N.Y. Real Property Actions & Proceedings Law § 1308: Inspecting, securing and maintaining vacant and abandoned residential real property

§ 1308. Inspecting, securing and maintaining vacant and abandoned

residential real property. Notwithstanding any other provision of law to

the contrary, the following subdivisions of this section shall only

apply to vacant and abandoned one to four family residential real

property, and any duties and responsibilities so prescribed by this

section shall only apply to the first lien mortgage holder. Vacant and

abandoned residential real property shall be defined pursuant to section

thirteen hundred nine of this article. For each calendar year this

section shall not apply to state or federally chartered banks, savings

banks, savings and loan associations, or credit unions which: (1)

originate, own, service and maintain their mortgages or a portion

thereof; and (2) have less than three-tenths of one percent of the total

loans in the state which they either originate, own, service, or

maintain for the calendar year ending December thirty-first of the

calendar year ending two years prior to the current calendar year. For

any state or federally chartered banks, savings banks, savings and loan

associations, or credit unions which originate, own, service and

maintain between three-tenths of one percent and five-tenths of one

percent of the total loans in the state which they either originate,

own, service, or maintain for the calendar year ending December

thirty-first of the calendar year ending two years prior to the current

calendar year, the application of this section shall be prospective

only.

1. Subject to bankruptcy filings, cease and desist orders, threats of

violence, or active loss mitigation efforts, within ninety days of a

borrower's delinquency, the servicer authorized to accept payment of the

loan shall complete an exterior inspection of the subject property to

determine occupancy. Thereafter, throughout the delinquency of the loan,

the servicer shall conduct an exterior inspection of the property every

twenty-five to thirty-five days, at different times of the day.

2. If a borrower is delinquent and subject to property inspections

pursuant to subdivision one of this section, the servicer shall secure

and maintain the residential real property pursuant to subdivisions

three, four, five, six, and seven of this section where the servicer has

a reasonable basis to believe that the residential real property is

vacant and abandoned, as defined in section thirteen hundred nine of

this chapter, and is not otherwise restricted from accessing the

property.

3. Within seven business days of determining that the property is

vacant and abandoned based on the criteria set forth in subdivision two

of this section, the servicer shall post a notice on an easily

accessible part of the property that would be reasonably visible to the

borrower, property owner or occupant, and monitor the property for any

change in occupancy or contact with the borrower, property owner or

occupant, and monitor to ensure that the notice remains posted so long

as the duty to maintain applies. The posted notice shall provide the

servicer's toll free number or similar contact information.

4. If the posted notice is not responded to or persists for seven

consecutive calendar days without contact with the borrower, property

owner or occupant indicating that the property is not vacant or

abandoned, or if an emergent property condition that could reasonably

damage, destroy or harm the property arises, the servicer shall:

(a) in cases where the property contains two or more points of ingress

or egress, replace no more than one door lock to provide subsequent

access to the property;

(b) secure, replace or board up broken doors and windows;

(c) secure any part of the property that may be deemed an attractive

nuisance including, but not limited to, a water feature that could

create a drowning risk, refrigerator or freezer units, outbuildings,

wells or septic tanks;

(d) take reasonable measures to ensure that pipes, ducts, conductors,

fans and blowers do not discharge harmful gases, steam, vapor, hot air,

grease, smoke, odors or other gaseous or particulate waste directly upon

abutting or adjacent public or private property or that of another

tenant;

(e) where appropriate, winterize the applicable plumbing and heating

systems;

(f) provide basic utilities including, but not limited to, water,

electricity, natural gas, propane and sewer service, as appropriate and

when allowed by the local utility provider, that are needed for the

operation of a sump pump or dehumidifier, or when there are jointly

owned or shared utilities with adjoining properties or units, except for

turning off water service to prevent flooding or water leaks in the

property, or when other utility service could reasonably create a hazard

to the property or an unauthorized occupant or person entering the

property;

(g) remove and remediate any significant health and safety issues,

including outstanding code violations;

(h) take reasonable measures to prevent the growth of harmful mold;

(i) respond to government inquiries regarding property condition,

subject to restrictions regarding financial privacy;

(j) ensure that the notice required to be posted in subdivision three

of this section remains posted on an easily accessible part of the

property that would be reasonably visible to the borrower, property

owner or occupant so long as the duty to maintain applies; and

(k) pay homeowners' association, condominium common charges as defined

in section three hundred thirty-nine-e of the real property law or

cooperative fees as needed to maintain the property.

5. At no time shall a servicer remove personal property from the

property unless:

(a) the personal property poses a significant health and safety issue;

or

(b) there is an uncontested order to do so by a governmental entity.

