S T A T E O F N E W Y O R K ________________________________________________________________________ 523 2013-2014 Regular Sessions I N S E N A T E (PREFILED) January 9, 2013 ___________ Introduced by Sen. SAMPSON -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the real property actions and proceedings law, in relation to the failure of auction and requirements for sale of real estate owned property THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. The real property actions and proceedings law is amended by 2 adding a new section 1355-a to read as follows: 3 S 1355-A. FAILURE OF AUCTION: REQUIREMENTS FOR SALE OF REAL ESTATE 4 OWNED PROPERTY. 1. DEFINITIONS. (A) "REAL ESTATE OWNED PROPERTY" SHALL 5 MEAN A CLASS OF PROPERTY OWNED BY A LENDER, TYPICALLY A BANK OR MORTGAGE 6 COMPANY, AFTER AN UNSUCCESSFUL SALE AT A FORECLOSURE AUCTION; THIS CLASS 7 OF PROPERTY IS CATEGORIZED AS AN ASSET. 8 (B) "REGISTERED REAL ESTATE OWNED PROPERTY LAWYER" SHALL MEAN ANY 9 ATTORNEY WHO HAS REGISTERED WITH THE SECRETARY OF STATE PURSUANT TO 10 SUBDIVISION TWO OF THIS SECTION TO CONDUCT A SALE OR OTHER TRANSACTION 11 OF REAL ESTATE OWNED PROPERTY; THIS SECTION SHALL NOT BE CONSTRUED TO 12 MEAN ANY ATTORNEY ON RETAINER BY THE BANK TO HANDLE REAL ESTATE TRANS- 13 ACTIONS OR ANYONE DEEMED IN-HOUSE COUNSEL. 14 (C) "REGISTERED REAL ESTATE OWNED PROPERTY AGENT OR BROKER" SHALL MEAN 15 ANY INDIVIDUAL INVOLVED IN REAL ESTATE BROKERAGE ACTIVITY AS DEFINED IN 16 SECTION FIVE HUNDRED NINETY-NINE-B OF THE BANKING LAW WHO HAS REGISTERED 17 WITH THE SECRETARY OF STATE PURSUANT TO SUBDIVISION TWO OF THIS SECTION 18 TO LIST FOR SALE ANY REAL ESTATE OWNED PROPERTY; THIS SECTION SHALL NOT 19 BE CONSTRUED TO MEAN ANY AGENT OR BROKER ON RETAINER BY A BANK TO HANDLE 20 REAL ESTATE SALES OR PURCHASES OR ANY AGENT OR BROKER EMPLOYED BY A BANK 21 OR MORTGAGE COMPANY'S SUBSIDIARY. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02184-01-3 S. 523 2 1 (D) "REGISTERED REAL ESTATE OWNED PROPERTY MAINTENANCE COMPANY" SHALL 2 MEAN ANY INDIVIDUAL OR COMPANY WHO HAS REGISTERED WITH THE SECRETARY OF 3 STATE PURSUANT TO SUBDIVISION TWO OF THIS SECTION TO MAINTAIN FORECLOSED 4 PROPERTIES PURSUANT TO SECTION THIRTEEN HUNDRED SEVEN OF THIS ARTICLE. 5 2. REGISTRATION. (A) THE SECRETARY OF STATE SHALL POST AND MAINTAIN 6 ON ITS WEBSITE OR OTHERWISE MAKE READILY AVAILABLE A LIST OF REGISTERED 7 REAL ESTATE OWNED PROPERTY LAWYERS, A LIST OF REGISTERED REAL ESTATE 8 OWNED PROPERTY AGENTS OR BROKERS AND A LIST OF REGISTERED REAL ESTATE 9 OWNED PROPERTY MAINTENANCE COMPANIES ALONG WITH COMPREHENSIVE CONTACT 10 INFORMATION, INCLUDING, BUT NOT LIMITED TO, FULL NAME, NAME