What's happening
This bill requires the Department of Financial Services to inspect vacant and abandoned residential properties, imposes penalties for noncompliance, and expands property registration requirements.
Why it matters
Increases state oversight. By requiring the Department of Financial Services (DFS) to conduct regular inspections of vacant and abandoned residential properties, the bill aims to ensure greater accountability and compliance from mortgage holders responsible for property upkeep.
Creates stronger incentives to maintain properties. Imposing a daily $500 civil penalty on banks and mortgage servicers that fail to maintain properties or register them as required adds significant financial pressure, which could deter neglect and reduce neighborhood blight.
Expands transparency and information sharing. The expanded property registry will include more detailed information, such as officer names for service of process and precise dates when properties become vacant or subject to maintenance duties, making it easier for municipalities and affected residents to identify responsible parties.
Empowers local and state authorities. Both municipalities and DFS are given explicit authority to enforce maintenance standards and collect penalties, potentially leading to more consistent enforcement and improving the condition of distressed properties statewide.
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Who cares
Headline styles
Inspect Homes Lenders Must Maintain
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to housing, construction and community development
- Referred to housing, construction and community development
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Inspect Bank-Owned Homes Regularly
In Assembly Committee · Judiciary · Sponsor Helene Weinstein
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3102
2019-2020 Regular Sessions
IN SENATE
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 Assembly, 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 premises 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 mortgage loan servicer has a duty to maintain pursuant to section thirteen hundred seven or thirteen hundred eight of this article within twentyone business days of when the lender, assignee or mortgage loan servicer learns, or should have learned, that such property is vacant and abandoned, 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 servicer responsible for maintaining the vacant property; (b) whether a foreclosure 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 property 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 succeeding the date on which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
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.
Read the full memo (932 words)
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
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.