Provides for summary action to foreclose upon vacant and abandoned residential real property.
TITLE OF BILL:
An act to amend the real property actions and proceedings law, in relation to summary action to foreclose mortgages on vacant and abandoned residential property
PURPOSE OF BILL:
This allows for an expedited procedure for abandoned property foreclosure for residential properties. Through this process, once the property has been deemed abandoned by the court, plaintiffs would be authorized to move for judgment and sale after a foreclosure complaint is filed and the time for all defendants to answer has expired.
SUMMARY OF PROVISIONS:
The bill would create a new § 1308 to the Real Property Actions and Proceedings Law entitled "Abandoned Property Foreclosure Summary Procedure."
* Section 1308(1)(a) would define "vacant and abandoned" residential property under the new Section as that which a mortgagee proves, through reports, affidavits, affirmations, photographs or otherwise, to the satisfaction of the Court, that the property is, vacant and has been abandoned. To do so, the property must fit the criteria of at least two of the factors listed in the bill. Furthermore, property can only be deemed vacant and abandoned if the Court finds that the property is not occupied by a tenant pursuant to a written lease agreement entered into prior to the foreclosure action.
* Section 1308(1)(b) lists the factors that would prevent a residential property from being declared vacant or abandoned including: the building is under construction or renovation, the building is occupied on a seasonal basis, or the building is the subject of a court action such as probate, quiet title or ownership dispute.
* Section 1308(2) describes how a plaintiff could allege in its complaint that a property is vacant and abandoned. This would allow for bypassing the referee process and/or settlement conference (where appropriate) at the start of the action. Should the information regarding proof of vacancy and abandonment arise after the initiation of the foreclosure action, the bill lays out the method at each stage of the matter, including for those properties defined as a home loan under RPAPL § 1304(5)(a).
* Section 1308(3) provides that a judgment of foreclosure and sale cannot be entered if at any time the court finds that the property is not vacant and abandoned or if the mortgagor files an answer, appearance or other written objection that contests the status of the property as vacant and abandoned.
* Section 1308(4) provides that should the judgment of foreclosure and sale be denied pursuant to the court's finding that the property is
not, in fact, vacant and abandoned, then all rights and procedures available would be restored.
* Section 1308(5) provides that the Section would not pre-empt, reduce or limit any rights for a locality's ability to enforce laws with respect to property maintenance.
* Section 1308(6) provides an immediate effective date.
The longer an abandoned home stays in foreclosure, the greater the chances of blight, resulting in deterioration in value to the property itself and the neighborhood at large. The longer an abandoned or vacant property languishes in foreclosure the more likely it will drag down the neighborhood it is in as well, through delinquency, blight and distressed pricing in those areas. High concentrations of vacant properties in certain parts of the State are taking a heavy toll on our towns and communities.
This bill would apply to vacant and abandoned residential properties pursuant to a newly articulated definition in the bill. Such property would be deemed vacant and abandoned when a mortgagee can prove so according to several factors listed in the bill and pursuant to court finding. The bill would allow for bypassing of the referee stage and/or settlement conference stage (where appropriate) of the foreclosure process for such properties. In such cases, after a foreclosure complaint is filed and the time for all defendants to answer has expired, the plaintiff would be authorized to move for judgment and sale, with the court compelled to compute the sum due in the judgment.
