
 REASON, DECLARED UNCONSTITUTIONAL OR INVALID, IN WHOLE OR  IN  PART,  BY
 ANY COURT OF COMPETENT JURISDICTION, SUCH PORTION SHALL BE DEEMED SEVER-
 ABLE,  AND  SUCH  UNCONSTITUTIONALITY OR INVALIDITY SHALL NOT AFFECT THE
 VALIDITY OF THE REMAINING PORTIONS  OF  THIS  ARTICLE,  WHICH  REMAINING
 PORTIONS SHALL CONTINUE IN FULL FORCE AND EFFECT.
   §  4.  This  act shall take effect on the ninetieth day after it shall
 have become a law.