OF ANY ASSO- 11 CIATED LAW FIRM, LEGAL PRACTICE OR PARENT COMPANY, ADDRESS, PHONE 12 NUMBER, AND ANY KNOWN AFFILIATION WITH ANY STATE-CHARTERED BANK. 13 (I) THE SECRETARY OF STATE SHALL CONSULT WITH THE HEAD OF THE DIVISION 14 OF MINORITY AND WOMEN'S BUSINESS DEVELOPMENT TO USE REASONABLE MEASURES 15 TO ENSURE THAT BUSINESSES CERTIFIED UNDER ARTICLE FIFTEEN-A OF THE EXEC- 16 UTIVE LAW, WHICH TRADITIONALLY HAVE BEEN WOMEN AND MINORITIES ARE 17 AFFORDED EQUAL OPPORTUNITY TO PARTICIPATE IN AND BE INCLUDED ON THE 18 LISTS ALLOWED UNDER THIS SECTION. 19 (II) THE SECRETARY OF STATE SHALL DENOTE ON THE LIST CREATED UNDER 20 THIS SECTION THAT AN ATTORNEY, BROKER OR MAINTENANCE COMPANY IS A MINOR- 21 ITY OR WOMEN-OWNED BUSINESS OR ENTERPRISE, AND SHALL ENSURE THAT, AT ALL 22 TIMES, FIVE TO TEN PERCENT OF THE LIST IS MADE UP OF MINORITY AND 23 WOMEN-OWNED BUSINESSES. 24 (B) ANY ATTORNEY, REAL ESTATE BROKER OR PROPERTY MAINTENANCE COMPANY 25 INTENDING TO BE PART OF THE LIST MAINTAINED PURSUANT TO THIS SECTION 26 SHALL MAKE APPLICATION TO THE SECRETARY OF STATE. 27 (C) SUCH APPLICATION SHALL BE IN A FORM AND MANNER PRESCRIBED BY THE 28 SECRETARY OF STATE AND SHALL CONTAIN SUCH INFORMATION AS, IN THE SECRE- 29 TARY OF STATE'S JUDGMENT, IS REASONABLE AND NECESSARY TO DETERMINE THE 30 QUALIFICATIONS FOR LICENSING OF THE APPLICANT, EXCEPT THAT THE SECRETARY 31 OF STATE SHALL AUTOMATICALLY DISQUALIFY ANY INDIVIDUAL OR COMPANY AFFIL- 32 IATED WITH OR RETAINED BY ANY STATE-CHARTERED BANK. 33 (D) THE APPLICATION SHALL BE SUBSCRIBED BY THE APPLICANT AND AFFIRMED 34 UNDER PENALTY OF PERJURY. 35 (E) THERE SHALL BE NO APPLICATION FEE ASSOCIATED WITH THE APPLICATION 36 DESCRIBED IN THIS ARTICLE. 37 (F) EACH APPLICATION SHALL BE ACCOMPANIED BY SATISFACTORY EVIDENCE OF 38 GOOD STANDING AND LEGITIMATE LICENSING WITH THE NEW YORK STATE BAR, OR 39 BY THE SECRETARY OF STATE OR DEPARTMENT OF STATE. 40 (G) ANY APPLICANT FOR INCLUSION ON THIS LIST MAY SUBMIT SATISFACTORY 41 EVIDENCE OF LICENSURE TO PRACTICE AN EQUIVALENT OCCUPATION ISSUED BY ANY 42 OTHER STATE, TERRITORY, PROTECTORATE OR DEPENDENCY OF THE UNITED STATES 43 OR ANY OTHER COUNTRY IN LIEU OF THE EVIDENCE REQUIRED BY THIS SUBDIVI- 44 SION, PROVIDED THAT SUCH LICENSE WAS GRANTED IN COMPLIANCE WITH STAND- 45 ARDS WHICH WERE, IN THE JUDGMENT OF THE SECRETARY OF STATE, NOT LOWER 46 THAN THOSE OF THIS STATE AND PROVIDED THAT SUCH STATE, TERRITORY, 47 PROTECTORATE, DEPENDENCY, OR COUNTRY EXTENDS SIMILAR RECIPROCITY TO THE 48 LICENSEES OF THIS STATE OR THE APPLICANT PRACTICED AN EQUIVALENT OCCUPA- 49 TION IN SUCH STATE, TERRITORY, PROTECTORATE, DEPENDENCY OR COUNTRY FOR A 50 MINIMUM OF FIVE YEARS. 