S5719; passed the Senate in 2013; referred to Rules in 2014
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
STATE OF NEW YORK ________________________________________________________________________ 4498 2015-2016 Regular Sessions IN SENATE March 25, 2015 ___________Introduced by Sen. FUNKE -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the real property actions and proceedings law, in relation to summary action to foreclose mortgages on vacant and aban- doned residential property THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property actions and proceedings law is amended by adding a new section 1308 to read as follows: S 1308. ABANDONED PROPERTY FORECLOSURE SUMMARY PROCEDURE. 1. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING DEFINITIONS SHALL APPLY: (A) "VACANT AND ABANDONED" RESIDENTIAL PROPERTY MEANS RESIDENTIAL REAL PROPERTY, AS DEFINED IN SECTION THIRTEEN HUNDRED FIVE OF THIS ARTICLE, WITH RESPECT TO WHICH THE MORTGAGEE PROVES BY REPORTS, AFFIDAVIT OR AFFIDAVITS, AFFIRMATION OR AFFIRMATIONS, PHOTOGRAPHS OR OTHERWISE, OR ANY COMBINATION THEREOF TO THE SATISFACTION OF THE COURT, THAT THE MORT- GAGED REAL PROPERTY IS VACANT AND HAS BEEN ABANDONED. REAL PROPERTY SHALL BE DEEMED "VACANT AND ABANDONED" IF THE COURT FINDS THAT THE MORT- GAGED PROPERTY IS NOT OCCUPIED BY A MORTGAGOR OR TENANT PURSUANT TO AND AS EVIDENCED BY A WRITTEN LEASE AGREEMENT IN THE TENANT'S POSSESSION ENTERED INTO PRIOR TO THE INITIATION OF THE FORECLOSURE ACTION, AND AT LEAST TWO OF THE FOLLOWING CONDITIONS EXIST: (I) THE PROPERTY IS NOT MAINTAINED BY A MORTGAGOR IN A MANNER CONSIST- ENT WITH THE STANDARDS SET FORTH IN SUBDIVISION FIVE OF SECTION THIRTEEN HUNDRED SEVEN OF THIS ARTICLE; (II) THE PROPERTY IS A RISK TO THE HEALTH, SAFETY OR WELFARE OF THE PUBLIC, OR ANY ADJOINING OR ADJACENT PROPERTY OWNERS, WHICH EXISTS DUE TO ACTS OF VANDALISM, LOITERING, CRIMINAL CONDUCT, OR PHYSICAL DESTRUCTION OR DETERIORATION OF THE PROPERTY;EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10099-01-5 S. 4498 2
(III) THE PROPERTY IS SUBJECT TO AN UNCORRECTED VIOLATION OF A MUNICI- PAL BUILDING, HOUSING OR SIMILAR CODE DURING THE YEAR PRECEDING INITI- ATION OF THE FORECLOSURE ACTION, OR AN ORDER BY ANY MUNICIPAL OR OTHER GOVERNMENTAL AUTHORITY DECLARING THE PROPERTY UNFIT FOR OCCUPANCY AND TO REMAIN VACANT AND UNOCCUPIED OR TO BE DEMOLISHED; (IV) A WRITTEN STATEMENT HAS BEEN ISSUED BY ANY MORTGAGOR EXPRESSING THE CLEAR INTENT OF ALL MORTGAGORS TO ABANDON THE PROPERTY; OR (V) ANY OTHER REASONABLE INDICIA OF ABANDONMENT. (B) A RESIDENTIAL PROPERTY SHALL NOT BE CONSIDERED "VACANT AND ABAN- DONED" IF, ON THE PROPERTY: (I) THERE IS AN UNOCCUPIED BUILDING WHICH IS UNDERGOING CONSTRUCTION, RENOVATION OR REHABILITATION THAT IS PROCEEDING DILIGENTLY TO COMPLETION, AND THE BUILDING IS IN COMPLIANCE WITH ALL APPLICABLE ORDI- NANCES, CODES, REGULATIONS AND STATUTES; (II) THERE IS A BUILDING OCCUPIED ON A SEASONAL BASIS, BUT IS OTHER- WISE SECURE; OR (III) THERE IS A BUILDING THAT IS SECURE, BUT IS THE SUBJECT OF A PROBATE ACTION, ACTION TO QUIET TITLE OR OTHER SIMILAR OWNERSHIP DISPUTE. 2. WHERE THE FORECLOSING PARTY REASONABLY BELIEVES THAT THE MORTGAGED PROPERTY IS VACANT AND ABANDONED PURSUANT TO THIS SECTION, THEN THAT FORECLOSING PARTY MAY INCLUDE AN ALLEGATION IN THE COMPLAINT THAT UPON INFORMATION AND BELIEF THE MORTGAGED PREMISES ARE VACANT AND ABANDONED PURSUANT TO THIS SECTION, AND PURSUE AWARD AND ENTRY OF A JUDGMENT OF FORECLOSURE AND SALE WITHOUT NECESSITY FOR THE APPOINTMENT OF A REFEREE TO COMPUTE AND THE REFEREE'S COMPUTATION OF THE SUM DUE AS OTHERWISE REQUIRED BY THIS ARTICLE. IF THE INFORMATION SUPPORTING THE BELIEF THAT THE MORTGAGED PREMISES ARE VACANT AND ABANDONED IS OBTAINED OR DETER- MINED AFTER