N.Y. Public Authorities Law § 1804-a: Deed in lieu of foreclosure

§ 1804-a. Deed in lieu of foreclosure. 1. The authority is hereby

authorized to require at the time of the making of the loan or issuance

of the loan guarantee, or at any time thereafter, in a form acceptable

to it, a deed to all rights and interests in the real or personal

property, as a security interest, such deed to be termed a "deed in lieu

of foreclosure", and is empowered hereby to record such deed upon a

default in the payment or terms of any loan made or guaranteed by the

authority. By such recording title to and all rights of ownership in

such property shall be thereby transferred to the authority

notwithstanding the existence of any other deeds which are, or may be,

recorded after the filing of a notice by the authority concerning the

existence of such deed in lieu of foreclosure in accordance with

subdivision six of this section and such later recorded deeds except for

the deed in lieu of foreclosure shall be void and unenforceable.

2. Notwithstanding such transfer, all liens upon such property which

are duly perfected prior to the recording of such deed in lieu of

foreclosure, including any lien of the authority, shall continue in full

effect and shall be subject to foreclosure at the suit of any of the

lienholders, including the authority, and such lienholders' mortgage or

other security interest shall not be deemed merged or unenforceable by

such transfer.

3. Such deed given prior to recording shall be fully effective in

passing title and all rights of ownership upon recording thereof by the

authority notwithstanding the passage of time or changes in the

ownership and officers of the project owner.

4. Notice that such deed in lieu of foreclosure exists shall be

recorded in the office of the clerk of the county where such real or

personal property is situated and shall be in the form prescribed in

subdivision six of this section.

5. After the recording of such deed by the authority, the authority

shall commence a foreclosure action upon its lien within one hundred

twenty days in accordance with the real property actions and proceedings

law. The grantor and former project owner may commence an action to

compel the authority to foreclose its lien after such period of time,

and is entitled to the excess of funds received from the foreclosure

sale over the total liens outstanding on the property.

6. Such notice shall be in the form of a deed, duly acknowledged by

the grantor and stating on its face "This is a security interest held by

the New York job development authority and shall pass title to the

within described property upon the recording of such deed in accordance

with section eighteen hundred four-a of the public authorities law".