6. A servicer who has determined a property to be vacant and abandoned

and who has secured the same shall take reasonable and necessary actions

to maintain the property until the earlier of the following events:

(a) an occupant of the property has asserted his or her right to

occupy the property, or the servicer or its agents have received threats

of violence;

(b) the borrower has filed for bankruptcy;

(c) a court has ordered the servicer to stop any maintenance of the

property;

(d) a homeowners' association or cooperative has prevented the

servicer from gaining access to or maintaining the property;

(e) the property has been sold or transferred to a new owner;

(f) the servicer or investor subject to the provisions of this section

has released the lien on the property; or

(g) the mortgage note has been assigned, transferred or sold to

another servicer.

7. Reasonable and necessary actions to maintain the property include,

but are not limited to:

(a) ensuring that the property remains secure pursuant to subdivisions

four, five and six of this section; and

(b) maintaining property in a manner consistent with the standards set

forth in sections 301, 302 (excluding 302.2, 302.6 and 302.8), 304.1,

304.3, 304.7, 304.10, 304.12, 304.13, 304.15, 304.16, 307.1, and 308.1

of the New York property maintenance code, to the extent that the

mortgage servicer or its agents are able to obtain necessary or required

permits or approvals.

8. (a) Violations of this section may be heard before a hearing

officer or a court of competent jurisdiction. If it shall appear to the

satisfaction of the hearing officer or the court, based on the

preponderance of the evidence, that the mortgagee or agent of a

mortgagee has violated this section, a civil penalty may be issued by

the hearing officer or the court in the amount of up to five hundred

dollars per day per property for each day the violation persisted.

(b) The superintendent of financial services may, as appropriate and

in his or her sole discretion, pursue any suspected violation of this

section. Before taking such action, the superintendent shall give the

lender, assignee or mortgage loan servicer at least seven days' notice

of the violation.

(c) In addition to the authority granted to the department of

financial services, the municipality in which such residential real

property is located, shall have the right to enforce the obligations

described in this section in any court of competent jurisdiction after

at least seven days' notice to the lender, assignee or mortgage loan

servicer, unless the property requires emergency repairs to address a

threat to public health, safety or welfare, in which case the

municipality may enter and maintain the property to cure the emergency,

provided however, notice shall be provided to the lender, assignee or

mortgage loan servicer as soon as practicable. Any municipality acting

pursuant to this subdivision shall have a cause of action in any court

of competent jurisdiction against the lender, assignee or mortgage loan

servicer to recover costs incurred as a result of maintaining the

property. Such entity shall provide the department of financial services

with written notice at least ten days prior to bringing an action

pursuant to this subdivision; provided, however, that failure to comply

with this notice requirement shall not be a defense to the entity

proceeding pursuant to this subdivision. The authority provided by this

subdivision shall be in addition to, and shall not be deemed to diminish

or reduce, any rights of the parties described in this section under

existing law against the mortgagor of such property for failure to

maintain such property. Any civil penalty imposed pursuant to paragraph

(a) of this subdivision in an action brought by a municipality pursuant

to this paragraph shall be retained by such municipality.

(d) The department of financial services is authorized and empowered

to adopt such rules and regulations as may, in the judgment of the

superintendent of financial services, be necessary for the effective

implementation, administration, operation and enforcement of this

section.

9. A servicer who peacefully enters a vacant and abandoned property in

order to maintain pursuant to this section shall be immune from

liability when such servicer is making reasonable efforts to comply with

the statute.

10. The provisions of this section are subject to federal laws, court

orders and investor and insurer guidelines.

11. For all state or federally chartered banks, savings banks, savings

and loan associations, credit unions, or servicers for which the

provisions of this section do not apply, pursuant to the opening

paragraph of this section, any agreement between such state or federally

chartered banks, savings banks, savings and loan associations, credit

unions, or servicers and the department of financial services that is

associated with the maintenance and repair of vacant and abandoned

property shall remain in full force and effect between the

aforementioned parties for so long as the terms and conditions of such

agreement remain in effect.

12. The department of financial services shall issue such rules and

regulations necessary to implement the terms of this section, including

but not limited to rules and regulations pertaining to the reporting of

financial information that state or federally chartered banks, savings

banks, savings and loan associations, or credit unions must provide to

implement this section.

13. No local law, ordinance, or resolution shall impose a duty to

maintain vacant and abandoned property as defined in section thirteen

hundred nine of this article in a manner inconsistent with the

provisions of this section that are related to maintenance as provided

under subdivisions three, four, five, six and seven of this section, or

establish related penalties nor other monetary obligations, with respect

to a state or federally chartered bank, savings bank, savings and loan

association or credit union that originates, owns, services or maintains

a mortgage related to such property.

No local law, ordinance, or resolution shall impose a duty to maintain

vacant and abandoned property upon any state or federally chartered

bank, savings bank, savings and loan association or credit union that

originates, owns, services or maintains a mortgage related to such

property for which the provisions of this section, pursuant to the

opening paragraph of this section, do not apply.