S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9536
 
                           I N  A S S E M B L Y
 
                              March 20, 2024
                                ___________
 
 Introduced  by  M.  of  A. L. ROSENTHAL -- read once and referred to the
   Committee on Judiciary
 
 AN ACT to amend the real property law, in relation  to  prohibiting  the
   recording of conveyances suspected to be fraudulent
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 291 of the real property law, as amended by chapter
 641 of the laws of 2019, is amended to read as follows:
   § 291. Recording of conveyances. 1. A  conveyance  of  real  property,
 within the state, on being duly acknowledged by the person executing the
 same,  or proved as required by this chapter, and such acknowledgment or
 proof duly certified when required by this chapter, may be  recorded  in
 the  office of the clerk of the county where such real property is situ-
 ated, and such county clerk or city registrar  where  applicable  shall,
 upon  the  request  of any party, on tender of the lawful fees therefor,
 record the same in said office.
   (A) A COUNTY CLERK OR CITY REGISTRAR SHALL NOT REGISTER ANY CONVEYANCE
 FOR REAL PROPERTY IF THE CLERK OR REGISTRAR HAS REASON TO  BELIEVE  THAT
 THE  CONVEYANCE  IS  FALSE  OR FRAUDULENT IN ANY MANNER.   IF THE COUNTY
 CLERK OR CITY REGISTRAR HAS  REASON  TO  BELIEVE  OR  SUSPECT  THAT  THE
 CONVEYANCE  IS  FRAUDULENT,  THE  OFFICE OF THE CLERK OR REGISTRAR SHALL
 CONDUCT REASONABLE INVESTIGATION INTO THE TRANSACTION.
   (B) IF AFTER REASONABLE INVESTIGATION THE TRANSACTION IS SUSPECTED  OR
 BELIEVED  TO BE FALSE OR FRAUDULENT, THE OFFICE OF THE CLERK OR THE CITY
 REGISTRAR SHALL REPORT THE INVESTIGATION TO LOCAL LAW  ENFORCEMENT,  OR,
 IF IN THE CITY OF NEW YORK, THE OFFICE OF THE SHERIFF.
   (C)  THE  OFFICE OF THE CLERK OR CITY REGISTRAR SHALL NOTIFY THE BUYER
 AND SELLER OF PROPERTY OF ANY INVESTIGATION AND PROVIDE THE  OPPORTUNITY
 FOR EACH PARTY TO PARTICIPATE IN THE INVESTIGATION.
   2. Every such conveyance not so recorded is void as against any person
 who  subsequently  purchases  or  acquires  by  exchange or contracts to
 purchase or acquire by exchange, the same real property or  any  portion
 thereof,  or  acquires  by  assignment  the  rent to accrue therefrom as
 provided in section two hundred ninety-four-a of this article,  in  good
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13947-01-4
 A. 9536                             2
 
 faith  and  for a valuable consideration, from the same vendor or assig-
 nor, his OR HER distributees or devisees, and whose conveyance, contract
 or assignment is first duly recorded, and is void as  against  the  lien
 upon the same real property or any portion thereof arising from payments
 made  upon  the execution of or pursuant to the terms of a contract with
 the same vendor, his OR HER distributees or devisees, if  such  contract
 is made in good faith and is first duly recorded.
   3.  Notwithstanding  the  foregoing,  any  increase  in  the principal
 balance of a mortgage lien by virtue of the addition thereto  of  unpaid
 interest  in  accordance with the terms of the mortgage shall retain the
 priority of the original mortgage lien as so increased provided that any
 such mortgage instrument sets forth its terms of repayment.
   4. The clerk of the county or city registrar where such conveyance  of
 residential  real  property  is  recorded  and maintained shall mail VIA
 CERTIFIED MAIL a written notice of  such  conveyance  to  the  owner  of
 record.  The notice shall have the heading printed in 20 point bold type
 and read as follows:
 "NOTICE OF SALE OR TRANSFER OF OWNERSHIP OF YOUR RESIDENTIAL PROPERTY.
 To:______________________________
       Name of owner of record
 
 Our records show that you are listed as the current owner of record  for
 residential property:
 
 Block #__________  Lot #________
 
 Located At: ___________________________
                   street address
 
 in the county of __________________ New York
 On ____________, documents were filed at this
       date
 office to change ownership and transfer title of your property.
 
 To: ______________________________
           name of new owner
 
 If  you  have any questions regarding the validity of the documents, and
 wish to dispute the recording of the transfer, you should  obtain  legal
 counsel.  If  you  believe  you  are a victim of a crime related to this
 recording, contact your local law enforcement agency or, if in the  City
 of New York, the office of the sheriff."
   The  party  seeking  to  record such conveyance shall bear the cost of
 such written notice. The clerk of the county or city registrar is  enti-
 tled  to charge a reasonable fee to cover the cost of mailing the envel-
 ope to the owner of record. Failure to mail such notice or  the  failure
 of  any  party to receive the same, shall not affect the validity of the
 conveyance of the property.
   § 2. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.