New York SB 4498: Provides for Summary Action to Foreclose Upon Vacant and Abandoned Residential Real Property
On May 6, NY SB 4498 was advanced to a third reading. If enacted, the bill would amend the Real Property Actions and Proceedings Law for an expedited procedure for abandoned property foreclosure for residential properties.
BILL NUMBER: S4498
TITLE OF BILL:
An act to amend the real property actions and proceedings law, in relation to summary action to foreclose mortgages on vacant and abandoned residential property
PURPOSE OF BILL:
This allows for an expedited procedure for abandoned property foreclosure for residential properties. Through this process, once the property has been deemed abandoned by the court, plaintiffs would be authorized to move for judgment and sale after a foreclosure complaint is filed and the time for all defendants to answer has expired.
SUMMARY OF PROVISIONS:
The bill would create a new § 1308 to the Real Property Actions and Proceedings Law entitled “Abandoned Property Foreclosure Summary Procedure.”
* Section 1308(1)(a) would define “vacant and abandoned” residential property under the new Section as that which a mortgagee proves, through reports, affidavits, affirmations, photographs or otherwise, to the satisfaction of the Court, that the property is, vacant and has been abandoned. To do so, the property must fit the criteria of at least two of the factors listed in the bill. Furthermore, property can only be deemed vacant and abandoned if the Court finds that the property is not occupied by a tenant pursuant to a written lease agreement entered into prior to the foreclosure action.
* Section 1308(1)(b) lists the factors that would prevent a residential property from being declared vacant or abandoned including: the building is under construction or renovation, the building is occupied on a seasonal basis, or the building is the subject of a court action such as probate, quiet title or ownership dispute.
* Section 1308(2) describes how a plaintiff could allege in its complaint that a property is vacant and abandoned. This would allow for bypassing the referee process and/or settlement conference (where appropriate) at the start of the action. Should the information regarding proof of vacancy and abandonment arise after the initiation of the foreclosure action, the bill lays out the method at each stage of the matter, including for those properties defined as a home loan under RPAPL § 1304(5)(a).
* Section 1308(3) provides that a judgment of foreclosure and sale cannot be entered if at any time the court finds that the property is not vacant and abandoned or if the mortgagor files an answer, appearance or other written objection that contests the status of the property as vacant and abandoned.
* Section 1308(4) provides that should the judgment of foreclosure and sale be denied pursuant to the court’s finding that the property is
not, in fact, vacant and abandoned, then all rights and procedures available would be restored.
* Section 1308(5) provides that the Section would not pre-empt, reduce or limit any rights for a locality’s ability to enforce laws with respect to property maintenance.
* Section 1308(6) provides an immediate effective date.
The longer an abandoned home stays in foreclosure, the greater the chances of blight, resulting in deterioration in value to the property itself and the neighborhood at large. The longer an abandoned or vacant property languishes in foreclosure the more likely it will drag down the neighborhood it is in as well, through delinquency, blight and distressed pricing in those areas. High concentrations of vacant properties in certain parts of the State are taking a heavy toll on our towns and communities.
This bill would apply to vacant and abandoned residential properties pursuant to a newly articulated definition in the bill. Such property would be deemed vacant and abandoned when a mortgagee can prove so according to several factors listed in the bill and pursuant to court finding. The bill would allow for bypassing of the referee stage and/or settlement conference stage (where appropriate) of the foreclosure process for such properties. In such cases, after a foreclosure complaint is filed and the time for all defendants to answer has expired, the plaintiff would be authorized to move for judgment and sale, with the court compelled to compute the sum due in the judgment.
Please click here to view the full text of SB 4498 online.
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.