N.Y. Real Property Law § 254-b: Limitation on late charges

§ 254-b. Limitation on late charges. 1. If a bond or note, or the

mortgage on real property, heretofore or hereafter made, improved by a

one to six family residence occupied by the owner, securing the payment

of same, or a note representing a loan for the purpose of financing the

purchase of an ownership interest in, and proprietary lease from, a

corporation or partnership formed for the purpose of the cooperative

ownership of residential real estate, contains a provision whereby the

mortgagee or lender retains the right to collect a late charge on any

instalment which has become due and remains unpaid, such charge on any

such delinquent instalment, regardless of the period it remains in

default, shall not exceed and shall only be enforced to the extent of

two percent of such delinquent instalment; provided, however, that no

charge shall be imposed on any instalment paid within fifteen days after

the due date. No such late charge shall be deducted from any regular

instalment payment by the mortgagor or borrower, but shall be separately

charged and collected by the mortgagee or lender. In the absence of a

specific provision in a bond, note or mortgage no late charge on any

delinquent instalment shall be assessed or collected. The term

"instalment" shall include amounts representing interest, amortization

of principal and payments in respect of insurance premiums, taxes and

utility charges if the bond, note or mortgage provides for collection

thereof by the mortgagee.

2. The provisions in this section shall not apply to any loan or

forbearance insured by the federal housing commissioner or for which a

commitment to insure has been made by the federal housing commissioner

or to any loan or forbearance insured or guaranteed pursuant to the

provisions of an act of congress entitled "Servicemen's Readjustment Act

of 1944", or to the extent the provisions of this section are

inconsistent with any other federal law or regulation.

3. If any provision of this section, or the application of such

provision to any individual, company, corporation, or circumstance,

shall be held invalid, the remainder of this section, and the

application of such section to individuals, companies, corporations, or

circumstances other than those to which it is held invalid, shall not be

affected thereby.