What is New York's zombie property law?
It's the law that makes the first-lien mortgage holder inspect, secure and maintain a vacant and abandoned one- to four-family home.
New York's Department of Financial Services (DFS) calls zombie properties homes the owner has left, usually while facing foreclosure, with no one there to keep them up.
A home counts as vacant and abandoned when at least three inspections in a row, 25 to 35 days apart, find no one living there, no sign anyone is, and the house not kept up to the state property maintenance code. Signs the law lists that no one lives in a house include overgrown or dead plants, piled-up mail or newspapers, shut-off or unused utilities, and piled-up trash.
The foreclosing lender can apply for an expedited judgment of foreclosure and sale on the ground that the home is vacant and abandoned.
Who has to maintain a zombie house in New York?
The first-lien mortgage holder and its loan servicer. The servicer must inspect the outside of the house within 90 days after the borrower falls behind, then every 25 to 35 days while the loan stays behind.
Within seven business days of deciding the house is vacant and abandoned, the servicer must post a notice on the house where it can easily be seen. If no one answers the posted notice within seven days, or a problem comes up that could damage the house, the servicer must take the steps the law lists to secure and protect it.
Securing the house includes fixing or boarding up broken doors and windows and securing dangers such as water someone could drown in, refrigerators or freezers, outbuildings, wells and septic tanks. Those steps also include fixing serious health and safety problems, including open code violations, and taking reasonable steps to stop harmful mold.
Once the servicer has found the house vacant and abandoned and secured it, it must keep taking reasonable and necessary steps to maintain it. That upkeep includes keeping the house to listed standards of the New York property maintenance code.
The upkeep duty ends at the first of several events, among them someone claiming the right to live there, threats of violence, a bankruptcy filing, a court order to stop, the house being sold or transferred, the lien being released, or the note going to another servicer.
A separate rule covers the foreclosure case itself: once a lender or servicer files to foreclose on a home that is vacant, or becomes vacant during the case, it must maintain the home until title passes at the foreclosure closing, or by another disposition, and the deed is recorded.
A court or hearing officer can fine a lender up to $500 per day per property for each day a violation goes on.
How do I report a zombie property in New York?
Report it to New York's Department of Financial Services (DFS), on its toll-free hotline or through its online complaint portal. The hotline number is 800-342-3736.
State law requires DFS to run a toll-free hotline that neighbors of a home that is, or looks, vacant and abandoned, and other people in the community, can use to report hazards, blight or other concerns about it.
It helps to tell DFS anything you know about who holds the mortgage or which company to contact, especially from a notice posted on the house. The posted notice must give the servicer's toll-free number or similar contact information.
DFS will try to find out whether the house has a mortgage and, if so, which company is responsible for inspecting, securing and maintaining it.
You can also tell me where it is. I'll find out who owns it and reach out about buying it and fixing it up.
Do vacant houses have to be registered in New York?
Vacant and abandoned homes with a mortgage do, and the mortgage company files: the lender, assignee or loan servicer must send DFS the information it requires within 21 business days of when it learns, or should have learned, that the home is vacant and abandoned. The registry information is confidential, though the DFS superintendent may release it when that is in the public's best interest.
On written request, DFS must give officials of a county, city, town or village access to the registry information for their own area.
Towns, cities and other local taxing governments may keep their own list of vacant and abandoned properties. A local list of vacant and abandoned properties must be open to the public.
Can a New York town fix up an abandoned house?
In an emergency, yes. If the house needs emergency repairs because it threatens public health, safety or welfare, the town can go in and maintain it to fix the emergency. The town can then sue the lender or servicer to get back what it spent keeping up the house.
The town or city where the house is can take the lender or servicer to court to enforce these duties, after giving at least seven days' notice. When a town brings the case itself, it keeps any civil penalty imposed.
Land banks are a tool New York communities can use to put vacant, abandoned and tax-delinquent properties back to use. A local government that forecloses for unpaid taxes can create a land bank by passing a local law, ordinance or resolution. A land bank can fix up, rebuild or tear down property.