§ 1308 — Inspecting, securing and maintaining vacant and abandoned residential real property

§ 1308. Inspecting, securing and maintaining vacant and abandoned\nresidential real property. Notwithstanding any other provision of law to\nthe contrary, the following subdivisions of this section shall only\napply to vacant and abandoned one to four family residential real\nproperty, and any duties and responsibilities so prescribed by this\nsection shall only apply to the first lien mortgage holder. Vacant and\nabandoned residential real property shall be defined pursuant to section\nthirteen hundred nine of this article. For each calendar year this\nsection shall not apply to state or federally chartered banks, savings\nbanks, savings and loan associations, or credit unions which: (1)\noriginate, own, service and maintain their mortgages or a portion\nthereof; and (2) have less than three-tenths of one percent of the total\nloans in the state which they either originate, own, service, or\nmaintain for the calendar year ending December thirty-first of the\ncalendar year ending two years prior to the current calendar year. For\nany state or federally chartered banks, savings banks, savings and loan\nassociations, or credit unions which originate, own, service and\nmaintain between three-tenths of one percent and five-tenths of one\npercent of the total loans in the state which they either originate,\nown, service, or maintain for the calendar year ending December\nthirty-first of the calendar year ending two years prior to the current\ncalendar year, the application of this section shall be prospective\nonly.\n 1. Subject to bankruptcy filings, cease and desist orders, threats of\nviolence, or active loss mitigation efforts, within ninety days of a\nborrower's delinquency, the servicer authorized to accept payment of the\nloan shall complete an exterior inspection of the subject property to\ndetermine occupancy. Thereafter, throughout the delinquency of the loan,\nthe servicer shall conduct an exterior inspection of the property every\ntwenty-five to thirty-five days, at different times of the day.\n 2. If a borrower is delinquent and subject to property inspections\npursuant to subdivision one of this section, the servicer shall secure\nand maintain the residential real property pursuant to subdivisions\nthree, four, five, six, and seven of this section where the servicer has\na reasonable basis to believe that the residential real property is\nvacant and abandoned, as defined in section thirteen hundred nine of\nthis chapter, and is not otherwise restricted from accessing the\nproperty.\n 3. Within seven business days of determining that the property is\nvacant and abandoned based on the criteria set forth in subdivision two\nof this section, the servicer shall post a notice on an easily\naccessible part of the property that would be reasonably visible to the\nborrower, property owner or occupant, and monitor the property for any\nchange in occupancy or contact with the borrower, property owner or\noccupant, and monitor to ensure that the notice remains posted so long\nas the duty to maintain applies. The posted notice shall provide the\nservicer's toll free number or similar contact information.\n 4. If the posted notice is not responded to or persists for seven\nconsecutive calendar days without contact with the borrower, property\nowner or occupant indicating that the property is not vacant or\nabandoned, or if an emergent property condition that could reasonably\ndamage, destroy or harm the property arises, the servicer shall:\n (a) in cases where the property contains two or more points of ingress\nor egress, replace no more than one door lock to provide subsequent\naccess to the property;\n (b) secure, replace or board up broken doors and windows;\n (c) secure any part of the property that may be deemed an attractive\nnuisance including, but not limited to, a water feature that could\ncreate a drowning risk, refrigerator or freezer units, outbuildings,\nwells or septic tanks;\n (d) take reasonable measures to ensure that pipes, ducts, conductors,\nfans and blowers do not discharge harmful gases, steam, vapor, hot air,\ngrease, smoke, odors or other gaseous or particulate waste directly upon\nabutting or adjacent public or private property or that of another\ntenant;\n (e) where appropriate, winterize the applicable plumbing and heating\nsystems;\n (f) provide basic utilities including, but not limited to, water,\nelectricity, natural gas, propane and sewer service, as appropriate and\nwhen allowed by the local utility provider, that are needed for the\noperation of a sump pump or dehumidifier, or when there are jointly\nowned or shared utilities with adjoining properties or units, except for\nturning off water service to prevent flooding or water leaks in the\nproperty, or when other utility service could reasonably create a hazard\nto the property or an unauthorized occupant or person entering the\nproperty;\n (g) remove and remediate any significant health and safety issues,\nincluding outstanding code violations;\n (h) take reasonable measures to prevent the growth of harmful mold;\n (i) respond to government inquiries regarding property condition,\nsubject to restrictions regarding financial privacy;\n (j) ensure that the notice required to be posted in subdivision three\nof this section remains posted on an easily accessible part of the\nproperty that would be reasonably visible to the borrower, property\nowner or occupant so long as the duty to maintain applies; and\n (k) pay homeowners' association, condominium common charges as defined\nin section three hundred thirty-nine-e of the real property law or\ncooperative fees as needed to maintain the property.\n 5. At no time shall a servicer remove personal property from the\nproperty unless:\n (a) the personal property poses a significant health and safety issue;\nor\n (b) there is an uncontested order to do so by a governmental entity.