NY State Senate Bill 2025-S2117

Senate Bill S2117

2025-2026 Legislative Session

Relates to prosecution by the department of financial services and municipalities of certain violations regarding residential real property

download bill text pdf

Current Bill Status - In Senate Committee Housing, Construction And Community Development 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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 15, 2025	referred to housing, construction and community development

2025-S2117 (ACTIVE) - Details

Current Committee:: Senate Housing, Construction And Community Development
Law Section:: Real Property Actions and Proceedings Law
Laws Affected:: Add §1360, RPAP L

2025-S2117 (ACTIVE) - Summary

Relates to prosecution by the department of financial services (DFS) and municipalities of certain violations regarding residential real property by mortgage lenders and similar entities; directs DFS to promulgate standards of review of whether to prosecute such violations; requires deference to municipalities where both the municipality and DFS are authorized to prosecute such a violation; directs payments of civil penalties issued pursuant to such violations to be paid to DFS if DFS is the prosecuting entity.

2025-S2117 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2117

SPONSOR: FAHY
 
TITLE OF BILL:

An act to amend the real property actions and proceedings law, in
relation to prosecution by the department of financial services and
municipalities of certain violations regarding residential real proper-
ties

 
PURPOSE:

Relates to prosecution by the Department of Financial Services and muni-
cipalities of certain violations regarding residential real property by
requiring the department to set standards of review when determining to
prosecute such violations and coordinate with municipalities when prose-
cuting such violations and allowing for the proceeds that the department
receives upon Successful prosecution of such violations to be redirected
from the general fund to the department to prosecute future violations.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1: The actual property actions and proceedings law is amended by
adding a new section 1360.

(1) Requires the superintendent of financial services to promulgate
standards of review for determinations by the Department of Financial
Services regarding the prosecution of certain residential real property
violations.

(2) Clarifies that the Department of Financial Services must not seek to
prosecute violations of certain real property violations under this act
unless the municipality receives confirmation that the municipality does
not intend to prosecute such violations.

(3) In instances where the Department of Financial Services prosecutes
violations of certain real property violations under this act and where
the court finds in favor of the Department, proceeds of any civil penal-
ty issued pursuant to such decision will be payable to the department
for the purposes of prosecuting future violations.

(4) Defines the term "residential real property" as it pertains to the
new section of law. Section 2: Sets the effective date.

 
JUSTIFICATION:

Zombie properties are mortgage-delinquent properties that have been
abandoned by the owner but languish for years in disrepair and neglect
until the mortgagee completes the foreclosure process.  Current law
authorizes the Department of Financial Services ("DFS" or the "Depart-
ment") and municipalities to prosecute violations of certain residential
real property violations, referred to as "zombie property cases." Howev-
er, due to financial constraints, ambiguity in the law, and other
reasons, DFS has not exercised its authority. In instances where the
Department prosecutes zombie properties and where the court finds in
favor of the Department, proceeds of any civil penalty issued pursuant
to such decision are awarded to the state's general fund, while the
Department of Financial Services has no budget to under-take these pros-
ecutions.  This has created an unfunded mandate for the Department,
which has not prosecuted zombie properties in recent years and left
enforcement of zombie property laws up to municipalities, many of which
do not have the resources to pursue these cases. This bill requires DFS
to set a standard of review when determining whether to prosecute such
violations and to coordinate with municipalities when prosecuting such
violations. It allows for the proceeds that the Department receives upon
successful prosecution of such violations to be redirected from the
general fund to the Department for the purposes of prosecuting future
violations. When the Department successfully prosecutes a zombie proper-
ty, this bill will ensure that the resultant funds are returned to the
department for further zombie property prosecution instead of the gener-
al fund where the funding is currently allocated. Depending on agency
feedback, a portion of these funds might also be allocated to munici-
palities in need of said funds.

 
LEGISLATIVE HISTORY:

A5938 (2023-24)

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect on the sixtieth day after it becames law.
Effective immediately, the addition, amendment, and/or repeal of any
rule or regulation necessary for the implementation of this act on its
effective date are authorized to be made and completed on or before such
effective date.

2025-S2117 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2117
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 15, 2025
                                ___________
 
 Introduced  by  Sen.  FAHY  --  read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT  to  amend  the  real  property  actions and proceedings law, in
   relation to prosecution by the department of  financial  services  and
   municipalities  of certain violations regarding residential real prop-
   erties
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The real property actions and proceedings law is amended by
 adding a new section 1360 to read as follows:
   §   1360.   SUPERINTENDENT   OF  FINANCIAL  SERVICES;  PROSECUTION  OF
 VIOLATIONS.  1. THE SUPERINTENDENT OF FINANCIAL SERVICES  SHALL  PROMUL-
 GATE,  BY  REGULATION,  STANDARDS  OF  REVIEW  FOR DETERMINATIONS BY THE
 DEPARTMENT OF FINANCIAL SERVICES  OF  WHETHER  TO  PROSECUTE  VIOLATIONS
 REGARDING RESIDENTIAL REAL PROPERTY, AS AUTHORIZED UNDER THIS ARTICLE.
   2.  WHERE  THE DEPARTMENT OF FINANCIAL SERVICES AND A MUNICIPALITY ARE
 BOTH AUTHORIZED TO PROSECUTE  A  VIOLATION  REGARDING  RESIDENTIAL  REAL
 PROPERTY  UNDER THIS ARTICLE, THE DEPARTMENT OF FINANCIAL SERVICES SHALL
 NOT SEEK TO PROSECUTE SUCH VIOLATION  UNLESS  IT  RECEIVES  CONFIRMATION
 FROM  SUCH MUNICIPALITY THAT SUCH MUNICIPALITY DOES NOT INTEND TO PROSE-
 CUTE SUCH VIOLATION ITSELF.
   3. WHERE A HEARING OFFICER OR COURT OF COMPETENT JURISDICTION  DECIDES
 IN  FAVOR OF THE DEPARTMENT OF FINANCIAL SERVICES IN A PROCEEDING ALLEG-
 ING A VIOLATION REGARDING RESIDENTIAL REAL PROPERTY UNDER THIS  ARTICLE,
 THE PROCEEDS OF ANY CIVIL PENALTY ISSUED PURSUANT TO SUCH DECISION SHALL
 BE  PAYABLE  TO THE DEPARTMENT OF FINANCIAL SERVICES FOR THE PURPOSES OF
 PROSECUTING FUTURE VIOLATIONS UNDER THIS ARTICLE.
   4. FOR THE PURPOSES OF THIS SECTION, THE TERM "RESIDENTIAL REAL  PROP-
 ERTY"  SHALL  MEAN  REAL  PROPERTY LOCATED IN THIS STATE IMPROVED BY ANY
 BUILDING OR STRUCTURE THAT IS OR MAY BE USED, IN WHOLE OR  IN  PART,  AS
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05093-01-5

 S. 2117                             2
 
 THE  HOME  OR  RESIDENCE  OF  ONE OR MORE PERSONS, AND SHALL INCLUDE ANY
 BUILDING OR STRUCTURE USED FOR BOTH RESIDENTIAL AND COMMERCIAL PURPOSES.
   §  2.  This  act  shall take effect on the sixtieth day after it shall
 have become a law. Effective immediately, the addition, amendment and/or
 repeal of any rule or regulation necessary  for  the  implementation  of
 this  act  on its effective date are authorized to be made and completed
 on or before such effective date.

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