Prohibits unfair residential real estate service agreements which are certain service agreements which are not to be performed within two years following the time such agreement is entered into.
STATE OF NEW YORK
________________________________________________________________________
6361--B
2025-2026 Regular Sessions
IN SENATE
March 11, 2025
___________
Introduced by Sens. BAILEY, COMRIE -- read twice and ordered printed,
and when printed to be committed to the Committee on Consumer
Protection -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee -- committee discharged,
bill amended, 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:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "prohibition of unfair real estate service agreements act".
3 § 2. Legislative intent. In an effort to protect consumers from fraud
4 and abuse by unscrupulous actors, this act prohibits the use of real
5 estate service agreements that are unfair to an owner of residential
6 real estate or to other persons who may become owners of that real
7 estate in the future, and further prohibits the recording of such resi-
8 dential real estate service agreements so that the public records will
9 not be clouded by them and provides remedies for owners who are incon-
10 venienced or damaged by the recording of such agreements.
11 § 3. The general business law is amended by adding a new article 36-E
12 to read as follows:
13 ARTICLE 36-E
14 PROHIBITION OF UNFAIR REAL ESTATE SERVICE AGREEMENTS
15 Section 778-aaa. Definitions.
16 778-bbb. Prohibition against unfair service agreements; record-
17 ing thereof.
18 778-ccc. Deceptive acts and practices.
19 778-ddd. Enforcement; action by the attorney general.
20 778-eee. Severability.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05484-07-5
S. 6361--B 2
1 § 778-aaa. Definitions. As used in this article, the following terms,
2 unless the context requires otherwise, shall have the following mean-
3 ings:
4 1. "Person" means a natural person, partnership, association, cooper-
5 ative, corporation, trust, or other legal entity.
6 2. "Real estate service agreement" means a written contract under
7 which a person agrees to provide services in connection with the mainte-
8 nance of or purchase or sale of residential real estate.
9 3. "Recording" means presenting a document to a recording officer,
10 whether the county clerk of the county or the register of the county,
11 consistent with the real property law.
12 4. "Residential real estate" means real property located in this state
13 which is used primarily for personal, family, or household purposes and
14 is improved by one to four dwelling units, including condominium units.
15 5. "Service provider" means an individual or entity that provides
16 services to a person.
17 6. (a) "Unfair real estate service agreement" means any real estate
18 service agreement that is not to be performed within two years after the
19 time it is entered into and either:
20 (i) purports to run with the land or to be binding on future owners of
21 interests in the real property; or
22 (ii) allows for assignment of the right to provide service without
23 notice to and consent of the owner of residential real estate; or
24 (iii) purports to create a lien, encumbrance, or other real property
25 security interest, other than a mechanics lien properly issued pursuant
26 to the provisions of the lien law; or
27 (iv) is a real estate listing agreement as defined in paragraph e of
28 subdivision one of section four hundred forty-three of the real property
29 law.
30 (b) Notwithstanding the foregoing, an agreement shall not be consid-
31 ered an unfair real estate service agreement if it is a valid:
32 (i) home warranty or similar product that covers the cost of mainte-
33 nance of a major home system for a fixed period;
34 (ii) insurance contract;
35 (iii) option or right of refusal to purchase the residential real
36 estate;
37 (iv) declaration created in the formation of a common interest commu-
38 nity or an amendment thereto;
39 (v) maintenance or repair agreement entered by a homeowners' associ-
40 ation in a common interest community;
41 (vi) mortgage loan or a commitment to make or receive a mortgage loan;
42 (vii) security agreement under the uniform commercial code relating to
43 the sale or rental of personal property or fixtures; or
44 (viii) contract with a water, sewer, electrical, telephone, cable, or
45 other regulated utility service provider.
46 § 778-bbb. Prohibition against unfair service agreements; recording
47 thereof. 1. No unfair real estate service agreement shall be enforceable
48 in the state.
49 2.(a) No person shall record or cause to be recorded an unfair real
50 estate service agreement or notice or memorandum thereof.
51 (b) If an unfair real estate service agreement is recorded in this
52 state, it shall not provide actual or constructive notice against an
53 otherwise bona fide purchaser or creditor.
54 (c) If an unfair service agreement or a notice or memorandum thereof
55 is recorded, any person with an interest in the real property that is
56 the subject of that agreement may apply to a court in the county where
S. 6361--B 3
1 the recording exists to record a court order declaring the agreement
2 unenforceable.
3 § 778-ccc. Deceptive acts and practices. Any person in this state who
4 enters into or causes a consumer to enter into an unfair real estate
5 service agreement shall be considered to have violated section three
6 hundred forty-nine of this chapter.
7 § 778-ddd. Enforcement; action by the attorney general. Where the
8 attorney general shall have reason to believe that there is an alleged
9 violation of this article based upon, among other things, a consumer
10 report of an alleged violation, the attorney general, in the name of the
11 people of the state of New York, shall dispatch a cease and desist
12 letter to the entity at issue, specifying the alleged violation or
13 violations and the remedies to cure such violation or violations
14 within a designated timeline. Where, after receipt of the cease and
15 desist letter and the expiration of such designated timeline, the entity
16 continues to violate the provisions of this article, an application may
17 be made by the attorney general in the name of the people of the state
18 of New York to a court or justice having jurisdiction by a special
19 proceeding to issue an injunction, and upon notice to the respondent of
20 not less than five days, to enjoin and restrain the continuance of
21 such violation or violations; and if it shall appear to the satisfaction
22 of the court or justice that the respondent has, in fact, violated
23 this article, an injunction may be issued by such court or justice,
24 enjoining and restraining any further violation, without requiring proof
25 that any person has, in fact, been injured or damaged thereby. Whenever
26 the court shall determine that a violation of this article has occurred,
27 the court may impose a civil penalty of not more than one thousand
28 dollars for each violation. This section shall not be construed to limit
29 any other criminal or civil liability such entity may be subject to
30 under law.
31 § 778-eee. Severability. If any provision of this article is, for any
32 reason, declared unconstitutional or invalid, in whole or in part, by
33 any court of competent jurisdiction, such portion shall be deemed sever-
34 able, and such unconstitutionality or invalidity shall not affect the
35 validity of the remaining portions of this article, which remaining
36 portions shall continue in full force and effect.
37 § 4. This act shall take effect on the ninetieth day after it shall
38 have become a law.
