BILL NUMBER: S5357

SPONSOR: COMRIE
 
TITLE OF BILL:  An act to amend the real property actions and
proceedings law, in relation to the definition of "tenant" for purposes
of mortgage foreclosures

 
PURPOSE OF BILL:

To ensure that all tenants lawfully residing in a home under foreclosure
receive the notice protections intended for tenants residing in fore-
closed properties.

 
SUMMARY OF PROVISIONS OF BILL:

Section 1. Amends paragraph (c) of section 1305 of the Real Property and
Procedures Law by expanding the definition of tenants entitled to notice
of rights from those who were lawful tenants at the time the foreclosure
was commenced to those who are lawful tenants during the pendency of the
foreclosure action.

              

Section 2 provides for an effective date on the first of January follow-
ing the date on which the proposal becomes law with the terms of the act
to apply to actions commenced on or after such date.

 
JUSTIFICATION:

In 2009, via chapter 507, New York State enacted the New York State
Governor's proposal into law that included various provisions relating
to foreclosure. One of the provisions of that law added section 1305 of
the Real Property Act and Proceedings Law (RPAPL). This provision
provides that tenants residing in properties under foreclosure have the
right, as long as they continue to pay rent, to remain in the property
for the greater of 90 days after the foreclosure sale, or the remainder
of their lease, unless the buyer intends to occupy the property.

RPAPL 1305, however, defines a tenant as someone who was lawfully resid-
ing in the home under foreclosure at the time the foreclosure was
commenced. Therefore, lawfully residing tenants who enter into leases
with landlords after the commencement of a foreclosure action and during
the pendency of the foreclosure, who were not tenants at the time the
foreclosure was commenced, are not covered by the notice requirement of
RPAPL 1305. This was an oversight.

RPAPL section 1305 was intended to establish protections for tenants in
foreclosed homes. The written notice of rights under this section was
intended for all lawfully residing tenants during the pendency of the
foreclosure. Since foreclosure proceedings often take longer than a year
to complete, tenants who enter into leases while the foreclosure is
pending do not know of their rights, and find themselves without the
benefit of the notice provision intended for them under RPAPL 1305.

This measure would remedy this oversight to fulfill the intent of the
original law.

 
LEGISLATIVE HISTORY:

2017-2018: A2803

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
It would take effect on the first of January following the date on which
the proposal becomes law with the terms of the act to apply to actions
commenced on or after such date.