N.Y. Real Property Law § 266: Rights of purchaser or incumbrancer for valuable consideration protected

§ 266. Rights of purchaser or incumbrancer for valuable consideration

protected. This article does not in any manner affect or impair the

title of a purchaser or incumbrancer for a valuable consideration,

unless it appears that such purchaser or incumbrancer had previous

notice, whether actual or constructive, of the fraudulent intent of his

immediate grantor, or of the fraud rendering void the title of such

grantor. There shall be a rebuttable presumption that a purchaser or

incumbrancer had notice of fraud or fraudulent intent in the case of a

transfer of mortgaged real property, between a purchaser and seller who

are not associated parties, that is not accompanied by the recording

with the clerk of the county or with the commissioner of deeds in which

the property is located, of a statement, executed by the mortgagee, and

duly acknowledged, stating, substantially, that (a) a party is assuming

the seller's indebtedness secured by the mortgage; or (b) that the

indebtedness secured by the mortgage has been satisfied.

For the purposes of this section, "associated parties" means spouses,

ex-spouses, parents and children, siblings, a homeowner and that

homeowner's family trust, or a homeowner and that homeowner's

wholly-owned limited liability company.