Directs the department of financial services to periodically inspect residential real properties for which a lender has a duty to maintain; authorizes the department of financial services or the municipality to impose a $500 a day civil penalty for the failure of a lender to maintain an abandoned property that it has a duty to maintain; requires such lenders to register with the statewide vacant and abandoned property electronic registry.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8983
SPONSOR: Dilan 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 OR GENERAL IDEA OF BILL:
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 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 the title.
Section 2 of the bill amends section 1307 of the real property actions
and proceedings law to allow DFS or municipalities to, impbse 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 the 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 process.
Section 5 states that this bill shall take effect on the first of Janu-
ary after the bill becomes law.
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 disturbance in neighbor-
hoods 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 owned 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 foreclo-
sure is entered.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
January 1 of the year after it shall have become law.
STATE OF NEW YORK
________________________________________________________________________
8983
2025-2026 Regular Sessions
IN ASSEMBLY
August 13, 2025
___________
Introduced by M. of A. DILAN -- read once and referred to the Committee
on Judiciary
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 Assem-bly, do enact as follows:
1 Section 1. Section 1307 of the real property actions and proceedings
2 law is amended by adding a new subdivision 2-a to read as follows:
3 2-a. The department of financial services shall cause an inspection to
4 be conducted, with regard to compliance with the provisions of this
5 section, of each residential real property that is subject to the
6 provisions of this section within four months of the date the lender,
7 assignee or mortgage loan servicer registers with the statewide vacant
8 and abandoned property registry pursuant to section thirteen hundred ten
9 of this article and every six months thereafter until the property is no
10 longer subject to the provisions of this section.
11 § 2. Subdivision 3 of section 1307 of the real property actions and
12 proceedings law, as added by chapter 507 of the laws of 2009, is amended
13 to read as follows:
14 3. The department of financial services, the municipality in which
15 such residential real property is located, any tenant lawfully in
16 possession, and a board of managers of a condominium in which the prem-
17 ises are located or a homeowners association if said premises are
18 subject to the rules and regulations of such an association, shall have
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04364-01-5
A. 8983 2
1 the right to enforce the obligations described in this section in any
2 court of competent jurisdiction after at least seven days notice to the
3 plaintiff in the foreclosure action unless emergency repairs are
4 required. Any entity acting pursuant to this subdivision shall have a
5 cause of action in any court of competent jurisdiction against the
6 plaintiff in the foreclosure action to recover costs incurred as a
7 result of maintaining the property. In addition, the department of
8 financial services or the municipality in which the residential property
9 is located may impose a civil penalty of five hundred dollars for each
10 day a party required to maintain property pursuant to this section fails
11 to do so or fails to comply with the provisions of section thirteen
12 hundred ten of this article. The authority provided by this subdivision
13 shall be in addition to, and shall not be deemed to diminish or reduce,
14 any rights of the parties described in this section under existing law
15 against the mortgagor of such property for failure to maintain such
16 property.
17 § 3. Section 1308 of the real property actions and proceedings law is
18 amended by adding a new subdivision 7-a to read as follows:
19 7-a. The department of financial services shall cause an inspection of
20 the subject property to be conducted, with regard to compliance with the
21 provisions of this section within four months of the date the servicer
22 registers with the statewide vacant and abandoned property electronic
23 registry pursuant to section thirteen hundred ten of this article, and
24 every six months thereafter until such time as the property is no longer
25 subject to the provisions of this section.
26 § 4. Subdivision 2 of section 1310 of the real property actions and
27 proceedings law, as added by section 4 of part Q of chapter 73 of the
28 laws of 2016, is amended to read as follows:
29 2. A lender, assignee or mortgage loan servicer shall submit or cause
30 to be submitted to the department of financial services information
31 required by the superintendent of financial services about any vacant
32 and abandoned residential real property, as that term is defined in
33 subdivision two of section thirteen hundred nine of this article, or as
34 the superintendent of financial services may otherwise define that term,
35 or about any foreclosed property for which the lender, assignee or mort-
36 gage loan servicer has a duty to maintain pursuant to section thirteen
37 hundred seven or thirteen hundred eight of this article within twenty-
38 one business days of when the lender, assignee or mortgage loan servicer
39 learns, or should have learned, that such property is vacant and aban-
40 doned, or that the property is the subject of a judgment of foreclosure
41 and sale and remains vacant and abandoned, as the case may be. Such
42 information shall, at a minimum, include: (a) the current name, address
43 and contact information for the lender, assignee or mortgage loan servi-
44 cer responsible for maintaining the vacant property; (b) whether a fore-
45 closure action has been filed for the property in question, and, if so,
46 the date on which the foreclosure action was commenced, or the date the
47 judgement of foreclosure and sale was entered, as the case may be; [and]
48 (c) the last known address and contact information for the
49 [mortgagor(s)] mortgagor or mortgagors of record; (d) the date the prop-
50 erty was determined to be vacant or abandoned, or the date the duty of
51 the lender, assignee or mortgage loan servicer to maintain the property
52 accrued; and (e) the names of all officers of the lender, assignee or
53 mortgage loan servicer upon which service of process may be made.
54 § 5. This act shall take effect on the first of January next succeed-
55 ing the date on which it shall have become a law.
