| 1 | 1 | | <STYLE><!--U {color: Green}S {color: RED} I {color: DARKBLUE; background-color:yellow} P.brk {page-break-before:always}--></STYLE> <BASEFONT SIZE=3> <PRE WIDTH="99"> <FONT SIZE=5><B> STATE OF NEW YORK</B></FONT> ________________________________________________________________________ 5886--A 2025-2026 Regular Sessions <FONT SIZE=5><B> IN ASSEMBLY</B></FONT> February 24, 2025 ___________ Introduced by M. of A. CRUZ -- read once and referred to the Committee on Consumer Affairs and Protection -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee AN ACT to amend the general business law, in relation to prohibiting unfair residential real estate service agreements <B><U>The People of the State of New York, represented in Senate and Assem-</U></B> <B><U>bly, do enact as follows:</U></B> 1 Section 1. Short title. This act shall be known and may be cited as 2 the "prohibition of unfair real estate service agreements act". 3 § 2. Legislative intent. In an effort to protect consumers from fraud 4 and abuse by unscrupulous actors, this act prohibits the use of real 5 estate service agreements that are unfair to an owner of residential 6 real estate or to other persons who may become owners of that real 7 estate in the future, and further prohibits the recording of such resi- 8 dential real estate service agreements so that the public records will 9 not be clouded by them and provides remedies for owners who are incon- 10 venienced or damaged by the recording of such agreements. 11 § 3. The general business law is amended by adding a new article 36-E 12 to read as follows: 13 <B><U>ARTICLE 36-E</U></B> 14 <B><U>PROHIBITION OF UNFAIR REAL ESTATE SERVICE AGREEMENTS</U></B> 15 <B><U>Section 778-aaa. Definitions.</U></B> 16 <B><U>778-bbb. Prohibition against unfair service agreements; record-</U></B> 17 <B><U>ing thereof.</U></B> 18 <B><U>778-ccc. Deceptive acts and practices.</U></B> 19 <B><U>778-ddd. Enforcement; action by the attorney general.</U></B> 20 <B><U>778-eee. Severability.</U></B> 21 <B><U>§ 778-aaa. Definitions. As used in this article, the following terms,</U></B> 22 <B><U>unless the context requires otherwise, shall have the following mean-</U></B> 23 <B><U>ings:</U></B> EXPLANATION--Matter in <B><U>italics</U></B> (underscored) is new; matter in brackets [<B><S> </S></B>] is old law to be omitted. LBD05484-02-5 </PRE><P CLASS="brk"><PRE WIDTH="99"> A. 5886--A 2 1 <B><U>1. "Person" means a natural person, partnership, association, cooper-</U></B> 2 <B><U>ative, corporation, trust, or other legal entity.</U></B> 3 <B><U>2. "Real estate service agreement" means a written contract under</U></B> 4 <B><U>which a person agrees to provide services in connection with the mainte-</U></B> 5 <B><U>nance of or purchase or sale of residential real estate.</U></B> 6 <B><U>3. "Recording" means presenting a document to a recording officer,</U></B> 7 <B><U>whether the county clerk of the county or the register of the county,</U></B> 8 <B><U>consistent with the real property law.</U></B> 9 <B><U>4. "Residential real estate" means real property located in this state</U></B> 10 <B><U>which is used primarily for personal, family, or household purposes and</U></B> 11 <B><U>is improved by one to four dwelling units, including condominium units.</U></B> 12 <B><U>5. "Service provider" means an individual or entity that provides</U></B> 13 <B><U>services to a person.</U></B> 14 <B><U>6. (a) "Unfair real estate service agreement" means any real estate</U></B> 15 <B><U>service agreement that is not to be performed within two years after the</U></B> 16 <B><U>time it is entered into and either:</U></B> 17 <B><U>(i) purports to run with the land or to be binding on future owners of</U></B> 18 <B><U>interests in the real property; or</U></B> 19 <B><U>(ii) allows for assignment of the right to provide service without</U></B> 20 <B><U>notice to and consent of the owner of residential real estate; or</U></B> 21 <B><U>(iii) purports to create a lien, encumbrance, or other real property</U></B> 22 <B><U>security interest, other than a mechanics lien properly issued pursuant</U></B> 23 <B><U>to the provisions of the lien law.