Effective this December 20, 2016, vacant and abandoned properties that are the subject of foreclosure actions will be covered under the new law. The law now obligates lenders to frequently inspect, secure and maintain the vacant and abandoned property even before the foreclosing lender obtains a judgment of foreclosure and sale. After the lender commences its foreclosure action and the homeowner's time to answer the complaint expires, the lender, upon proof and certification that the property is abandoned, will be permitted to move via order to show cause for an accelerated judgment of foreclosure and sale. This will clearly accelerate the foreclosure of abandoned properties which will likely lead to quicker rehabilitations. The order to show cause must state in bold letters that the property is vacant and abandoned and that it may be foreclosed on without any further proceedings if the motion is not opposed. The court is also required to send a separate notice advising the homeowner that the lender has filed for an expedited foreclosure action based on the property being abandoned and vacant. The owner of the property must respond to the motion or appear on the return date to challenge the lender's determination that the property is abandoned and vacant.
Additionally, the law requires the Department of Financial Services (DFS) to maintain a statewide electronic registry and the lender is required to furnish information to the DFS within 21 days from when it learns that the property is abandoned and vacant. RPAPL Section 1309 requires that the Plaintiff prove by a preponderance of evidence that it conducted at least 3 inspections, each between 25 to 35 days apart and at different times of the day, and at each inspection, no occupancy was present. Evidence of this includes: overgrown vegetation, accumulation of newspapers and or flyers, past due utility notices, disconnected utilities, accumulation of trash, absence of window coverings, broken, boarded or missing windows, property that is open to entry or property that is unsound and poses a potential threat or danger. The new law carves out exceptions, such as when property is under construction, renovation, seasonal use, subject to a Surrogate Court proceeding or a quiet title action, occupied by someone who has a legal right to occupy, etc. In addition to the typical mortgage foreclosure action, the new law will cover tax lien foreclosures too. Failure of lenders to comply may result in fines that can be as much as $500.00 per day. The law allows all municipalities to enforce the law and collect the fines.
If an owner of vacant property is served with any notice declaring the property to be abandoned and vacant, the owner must determine if the property is worth saving and if so, such owner must take immediate action to avoid the plaintiff from obtaining the judgment of foreclosure and sale. My firm will provide a free phone consultation in such matters, but it is vital that the owner not waste anytime otherwise the property may be lost at a foreclosure sale.
Additionally, the law requires the Department of Financial Services (DFS) to maintain a statewide electronic registry and the lender is required to furnish information to the DFS within 21 days from when it learns that the property is abandoned and vacant. RPAPL Section 1309 requires that the Plaintiff prove by a preponderance of evidence that it conducted at least 3 inspections, each between 25 to 35 days apart and at different times of the day, and at each inspection, no occupancy was present. Evidence of this includes: overgrown vegetation, accumulation of newspapers and or flyers, past due utility notices, disconnected utilities, accumulation of trash, absence of window coverings, broken, boarded or missing windows, property that is open to entry or property that is unsound and poses a potential threat or danger. The new law carves out exceptions, such as when property is under construction, renovation, seasonal use, subject to a Surrogate Court proceeding or a quiet title action, occupied by someone who has a legal right to occupy, etc. In addition to the typical mortgage foreclosure action, the new law will cover tax lien foreclosures too. Failure of lenders to comply may result in fines that can be as much as $500.00 per day. The law allows all municipalities to enforce the law and collect the fines.
If an owner of vacant property is served with any notice declaring the property to be abandoned and vacant, the owner must determine if the property is worth saving and if so, such owner must take immediate action to avoid the plaintiff from obtaining the judgment of foreclosure and sale. My firm will provide a free phone consultation in such matters, but it is vital that the owner not waste anytime otherwise the property may be lost at a foreclosure sale.
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