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A00909 Summary:

COSPNSRColton, Dinowitz, Hyndman, Taylor
Amd §11-404, NYC Ad Cd
Places additional notice requirements on the city when conveying a property to a third party.
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A00909 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  TITLE OF BILL: An act to amend the administrative code of the city of New York, in relation to foreclosure by action in rem   PURPOSE OR GENERAL IDEA OF BILL: The bill requires a municipality intending to foreclose upon a residen- tial property through an action in rem and then transfer it to a third party to notify both the owners and tenants.   SUMMARY OF PROVISIONS: Section one amends section 11-404 of the administrative code of the city of New York by adding a new subdivision which requires municipalities to notify the owners, tenants, and property managers of properties before the municipality attempts an in rem foreclosure. It would also prohibit a municipality from pursing an in rem foreclosure if the notice require- ments have not been met.   JUSTIFICATION: In New York City, residential buildings that have a certain number of violations and have fallen behind on taxes owed to the city are subject to foreclosure in rem. At the city's discretion, instead of seizing the property directly, the city can have the property transferred directly to a third party who is supposed to maintain the residential building, in a process known as Third Party Transfer. While Third Party Transfer is supposed to be a method to improve residential buildings facing mismanagement or neglect by landlords shirking their duty. The process has faced significant criticism for both stripping equity from residents who were unaware of issues or the impending foreclosure,and foreclosing on buildings that are not eligible. Residents are often not aware that their building is facing Third Party Transfer and only find out when a new owner shows up. When the residents are also the owners, such as cooperatives, then Third Party Transfer strips the residents of the ownership and equity they have worked so hard to attend. To lose your homeownership because a lackluster board is not addressing violations is heartbreaking, and potentially unnecessary. Increased notice to not just the owners, but also the residents would give the residents the opportunity to challenge improper foreclosure and address the violations that have brought their homes to this situation.   PRIOR LEGISLATIVE HISTORY: 02/08/21 referred to judiciary 01/05/22 referred to judiciary New bill for 2020.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Undetermined.   EFFECTIVE DATE: This bill shall take effect on the ninetieth day after it shall have become law.
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A00909 Text:

                STATE OF NEW YORK
                               2023-2024 Regular Sessions
                   IN ASSEMBLY
                                    January 11, 2023
        Introduced by M. of A. JOYNER -- read once and referred to the Committee
          on Judiciary
        AN  ACT  to  amend  the  administrative code of the city of New York, in
          relation to foreclosure by action in rem
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Section  11-404 of the administrative code of the city of
     2  New York is amended by adding a new subdivision c to read as follows:
     3    c. (1) If the city shall intend for a property defined in  subdivision
     4  b  of  this section to be conveyed to a third party pursuant to subdivi-
     5  sion b of section 11-412.1 of this chapter the city or supervising agen-
     6  cy shall first do the following to address outstanding issues with  such
     7  property:
     8    (i)  Notify the owner or board of a company that owns the property, if
     9  there is one, and the property management entity, if there  is  one,  of
    10  any and all matters that could result in a significant action; and
    11    (ii)  Notify  residents,  individually and separately from attempts to
    12  notify the owner or the board, that significant adverse actions  against
    13  the  company  or its real estate are imminent and describe the deficien-
    14  cies that have made such adverse actions possible.
    15    (2) Failure to meet the requirements of this subdivision shall prevent
    16  the property from being conveyed to a third party.
    17    (3) If an owner or board of a company that owns the property  receives
    18  notice  from  a  city or supervising agency it shall notify the property
    19  management entity and all tenants and shareholders separately  from  any
    20  notification  by the city or supervising agency. If the property manage-
    21  ment entity receives notice, it shall notify the owner or board.
    22    § 2. This act shall take effect on the ninetieth day  after  it  shall
    23  have become a law.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
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