Establishes requirements for purchase agreements for residential real property by which the buyer must maintain the property while full payment is outstanding.
STATE OF NEW YORK
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7011
IN SENATE
April 20, 2012
___________
Introduced by Sen. YOUNG -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary
AN ACT to amend the real property law, in relation to establishing
requirements for land contracts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The real property law is amended by adding a new section
2 246-a to read as follows:
3 § 246-a. Requirements for land contracts. 1. Definition. For the
4 purposes of this section, "land contract" means any written agreement
5 executed between a buyer and seller of residential real property or a
6 parcel of real property for residential use, by installment payments,
7 with a deposit of one thousand dollars or more, and a term of ninety
8 days or more, pursuant to which such buyer is responsible for all
9 repairs upon the real property and will be granted title to the real
10 property upon the full payment of the stated purchase price. Such term
11 shall not include a mortgage pursuant to which the seller executes and
12 records a deed to the real property upon the buyer's execution and
13 recording of a mortgage upon the real property; nor shall such term
14 include a lease of real property pursuant to which the lessor is obli-
15 gated to make repairs and pay real property taxes upon such property
16 until the lessee tenders the stated purchase price.
17 2. Disclosure notice. Not less than ten days prior to the execution of
18 a land contract, the seller shall provide to the buyer a written notice
19 delivered by certified mail. Such notice shall be entitled "Land
20 Contract-Consumer Caution and Counseling Notice" and shall include the
21 following notices:
22 (a) "You can lose this property if you fail to make the payments and
23 meet the other requirements of the land contract.";
24 (b) "You can lose this property if the seller of this property loses
25 title to this property due to the foreclosure of an existing mortgage or
26 other lien, or other legal actions which may be brought against the
27 seller by creditors or others.";
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD15370-02-2
S. 7011 2
1 (c) "You can lose this property if other persons have a legal interest
2 or claim against the property.";
3 (d) "Under the terms of this contract you are responsible for repairs
4 to this property and therefore you should have the property adequately
5 inspected before entering into this contract.";
6 (e) The name and addresses of the holders of any mortgages on the
7 property whose consent is required before the property can be sold;
8 (f) The existence of any mortgages or liens of record on the property;
9 and
10 (g) The unpaid property taxes or assessments on such property, if any.
11 3. Mandatory provisions. Every land contract shall provide:
12 (a) that if the seller is to provide the buyer with escrow payments,
13 the seller must maintain the escrow funds in a separate account and
14 provide the buyer with an annualized accounting and proof of taxes paid;
15 (b) that if the seller does not record the land contract within five
16 days of the execution of such contract, the buyer shall be granted a
17 right of recovery against the seller for all payments made under the
18 land contract;
19 (c) that the buyer must be provided with a copy of the receipt for
20 filing the land contract with the county clerk; and
21 (d) that the seller must provide the buyer with written receipts for
22 any payments made under the land contract, including down payments.
23 4. Recording requirement. Within five business days after the
24 execution of a land contract, such contract shall be recorded by the
25 seller in the county clerk's office in the county in which the real
26 property is located. The seller shall provide the buyer with a copy of
27 the receipt issued for such recording.
28 5. Prohibited terms. No land contract shall contain the following:
29 (a) a provision which imposes excessive late fees;
30 (b) a provision in which the buyer consents to his or her removal from
31 the contract by the buyer without the option of judicial intervention or
32 a provision in which the buyer automatically consents to summary
33 proceedings by the seller;
34 (c) a provision in which the buyer forfeits equity in the event of
35 default; or
36 (d) a provision which waives any of the provisions of this section.
37 6. Enforcement. The attorney general may commence an action in the
38 name of the People of the state of New York to enforce the terms of this
39 section. A court may grant injunctive, declaratory or other equitable
40 relief in any such action brought to enforce the provisions of this
41 section.
42 § 2. This act shall take effect on the one hundred twentieth day after
43 it shall have become a law.