NY State Senate Bill 2023-S8399

Current Bill Status - In Senate Committee Judiciary Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 26, 2024	referred to judiciary

2023-S8399 (ACTIVE) - Details

See Assembly Version of this Bill:: A9536
Current Committee:: Senate Judiciary
Law Section:: Real Property Law
Laws Affected:: Amd §291, RP L

2023-S8399 (ACTIVE) - Summary

Prohibits the recording of conveyances suspected of being fraudulent; requires the clerk or registrar to conduct an investigation into transactions suspected of being fraudulent and to report such investigations to the local law enforcement or sheriff's office.

2023-S8399 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S8399

SPONSOR: BRISPORT
 
TITLE OF BILL:

An act to amend the real property law, in relation to prohibiting the
recording of conveyances suspected to be fraudulent

 
SUMMARY OF PROVISIONS:

Section one amends Section 291 of the real property law, to provide that
a county registrar shall not record a conveyance if the county registrar
has reason to believe that the conveyance is false or fraudulent in any
manner.

Section two sets forth the effective date.

 
JUSTIFICATION:

"Deed theft" is the tactic of using fraudulent or misleading tactics to
take the title, or deed, to another person's home without the homeown-
er's knowledge or approval. As real estate capital has flooded into

rapidly gentrifying neighborhoods of New York, this tactic has been
increasingly used to separate elderly homeowners and homeowners of
color---especially Black and Brown homeowners---from their homes.  In
furtherance of these schemes, our county clerks can act as an important
check against these fraudulent attempts. However, under current law,
they are legally constrained when it comes to conducting even a reason-
able investigation of a suspicious transfer. This legislation seeks to
correct this problem under current law, and enlist the assistance of
county clerks in combatting deed theft.

On October 27, 2022, the New York State Senate held a public hearing to
examine the practice of deed theft in New York State, to hear from New
Yorkers who have been victims of deed theft, to examine the failures and
loopholes in New York's existing laws, and to come up with solutions to
these ongoing problems. At that hearing, Yolande Nicholson---a co-found-
er of the New York State Foreclosure Defense Bar---explained the context
surrounding deed forgery, as follows:

Let's call a spade a spade; it's ongoing in Black communities in Brook-
lyn. What is going on is not merely stealing of title, but the illicit
transfer of the monetary value of the equity to private equity inves-
tors, masked limited liability companies and shell corporations, inves-
tors who are from outside of the community, with the aim of aggressively
evicting and displacing Black families, utilizing forged and fraudulent
deeds.

Ms. Nicholson urged the Legislature to "take away" the "welcome mat"
that fraudsters currently have under New York law, where fraudulent and
forged deeds are too easily accepted by local administrators.  Likewise,
Scott Kohanowski---the Director of the Homeowner Stability Project at
the City Bar Justice Center---testified at the same hearing that "the
city registrar or other local recording officer needs statutory authori-
ty to reject the recording" of fraudulent, forged, and suspicious docu-
ments. This legislation would implement this important and common-sense
recommendation.


As discussed at the public hearing, and as noted by practitioners, there
are several examples of suspicious conveyances that may warrant further
investigation in appropriate circumstances. For instance, transfers of a
residential property (containing four dwelling units or fewer, condomin-
ium unit, or cooperative apartment unit) by a natural person or an
estate to a limited liability company, corporation, or legal partner-
ship, may raise suspicion. This is particularly the case when the entity
taking title was created within the last six months, or the person(s)
transferring the residential property (and/or their decedent) previously
owned the property for many years, or the registered address of the
entity taking title is the same as the property itself, or only nominal
consideration is provided (or the consideration is otherwise much lower
than the apparent value of the property), or one of the beneficial
owners of the entity is the prior owner themselves, or if a lis pendens
and/or tax lien has been recorded against the property. Similarly, it
may raise suspicion when there is any non-conveyance of a real property
interest that does not by its terms expire within 120 days (e.g., a
"memoranda of sale," as discussed more fully at t he public hearing as
an example of an "executory contract" that appears to, but does not
actually, obligate the homeowner to some future sale of the home), or a
negative covenant purporting to restrict disposition and encumbrance of
the property.

This legislation provides that a county clerk or city registrar will 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. Instead, the local official shall conduct a reasonable investi-
gation, and alert law enforcement in proper circumstances.

 
PRIOR LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall 19 have
become a law.  election with intent to unduly influence the outcome of
an election

2023-S8399 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8399
 
                             I N  S E N A T E
 
                             January 26, 2024
                                ___________
 
 Introduced  by Sen. BRISPORT -- read twice and ordered printed, and when
   printed to be committed 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
 S. 8399                             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.

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Senate Bill S8399

Sponsored By

Current Bill Status - In Senate Committee Judiciary Committee

2023-S8399 (ACTIVE) - Details

2023-S8399 (ACTIVE) - Summary

2023-S8399 (ACTIVE) - Sponsor Memo

2023-S8399 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8399

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Sponsored By

Jabari Brisport

Current Bill Status - In Senate Committee Judiciary Committee

2023-S8399 (ACTIVE) - Details

2023-S8399 (ACTIVE) - Summary

2023-S8399 (ACTIVE) - Sponsor Memo

2023-S8399 (ACTIVE) - Bill Text download pdf

Comments