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.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5886C
SPONSOR: Cruz TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
unfair residential real estate service agreements
PURPOSE:
To protect homeowners from deceptive or unfair real estate service
agreements that create unnecessary liens, encumbrances, or binding obli-
gations on residential real property.
SUMMARY OF PROVISIONS:
*Section 1: Provides the short title of the bill as the "Prohibition of
Unfair Real Estate Service Agreements Act."
*Section 2: States legislative intent to prohibit the use and recording
of unfair residential real'estate service agreements to prevent fraud
and consumer harm.
*Section 3: Adds a new Article 36-E to the General Business Law:
*Defines terms such as "unfair real estate service agreements," "record-
ing," and "residential real estate."
*Prohibits agreements that bind future property owners, allow assignment
without owner consent, or create invalid liens or encumbrances.
*Declares that unfair agreements cannot be enforced or recorded, and
allows affected parties to seek court orders declaring such agreements
void.
*Designates such agreements as deceptive acts under § 349 of the General
Business Law.
*Grants enforcement authority to the attorney general and municipal
Officials.
*Section 4: Includes a severability clause to ensure remaining
provisions remain valid if parts of the act are deemed invalid.
*Section 5: Establishes the act's effective date as 90 days after becom-
ing law.
JUSTIFICATION:
Homeowners are increasingly targeted by predatory service providers who
use deceptive agreements to impose burdensome and hidden obligations on
residential properties. These agreements often:
*Purport to run with the land, unfairly binding future owners. *Create
invalid liens or encumbrances that cloud property titles.
'*Allow assignment without homeowner consent, further complicating
resolution.
This legislation protects consumers by prohibiting these practices and
ensuring that any improperly recorded agreements are deemed unenforcea-
ble. it also provides legal remedies for affected parties and enforce-
ment mechanisms to deter such predatory actions.
LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS:
Minimal administrative costs anticipated for implementation and enforce-
ment.
EFFECTIVE DATE:
This act shall take effect on the 90th day after it becomes law.