\n 6. A servicer who has determined a property to be vacant and abandoned\nand who has secured the same shall take reasonable and necessary actions\nto maintain the property until the earlier of the following events:\n (a) an occupant of the property has asserted his or her right to\noccupy the property, or the servicer or its agents have received threats\nof violence;\n (b) the borrower has filed for bankruptcy;\n (c) a court has ordered the servicer to stop any maintenance of the\nproperty;\n (d) a homeowners' association or cooperative has prevented the\nservicer from gaining access to or maintaining the property;\n (e) the property has been sold or transferred to a new owner;\n (f) the servicer or investor subject to the provisions of this section\nhas released the lien on the property; or\n (g) the mortgage note has been assigned, transferred or sold to\nanother servicer.\n 7. Reasonable and necessary actions to maintain the property include,\nbut are not limited to:\n (a) ensuring that the property remains secure pursuant to subdivisions\nfour, five and six of this section; and\n (b) maintaining property in a manner consistent with the standards set\nforth in sections 301, 302 (excluding 302.2, 302.6 and 302.8), 304.1,\n304.3, 304.7, 304.10, 304.12, 304.13, 304.15, 304.16, 307.1, and 308.1\nof the New York property maintenance code, to the extent that the\nmortgage servicer or its agents are able to obtain necessary or required\npermits or approvals.\n 8. (a) Violations of this section may be heard before a hearing\nofficer or a court of competent jurisdiction. If it shall appear to the\nsatisfaction of the hearing officer or the court, based on the\npreponderance of the evidence, that the mortgagee or agent of a\nmortgagee has violated this section, a civil penalty may be issued by\nthe hearing officer or the court in the amount of up to five hundred\ndollars per day per property for each day the violation persisted.\n (b) The superintendent of financial services may, as appropriate and\nin his or her sole discretion, pursue any suspected violation of this\nsection. Before taking such action, the superintendent shall give the\nlender, assignee or mortgage loan servicer at least seven days' notice\nof the violation.\n (c) In addition to the authority granted to the department of\nfinancial services, the municipality in which such residential real\nproperty is located, shall have the right to enforce the obligations\ndescribed in this section in any court of competent jurisdiction after\nat least seven days' notice to the lender, assignee or mortgage loan\nservicer, unless the property requires emergency repairs to address a\nthreat to public health, safety or welfare, in which case the\nmunicipality may enter and maintain the property to cure the emergency,\nprovided however, notice shall be provided to the lender, assignee or\nmortgage loan servicer as soon as practicable. Any municipality acting\npursuant to this subdivision shall have a cause of action in any court\nof competent jurisdiction against the lender, assignee or mortgage loan\nservicer to recover costs incurred as a result of maintaining the\nproperty. Such entity shall provide the department of financial services\nwith written notice at least ten days prior to bringing an action\npursuant to this subdivision; provided, however, that failure to comply\nwith this notice requirement shall not be a defense to the entity\nproceeding pursuant to this subdivision. The authority provided by this\nsubdivision shall be in addition to, and shall not be deemed to diminish\nor reduce, any rights of the parties described in this section under\nexisting law against the mortgagor of such property for failure to\nmaintain such property. Any civil penalty imposed pursuant to paragraph\n(a) of this subdivision in an action brought by a municipality pursuant\nto this paragraph shall be retained by such municipality.\n (d) The department of financial services is authorized and empowered\nto adopt such rules and regulations as may, in the judgment of the\nsuperintendent of financial services, be necessary for the effective\nimplementation, administration, operation and enforcement of this\nsection.\n 9. A servicer who peacefully enters a vacant and abandoned property in\norder to maintain pursuant to this section shall be immune from\nliability when such servicer is making reasonable efforts to comply with\nthe statute.\n 10. The provisions of this section are subject to federal laws, court\norders and investor and insurer guidelines.\n 11. For all state or federally chartered banks, savings banks, savings\nand loan associations, credit unions, or servicers for which the\nprovisions of this section do not apply, pursuant to the opening\nparagraph of this section, any agreement between such state or federally\nchartered banks, savings banks, savings and loan associations, credit\nunions, or servicers and the department of financial services that is\nassociated with the maintenance and repair of vacant and abandoned\nproperty shall remain in full force and effect between the\naforementioned parties for so long as the terms and conditions of such\nagreement remain in effect.\n 12. The department of financial services shall issue such rules and\nregulations necessary to implement the terms of this section, including\nbut not limited to rules and regulations pertaining to the reporting of\nfinancial information that state or federally chartered banks, savings\nbanks, savings and loan associations, or credit unions must provide to\nimplement this section.\n 13. No local law, ordinance, or resolution shall impose a duty to\nmaintain vacant and abandoned property as defined in section thirteen\nhundred nine of this article in a manner inconsistent with the\nprovisions of this section that are related to maintenance as provided\nunder subdivisions three, four, five, six and seven of this section, or\nestablish related penalties nor other monetary obligations, with respect\nto a state or federally chartered bank, savings bank, savings and loan\nassociation or credit union that originates, owns, services or maintains\na mortgage related to such property.\n No local law, ordinance, or resolution shall impose a duty to maintain\nvacant and abandoned property upon any state or federally chartered\nbank, savings bank, savings and loan association or credit union that\noriginates, owns, services or maintains a mortgage related to such\nproperty for which the provisions of this section, pursuant to the\nopening paragraph of this section, do not apply.\n