INITIATION OF THE FORECLOSURE ACTION, THE COMPLAINT ALLEGA- TION THEREFOR SHALL NOT BE REQUIRED AND APPOINTMENT OF A REFEREE AND THE REFEREE'S CALCULATION OF THE SUM DUE SHALL BE BYPASSED PURSUANT TO THE FOLLOWING PROCEDURE: (A) AFTER SERVICE OF PROCESS OF THE SUMMONS AND COMPLAINT IN THE FORE- CLOSURE ACTION IS COMPLETE AND THE TIME FOR ALL DEFENDANTS OVER WHOM JURISDICTION HAS BEEN OBTAINED TO APPEAR OR ANSWER HAS EXPIRED, THE FORECLOSING PARTY MAY: (I) IF ANY ANSWER HAS BEEN INTERPOSED, EXCEPT AN ANSWER CONTESTING THE VACANT AND ABANDONED STATUS OF THE MORTGAGED PREMISES, IN WHICH EVENT THE PROCEDURE OF THIS SECTION SHALL BE UNAVAILABLE, UPON NOTICE OF MOTION OR ORDER TO SHOW CAUSE MOVE FOR SUMMARY JUDGMENT PURSUANT TO RULE THIRTY-TWO HUNDRED TWELVE OF THE CIVIL PRACTICE LAW AND RULES TO STRIKE THE ANSWER OR ANSWERS AND, IN ADDITION, FOR ISSUANCE AND ENTRY BY THE COURT OF A JUDGMENT OF FORECLOSURE AND SALE WHICH JUDGMENT SHALL HAVE BEEN SUBMITTED BY THE FORECLOSING PARTY WITH THE MOTION OR ORDER TO SHOW CAUSE, AND IN WHICH JUDGMENT THE COURT SHALL HAVE DETERMINED THAT THE MORTGAGED PROPERTY IS VACANT AND ABANDONED, COMPUTED THE SUM DUE UPON THE SUBJECT MORTGAGE DOCUMENTS AND SHALL HAVE DECLARED THAT THE MORT- GAGED PROPERTY IS TO BE SOLD AS ONE PARCEL OR IN PARCELS AS THE COURT SHALL HAVE DECIDED; OR (II) IF ONLY A GENERAL NOTICE OF APPEARANCE HAS BEEN INTERPOSED BY DEFENDANT OR DEFENDANTS, AND ANY DEFENDANT NOT INTERPOSING A GENERAL NOTICE OF APPEARANCE HAS DEFAULTED IN ANSWERING OR APPEARING, UPON NOTICE OF MOTION OR ORDER TO SHOW CAUSE MOVE FOR ISSUANCE AND ENTRY BY THE COURT OF A JUDGMENT OF FORECLOSURE AND SALE AS SET FORTH IN SUBPARA- GRAPH (I) OF THIS PARAGRAPH; ORS. 4498 3
(III) IF ONLY A NOTICE OF APPEARANCE AND WAIVER HAS BEEN INTERPOSED BY DEFENDANT OR DEFENDANTS AND ANY DEFENDANT NOT INTERPOSING A NOTICE OF APPEARANCE AND WAIVER HAS DEFAULTED IN APPEARING OR ANSWERING, UPON EX PARTE APPLICATION FOR ISSUANCE AND ENTRY BY THE COURT OF A JUDGMENT OF FORECLOSURE AND SALE AS SET FORTH IN SUBPARAGRAPH (I) OF THIS PARAGRAPH. (B) ANY MOTION OR ORDER TO SHOW CAUSE PURSUANT TO THIS SECTION SHALL CONTAIN A DECLARATION IN THE NOTICE OF MOTION OR THE ORDER TO SHOW CAUSE, AS THE CASE MAY BE, THAT: "THIS MOTION SEEKS ENTRY OF A JUDGMENT OF FORECLOSURE AND SALE PURSU- ANT TO SECTION 1308 OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW ON THE GROUND THAT THE MORTGAGED PREMISES ARE VACANT AND ABANDONED." (C) IF THE MORTGAGED PROPERTY, IN ADDITION TO BEING RESIDENTIAL PROP- ERTY, SHALL ALSO BE A HOME LOAN AS DEFINED IN PARAGRAPH (A) OF SUBDIVI- SION FIVE OF SECTION THIRTEEN HUNDRED FOUR OF THIS ARTICLE, THEN THE SETTLEMENT CONFERENCE OTHERWISE REQUIRED BY RULE THIRTY-FOUR HUNDRED EIGHT OF THE CIVIL PRACTICE LAW AND RULES SHALL BE DISPENSED WITH CONDI- TIONED UPON THE COMPLAINT HAVING PROPOUNDED THE ALLEGATION SET FORTH IN SUBDIVISION TWO OF THIS SECTION THAT THE MORTGAGED PREMISES ARE VACANT AND ABANDONED. 3. A JUDGMENT OF FORECLOSURE AND SALE UNDER THE PROCEDURE OF THIS SECTION SHALL NOT BE ENTERED IF THE COURT FINDS THAT: (A) THE PROPERTY IS NOT VACANT OR ABANDONED; OR (B) THE MORTGAGOR OR ANY OTHER DEFENDANT HAS FILED AN ANSWER, APPEAR- ANCE OR OTHER WRITTEN OBJECTION THAT IS NOT WITHDRAWN, AND A DEFENSE OR OBJECTION ASSERTED CONTESTS THE STATUS OF THE PROPERTY AS VACANT OR ABANDONED. 4. IF A JUDGMENT OF FORECLOSURE AND SALE PURSUANT TO THIS SECTION IS DENIED UPON THE COURT'S FINDING THAT THE MORTGAGED PROPERTY IS NOT VACANT AND ABANDONED, THEN ALL OTHER RIGHTS AND PROCEDURES AVAILABLE TO A FORECLOSING PARTY PURSUANT TO THIS ARTICLE MAY BE PURSUED AND ANY MOTION FOR SUMMARY JUDGMENT WHICH SHALL HAVE BEEN GRANTED AS TO AN ANSWER INTERPOSED SHALL STILL BE EFFECTIVE. 5. THIS SECTION SHALL NOT PREEMPT, REDUCE OR LIMIT ANY RIGHTS OR OBLI- GATIONS IMPOSED BY ANY LOCAL LAWS WITH RESPECT TO PROPERTY MAINTENANCE AND THE LOCALITY'S ABILITY TO ENFORCE THOSE LAWS. S 2. This act shall take effect immediately.