Requires a mortgagor to provide notice of imminent foreclosure
Summary
This bill would add a new section to the Real Property Law requiring a mortgagor who has received a foreclosure summons and complaint to notify tenants or prospective tenants before they renew or sign a lease. The bill defines this situation as “imminent foreclosure” and requires disclosure of that status before a lease is renewed or executed.
In addition to the disclosure requirement, the mortgagor must send the original summons and complaint by certified mail to the tenant or prospective tenant at least two weeks before the lease is renewed or signed. If the mortgagor fails to provide the required notice, the tenant or prospective tenant would receive a $500 credit against the rent under the lease, in addition to any other available equitable or statutory remedy. The bill would take effect immediately upon enactment.
Impact
The bill would create a new tenant-notice obligation in New York real property law and add a specific penalty for noncompliance. It would affect landlords or property owners facing foreclosure, as well as current and prospective residential tenants who may otherwise enter into leases without knowing the property is in foreclosure proceedings. The measure also interacts with existing foreclosure procedure under the Real Property Actions and Proceedings Law by tying the notice trigger to service of the foreclosure summons and complaint.
Sentiment
Based on the bill text and its procedural posture, the measure appears aimed at consumer protection and tenant transparency, with no recorded committee debate or votes available in the provided materials. The overall sentiment is therefore best characterized as protective of tenants and intended to prevent tenants from unknowingly entering leases on properties in foreclosure. Because there is no transcript or voting history, there is no evidence here of formal support or opposition beyond the bill’s stated purpose.
Contention
The main point of potential contention is the burden placed on mortgagors, who would have to disclose foreclosure status and mail court papers to tenants or prospective tenants before lease execution or renewal. Property owners may view the $500 rent credit and additional remedies as a significant penalty, especially where foreclosure proceedings are already underway. On the other hand, tenant advocates would likely support the bill as a way to ensure informed leasing decisions and avoid disruption or loss of housing caused by foreclosure.
Same As
Requires a mortgagor to provide notice of imminent foreclosure to their tenant or prospective tenant prior to renewing or signing a lease agreement.
An act to amend Sections 2924d, 2924h, and 2924m of the Civil Code, and to amend Sections 50612 and 50720.2 of the Health and Safety Code, relating to mortgages.