</U></B> 24 <B><U>(b) Notwithstanding the foregoing, an agreement shall not be consid-</U></B> 25 <B><U>ered an unfair real estate service agreement if it is a valid:</U></B> 26 <B><U>(i) home warranty or similar product that covers the cost of mainte-</U></B> 27 <B><U>nance of a major home system for a fixed period;</U></B> 28 <B><U>(ii) insurance contract;</U></B> 29 <B><U>(iii) option or right of refusal to purchase the residential real</U></B> 30 <B><U>estate;</U></B> 31 <B><U>(iv) declaration created in the formation of a common interest commu-</U></B> 32 <B><U>nity or an amendment thereto;</U></B> 33 <B><U>(v) maintenance or repair agreement entered by a homeowners' associ-</U></B> 34 <B><U>ation in a common interest community;</U></B> 35 <B><U>(vi) mortgage loan or a commitment to make or receive a mortgage loan;</U></B> 36 <B><U>(vii) security agreement under the uniform commercial code relating to</U></B> 37 <B><U>the sale or rental of personal property or fixtures; or</U></B> 38 <B><U>(viii) contract with a water, sewer, electrical, telephone, cable, or</U></B> 39 <B><U>other regulated utility service provider.</U></B> 40 <B><U>§ 778-bbb. Prohibition against unfair service agreements; recording</U></B> 41 <B><U>thereof. 1. No unfair real estate service agreement shall be enforceable</U></B> 42 <B><U>in the state.</U></B> 43 <B><U>2.(a) No person shall record or cause to be recorded an unfair real</U></B> 44 <B><U>estate service agreement or notice or memorandum thereof.</U></B> 45 <B><U>(b) If an unfair real estate service agreement is recorded in this</U></B> 46 <B><U>state, it shall not provide actual or constructive notice against an</U></B> 47 <B><U>otherwise bona fide purchaser or creditor.</U></B> 48 <B><U>(c) If an unfair service agreement or a notice or memorandum thereof</U></B> 49 <B><U>is recorded, any person with an interest in the real property that is</U></B> 50 <B><U>the subject of that agreement may apply to a court in the county where</U></B> 51 <B><U>the recording exists to record a court order declaring the agreement</U></B> 52 <B><U>unenforceable.</U></B> 53 <B><U>§ 778-ccc. Deceptive acts and practices. Any person in this state who</U></B> 54 <B><U>enters into or causes a consumer to enter into an unfair real estate</U></B> 55 <B><U>service agreement shall be considered to have violated section three</U></B> 56 <B><U>hundred forty-nine of this chapter.</U></B> </PRE><P CLASS="brk"><PRE WIDTH="99"> A. 5886--A 3 1 <B><U>§ 778-ddd. Enforcement; action by the attorney general. 1.(a) Whenever</U></B> 2 <B><U>the attorney general shall believe from evidence satisfactory to the</U></B> 3 <B><U>attorney general that any person or agent or employee thereof has</U></B> 4 <B><U>engaged in or is about to engage in any of the acts or practices stated</U></B> 5 <B><U>to be unlawful pursuant to this section, the attorney general may bring</U></B> 6 <B><U>an action in the name and on behalf of the people of the state of New</U></B> 7 <B><U>York to enjoin such unlawful acts or practices and to obtain restitution</U></B> 8 <B><U>of any moneys or property obtained directly or indirectly by any such</U></B> 9 <B><U>unlawful acts or practices. In such action preliminary relief may be</U></B> 10 <B><U>granted under article sixty-three of the civil practice law and rules.</U></B> 11 <B><U>(b) The provisions of this article may be enforced concurrently by the</U></B> 12 <B><U>director of a municipal consumer affairs office, or by the town attor-</U></B> 13 <B><U>ney, city corporation counsel, or other lawful designee of a munici-</U></B> 14 <B><U>pality or local government, and all moneys collected thereunder shall be</U></B> 15 <B><U>retained by such municipality or local government.</U></B> 16 <B><U>2. In addition to the right of action granted to the attorney general</U></B> 17 <B><U>pursuant to this section, any person who has been injured by reason of</U></B> 18 <B><U>any violation of this section may bring an action in their own name to</U></B> 19 <B><U>enjoin such unlawful act or practice, an action to recover actual</U></B> 20 <B><U>damages or five hundred dollars, whichever is greater, or both such</U></B> 21 <B><U>actions. The court may, in its discretion, increase the award of damages</U></B> 22 <B><U>to an amount not to exceed three times the actual damages, if the court</U></B> 23 <B><U>finds the defendant willfully or knowingly violated this section. The</U></B> 24 <B><U>court may award reasonable attorneys' fees to a prevailing plaintiff.</U></B> 25 <B><U>§ 778-eee. Severability. If any provision of this article is, for any</U></B> 26 <B><U>reason, declared unconstitutional or invalid, in whole or in part, by</U></B> 27 <B><U>any court of competent jurisdiction, such portion shall be deemed sever-</U></B> 28 <B><U>able, and such unconstitutionality or invalidity shall not affect the</U></B> 29 <B><U>validity of the remaining portions of this article, which remaining</U></B> 30 <B><U>portions shall continue in full force and effect.</U></B> 31 § 4. This act shall take effect on the ninetieth day after it shall 32 have become a law. |
|---|