The Business Council opposes this legislation that adopts the so-called “New York State Abandoned Property Neighborhood Relief Act of 2016.”
Regardless of the bill's good intentions, it would impose uncertain and unworkable mandates on financial institutions. Some provisions of this proposal appear to duplicate or conflict with provisions of Chapter 507 of the Laws of 2009, resulting in compliance uncertainty for lenders.
Among other things, the bill would also require a lender engaged in a foreclosure action to maintain a vacant or abandoned property before it actually had ownership of the property. It is unreasonable to impose this requirement on the lender while the mortgagor is still in lawful possession of the property, and at a time when the lender may have no legal right to access the property in question.
Instead of imposing additional costs and complexity on mortgagees engaged in foreclosure on delinquent properties, the legislature should focus on streamlining the state's already complex and lengthy foreclosure process. Such an approach would be more effective in preventing the physical deterioration of delinquent property and the resultant adverse impact on neighborhoods. Importantly, on May 18 of 2015, the Department of Financial Services (DFS) announced agreements with the majority of companies and institutions in the New York mortgage market (with ongoing discussions with the remainder) to adopt a set of best practices to combat the same issues that this bill is meant to address. Under DFS’s agreement, banks and mortgage companies will conduct exterior inspections of property within 60 days of delinquency to determine vacancy and abandonment, and then every 30 days thereafter, securing each unit and then, on an ongoing basis, monitor the property’s condition to ensure it remains secure and that it is compliant with applicable laws and codes.
Getting buy-in from a regulated community is always the best guarantee of compliance. DFS’s agreement with the mortgage community and the adoption of best practices will lead to greater and swifter compliance, thus obviating the need for any further legislative action on the issue.
For these reasons, The Business Council opposes approval of S.4781-A(Klein) / A.6932-A (Weinstein).