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.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5886--A
 
                        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  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 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:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05484-02-5
              

 A. 5886--A                          2
 
   1. "PERSON" MEANS A NATURAL PERSON, PARTNERSHIP, ASSOCIATION,  COOPER-
 ATIVE, CORPORATION, TRUST, OR OTHER LEGAL ENTITY.
   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 TWO YEARS 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.
 A. 5886--A                          3
 
   § 778-DDD. ENFORCEMENT; ACTION BY THE ATTORNEY GENERAL. 1.(A) WHENEVER
 THE  ATTORNEY  GENERAL  SHALL  BELIEVE FROM EVIDENCE SATISFACTORY TO THE
 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.

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5886--B
 
                        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  --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee -- again reported from said  committee  with  amendments,  ordered
   reprinted as amended and recommitted to said committee

 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05484-04-5
 A. 5886--B                          2
 
              

   §  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.
   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 TWO YEARS 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.
 A. 5886--B                          3

   §  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. WHERE THE
 ATTORNEY GENERAL SHALL HAVE REASON TO BELIEVE THAT THERE IS  AN  ALLEGED
 VIOLATION  OF  THIS  ARTICLE  BASED UPON, AMONG OTHER THINGS, A CONSUMER
 REPORT OF AN ALLEGED VIOLATION, THE ATTORNEY GENERAL, IN THE NAME OF THE
 PEOPLE OF THE STATE OF NEW YORK,  SHALL  DISPATCH  A  CEASE  AND  DESIST
 LETTER  TO  THE  ENTITY  AT  ISSUE,  SPECIFYING THE ALLEGED VIOLATION OR
 VIOLATIONS  AND  THE  REMEDIES  TO  CURE  SUCH VIOLATION  OR  VIOLATIONS
 WITHIN  A  DESIGNATED  TIMELINE.  WHERE,  AFTER RECEIPT OF THE CEASE AND
 DESIST LETTER AND THE EXPIRATION OF SUCH DESIGNATED TIMELINE, THE ENTITY
 CONTINUES TO VIOLATE THE PROVISIONS OF THIS ARTICLE, AN APPLICATION  MAY
 BE  MADE  BY THE ATTORNEY GENERAL IN THE NAME OF THE PEOPLE OF THE STATE
 OF NEW YORK TO A COURT OR JUSTICE HAVING    JURISDICTION  BY  A  SPECIAL
 PROCEEDING  TO ISSUE AN INJUNCTION, AND UPON NOTICE TO THE RESPONDENT OF
 NOT LESS THAN FIVE DAYS, TO ENJOIN  AND RESTRAIN   THE   CONTINUANCE  OF
 SUCH VIOLATION OR VIOLATIONS; AND IF IT SHALL APPEAR TO THE SATISFACTION
 OF  THE  COURT  OR JUSTICE THAT  THE  RESPONDENT  HAS, IN FACT, VIOLATED
 THIS ARTICLE, AN INJUNCTION MAY BE ISSUED  BY  SUCH  COURT  OR  JUSTICE,
 ENJOINING AND RESTRAINING ANY FURTHER VIOLATION, WITHOUT REQUIRING PROOF
 THAT ANY PERSON HAS, IN FACT, BEEN INJURED OR DAMAGED THEREBY.  WHENEVER
 THE COURT SHALL DETERMINE THAT A VIOLATION OF THIS ARTICLE HAS OCCURRED,
 THE  COURT  MAY  IMPOSE  A  CIVIL  PENALTY OF NOT MORE THAN ONE THOUSAND
 DOLLARS FOR EACH VIOLATION. THIS SECTION SHALL NOT BE CONSTRUED TO LIMIT
 ANY OTHER CRIMINAL OR CIVIL LIABILITY SUCH  ENTITY  MAY  BE  SUBJECT  TO
 UNDER LAW.
   §  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.