Relates to the rights of parties involved in actions commenced upon real property related instruments
This bill amends section 282 of the Real Property Law to expand the circumstances under which a borrower may recover attorneys’ fees, costs, disbursements, and expenses in disputes involving residential real property-related instruments. Under current law, the fee-shifting rule is tied more narrowly to mortgage foreclosure actions; this bill broadens it to cover actions or proceedings arising out of certain residential real property instruments described in CPLR 213(4), including cases brought by lenders and related counterclaims brought by borrowers.
The bill also rewrites key definitions. It defines “borrower” broadly to include borrowers, mortgagors, obligors, debtors, guarantors, and owners or transferees of the related residential property. It defines “lender” broadly to include lenders, mortgagees, note holders, creditors, assignees, and servicers. It also expands “residential real property” beyond one- to four-family homes, condominiums, and cooperatives to include any building or structure in New York used as a home or residence, including mixed-use properties. The bill further defines when a borrower is “prevailing,” including dismissal of a lender’s action or a borrower’s success on a counterclaim or mortgage-cancellation relief.
If enacted, the bill would change New York law by creating a broader implied reciprocal attorneys’ fee provision in residential real property disputes, not just traditional foreclosure cases. It would make waivers of this protection void as against public policy and would apply to a wider range of parties and property types, potentially increasing the availability of fee recovery for borrowers who successfully defend or challenge lender actions. The act would take effect 90 days after becoming law.
The available legislative context shows no recorded votes or committee transcript debate, so there is no documented floor or committee sentiment to assess. Based on the bill’s structure, it appears designed to strengthen borrower protections and equalize fee recovery rights in lender-borrower litigation, suggesting a consumer-protection orientation. Because it expands liability for attorneys’ fees and broadens the scope of covered disputes, likely points of contention would include whether the bill could increase litigation costs for lenders, affect servicing and enforcement practices, or encourage more borrower challenges in residential property disputes.
The bill would amend Real Property Law § 282 to extend reciprocal attorneys’ fee rights beyond mortgage foreclosure actions to a broader category of residential real property-related instruments covered by CPLR 213(4). It would also broaden the statutory definitions of borrower, lender, residential real property, and prevailing party, and would invalidate any waiver of the section as against public policy. This could affect lenders, servicers, note holders, borrowers, guarantors, owners, and transferees involved in residential property litigation.
No committee transcript or vote record is available, so there is no direct evidence of support or opposition from legislators in the provided materials. The bill’s text suggests a pro-borrower, consumer-protection purpose by expanding fee recovery rights and limiting waiver, which would likely be viewed favorably by tenant/homeowner advocates and more cautiously by lenders and servicing interests.
The main likely point of contention is the bill’s expansion of attorneys’ fee exposure for lenders and related parties in a wider range of residential property disputes. Supporters would likely emphasize fairness and reciprocity when borrowers prevail or when lenders bring actions tied to residential property instruments. Opponents may argue that the broader definitions of lender, borrower, and residential real property, along with the inclusion of mixed-use properties and assignees/servicers, could increase litigation risk and costs and create uncertainty in enforcement and servicing practices.