BILL NUMBER: S5706

SPONSOR: KENNEDY
 
TITLE OF BILL:

An act to amend the real property actions and proceedings law, in
relation to increasing the maximum civil penalty

 
PURPOSE:

To require banks and finance companies to actively rehabilitate and
maintain foreclosed properties which are a primary source of blight in
neighborhoods and reduce property values for homes within a 1/8 mile
radius of the foreclosed property.

 
SUMMARY OF PROVISIONS:

Section 1: Amends section 1308 of the real property and proceedings law
to increase the per day fines from $500 to $1000 for banks responsible
for foreclosed properties.

Section 2: Sets the effective date.
              

 
JUSTIFICATION:

Despite passing the Foreclosure Relief Act, some banks are still not
taking the initiative to maintain these properties or take the law seri-
ously.

Due to New York State's struggling financial situation a financial
crisis emerged causing citizens to fall behind on their mortgages and in
many instances leave or abandon their homes. The foreclosing institution
is statutorily deemed taking control of the property and responsible for
maintenance and upkeep. The unmaintained and blighted home impacts the
surrounding neighborhoods and there must be a priority in taking care of
and maintaining these properties. This law would obligate mortgage fore-
closure plaintiffs to act and financial institutions cannot delay in
taking action in providing upkeep on the vacant dwelling itself.

This will allow local governments to motivate banks or the banks will
face a larger fine for their inaction.

 
LEGISLATIVE HISTORY:

2017-18: S.5054 Referred to Housing, Construction and Community Develop-
ment

2019-20: S.2700

2021-22: S.5321/A.9846

 
FISCAL IMPLICATIONS:

Positive revenue from collecting increased fines.

 
EFFECTIVE DATE:
This act shall take effect immediately.