Somebody Is Already Looking at Your House
New York's Abandoned Property Neighborhood Relief Act took effect on 20 December 2016 and added sections 1308, 1309 and 1310 to the Real Property Actions and Proceedings Law.
Section 1308 imposes duties on the first lien mortgage holder over vacant and abandoned one to four family residential property. Within 90 days of the date the loan becomes delinquent, the mortgagee or its agent must complete an exterior inspection of the property to determine occupancy. So long as the loan remains delinquent, that inspection is repeated every 25 to 35 days, at different times of the day.
Why Does That Reach a Fire Owner?
The full position is on our page covering the inspection and the registry.
Then a Notice Goes on the Door
If at any time the mortgagee or its agent determines the property is vacant and abandoned, as defined in section 1309, then within seven business days of that determination it must post a notice on an easily accessible part of the property, reasonably visible to the borrower, property owner or occupant.
The notice provides contact information and requests that the homeowner contact the servicer. The mortgagee must then monitor the property for any change in occupancy and ensure the notice stays posted.
What Happens If Nobody Answers It?
And the Property Enters a State Registry
Section 1310 requires the Department of Financial Services to maintain a statewide vacant and abandoned property electronic registry, implemented through Part 422 of Title 3 of the official compilation of codes.
The reporting covers loans where the borrower has been delinquent for 90 or more days, and includes the address, the date of each occupancy inspection, the date of the vacant and abandoned determination, the date the notice was posted, every action taken to secure and maintain the property with dates and nature, and whether a foreclosure has been commenced and its status.
What a Fire-Damaged Buffalo Property Is Actually Worth
The Terms That Move the Number Here
Whether there is a mortgage and where it stands. The first question, ahead of the damage.
Whether anything has been posted on the house. And whether anyone responded to it.
Who the first lien holder actually is. The duties attach to them rather than to a servicer generally.
How long it has been empty. Vacant and abandoned is a determination, not an event.
How many winters it has taken. Buffalo does to an open building what few other markets do.
Anyone quoting without asking about the loan has priced a property they may not be able to buy on their timetable.
The Foreclosure Track Speeds Up Too
Section 1309 addresses the judicial foreclosure process by reducing the time properties remain vacant and abandoned, allowing a plaintiff to seek an expedited judgment of foreclosure and sale.
To get one the court must be shown the evidence relied upon in finding the property vacant and abandoned, evidence that the plaintiff owns and holds the mortgage and note or has been delegated authority to institute the action, and the sums due after a review of a detailed and itemised account of each fee, each cost and the calculation of interest accrued.
So Does Being Empty Accelerate a Foreclosure?
The Duties Have Teeth, Which Cuts Your Way
Where section 1308 is violated, a hearing officer or the court may impose a civil penalty of up to $500 per day per property for each day the violation persists, and the Superintendent of Financial Services may pursue any suspected violation.
The municipality in which the property is located also has the right to enforce these obligations in any court of competent jurisdiction, after at least seven days' notice to the lender, assignee or mortgage loan servicer.
That means a servicer who is ignoring a deteriorating property is exposed, and it is worth knowing when you are dealing with one.
How the Timeline Runs
An open claim does not prevent a sale. What removes a Buffalo owner's options is a notice on a door nobody visited and ninety days that passed while an insurer was deciding.
If you are weighing several offers, how to tell local cash buyers apart covers the checks that separate them.
Questions Owners Ask
I Moved out. Is That Abandonment?
The test is vacant and abandoned as defined in section 1309, and moving out after a fire while dealing with the property is not the same thing. Responding to any posted notice is how you demonstrate the difference.
My Loan Is Current. Does This Apply?
The duties run from delinquency, so a current loan keeps you outside it. It is worth confirming rather than assuming if payments were made from an account you have stopped watching.
Can I Sell With an Open Claim?
Yes. Who keeps the insurance proceeds is a contract term rather than a legal barrier.
Who Do I Even Call?
Whoever holds the first lien, and the contact details are on the posted notice if there is one. Your last mortgage statement is the other place to look.
Sources
- New York Real Property Actions and Proceedings Law sections 1307, 1308, 1309 and 1310
- Abandoned Property Neighborhood Relief Act, effective 20 December 2016
- Section 1308(8) — civil penalties and municipal enforcement
- 3 NYCRR Part 422 — Department of Financial Services implementing rules
- Section 1310 registry reporting requirements applying to mortgagee and servicer