Prohibits pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership where over fifty percent of the units are shareholder occupied.
STATE OF NEW YORK
________________________________________________________________________
707
2023-2024 Regular Sessions
IN ASSEMBLY
January 11, 2023
___________
Introduced by M. of A. DINOWITZ, CARROLL -- read once and referred to
the Committee on Election Law
AN ACT to amend the general obligations law, in relation to pre-payment
penalties for mortgages secured by real property owned in a cooper-
ative form of ownership
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph b of subdivision 3 of section 5-501 of the gener-
2 al obligations law, as amended by chapter 472 of the laws of 2008, is
3 amended to read as follows:
4 b. notwithstanding any other provision of law, the unpaid balance of
5 the loan or forbearance may be prepaid, in whole or in part, at any
6 time. If prepayment is made on or after one year from the date the loan
7 or forbearance is made, no penalty may be imposed. If prepayment is made
8 prior to such time, no penalty may be imposed unless provision therefor
9 is expressly made in the loan contract, provided that no penalty may be
10 imposed if prohibited by sections six-l and six-m of the banking law. No
11 prepayment penalty or fee shall be charged or collected on a loan or
12 forbearance secured by real property owned in a cooperative form of
13 ownership where over fifty percent of the units are shareholder occu-
14 pied. Such prepayment penalty shall be unenforceable. In all cases, the
15 right of prepayment shall be stated in the instrument evidencing the
16 loan or forbearance, provided, however, that the provisions of this
17 subdivision shall not apply to the extent such provisions are inconsist-
18 ent with any federal law or regulation.
19 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00740-01-3
