Thursday, March 25, 2010


From the CLE seminar held at the Nassau County Bar Association, courtesy of Empire Justice Center:

"Duty to Maintain Foreclosed Properties (adds RPAPL § 1307)

Duty and rights: Effective April 14, 2010, a plaintiff who obtains a judgment of foreclosure and sale involving residential real property that is vacant, or becomes vacant post-judgment, or is abandoned by the mortgagor but occupied by a tenant, 27 must maintain the property until ownership is transferred (either through the closing of title in foreclosure, or otherwise) and the deed is recorded. “Maintain” means keeping the property in compliance with specified provisions of Chapter 3 of Property Maintenance Code of New York State, 28 and if occupied by a tenant, in a safe and habitable condition.

The prevailing plaintiff in the foreclosure has the right under this section to peaceably enter the property for the purposes of inspections, repairs and maintenance, or as otherwise provided by court. If a tenant occupies the property, the plaintiff must give the tenant seven days notice unless emergency repairs are needed.

The requirements do not apply if the mortgagor is in bankruptcy, unless an order lifting or removing the automatic stay of the foreclosure sale has been issued, or if a receiver of such property is serving. This section also does not apply to municipal and governmental agencies if they hold a mortgage subordinate to one or more mortgages on the property.

Remedies: The law specifically gives the municipality in which the property is located, a tenant lawfully in possession, and a condominium board of managers or homeowners association (if such premise is subject to rules and regulations of an association), a right of action to enforce this duty in court, after seven days notice to the plaintiff. Damages can include costs incurred to maintain the property. Nothing in this section extinguishes or diminishes in any way existing obligations to maintain, or liabilities for failure to do so, of the mortgagor, or a receiver of rents and profits appointed in an action to foreclose a mortgage, to maintain the property. 29


27 See footnote 25 for definition of “tenant.” RPAPL § 1305.
28 Specifically, the law requires the property be maintained pursuant to NY property maintenance Code Chapter 3, 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. RPAPL § 1307(5).
29 Id. at § 1307(3)."

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