51 (H) IN ADDITION TO THE POWERS AND DUTIES ELSEWHERE PRESCRIBED IN NEW 52 YORK STATE LAW, THE SECRETARY OF STATE SHALL HAVE THE POWER TO: 53 (I) APPOINT A SUFFICIENT NUMBER OF ASSISTANTS, INSPECTORS AND OTHER 54 EMPLOYEES AS MAY BE NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTI- 55 CLE, TO PRESCRIBE THEIR DUTIES, AND TO FIX THEIR COMPENSATION WITHIN THE 56 AMOUNT APPROPRIATED THEREFOR; S. 523 3 1 (II) EXAMINE THE QUALIFICATIONS AND FITNESS OF APPLICANTS FOR REGIS- 2 TRATION; 3 (III) KEEP RECORDS OF ALL APPLICANTS APPROVED OR DENIED REGISTRATION; 4 AND 5 (IV) ADOPT SUCH RULES AND REGULATIONS NOT INCONSISTENT WITH THE 6 PROVISIONS OF THIS SECTION, AS MAY BE NECESSARY WITH RESPECT TO THE FORM 7 AND CONTENT OF APPLICATIONS FOR REGISTRATION, THE RECEPTION THEREOF, THE 8 INVESTIGATION AND EXAMINATION OF APPLICANTS AND PROSPECTIVE APPLICANTS 9 AS NEEDED, AND OTHER MATTERS INCIDENTAL OR APPROPRIATE TO THE POWERS AND 10 DUTIES OF THE SECRETARY OF STATE AS PRESCRIBED BY THIS SECTION AND FOR 11 THE PROPER ADMINISTRATION AND ENFORCEMENT OF THE PROVISIONS OF THIS 12 SECTION. 13 3. REQUIREMENTS OF SALE. (A) ANY STATE-CHARTERED BANK UNDER THE SUPER- 14 VISION OF THE DEPARTMENT OF FINANCIAL SERVICES MAY NOT CONSULT WITH, 15 CONTRACT WITH, OR AFFILIATE ITSELF WITH ANY ATTORNEY, AGENT, BROKER OR 16 MAINTENANCE COMPANY IN A TRANSACTION INVOLVING A REAL ESTATE OWNED PROP- 17 ERTY UNLESS SUCH INDIVIDUAL OR BUSINESS IS ON THE LIST PRESCRIBED BY 18 PARAGRAPH (A) OF SUBDIVISION TWO OF THIS SECTION. 19 (B) STATE-CHARTERED BANKS UNDER THE SUPERVISION OF THE DEPARTMENT OF 20 FINANCIAL SERVICES MUST SELECT AN ATTORNEY, AGENT, BROKER OR MAINTENANCE 21 COMPANY DENOTED AS A MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISE AND 22 INCLUDED ON THE LIST PRESCRIBED BY PARAGRAPH (A) OF SUBDIVISION TWO OF 23 THIS SECTION WHENEVER FEASIBLE IN TRANSACTIONS INVOLVING A REAL ESTATE 24 OWNED PROPERTY. 25 4. PENALTIES. (A) EACH VIOLATION OF THIS ARTICLE BY ANY STATE-CHAR- 26 TERED BANK UNDER THE SUPERVISION OF THE DEPARTMENT OF FINANCIAL SERVICES 27 SHALL BE A VIOLATION SUBJECT TO A FINE OF NOT MORE THAN FIVE HUNDRED 28 DOLLARS, UNLESS SUCH VIOLATION SHALL BE KNOWING AND WILLFUL, IN WHICH 29 EVENT THE FINE IMPOSED SHALL BE ONE THOUSAND DOLLARS. 30 (B) IF A STATE-CHARTERED BANK UNDER THE SUPERVISION OF THE DEPARTMENT 31 OF FINANCIAL SERVICES HAS THREE OR MORE PREVIOUS CONVICTIONS IN A FIVE- 32 YEAR PERIOD FOR VIOLATIONS OF THIS SECTION, SUCH CURRENT VIOLATION SHALL 33 BE SUBJECT TO A FINE OF NOT LESS THAN ONE THOUSAND FIVE HUNDRED DOLLARS. 34 S 2. This act shall take effect on the ninetieth day after it shall 35 have become a law.