New York State Assembly

 
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A05073 Summary:

A05073 Actions:

A05073 Committee Votes:

Committee:JUDICIARY   Chair:Lavine      
DATE:03/21/2023AYE/NAY:21/0  Action: Favorable         
Lavine
Aye
Tannousis
Aye
Zebrowski
Aye
Norris
Aye
Weprin
Aye
Walsh
Aye
Braunstein
Aye
Byrnes
Aye
Steck
Aye
Brown
Aye
Seawright
Aye
Flood
Aye
Joyner
Aye
Wallace
Aye
Walker
Aye
Cruz
Aye
McMahon
Aye
Mitaynes
Aye
Rajkumar
Aye
Simon
Aye
Sayegh
Aye

A05073 Floor Votes:

A05073 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A5073A
 
SPONSOR: Hunter

 
TITLE OF BILL:
 
An act to amend the real property law, in relation to prohibiting mort-
gagees from requiring mortgagors of certain real property to purchase
flood insurance exceeding certain limits
 
 
PURPOSE:
 
To expand the current real property law to include requirements to
produce notice between mortgagee and mortgagor on the minimal purchase
needed for compulsory flood insurance.
 
 
SUMMARY OF PROVISIONS:
 
  Section  1  of  the bill adds a new subsection (c-1) of section 283 of
the Real Property Law.

  Section two provides that this act shall take effect immediately after
enactment.
 
 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
 
Makes minor adjustments including specifying "improved residential prop-
erty" and clarifies some language around timing.
 
 
JUSTIFICATION:
 
This bill would limit a homeowner's requirements when purchasing compul-
sory flood insurance and provide notice of the minimum insurance liabil-
ity that is required. The homeowner is not required by law to buy  flood
insurance  that  exceeds  the  outstanding  amounts  owed to the bank or
covers content within the home. This transparency ensures homeowners are
not burdened by additional coverage by  insurance  companies  and  banks
when mandated to purchase flood insurance.
 
Additionally,  in  notifying  the  homeowner  of minimum flood insurance
requirements, the notice would include a statement informing  the  home-
owner  that  minimum flood insurance only covers the bank's interest and
may not cover the full value of the home or the belongings inside. Home-
owners are encouraged to purchase additional insurance  if  they  desire
greater coverage.
 
 
LEGISLATIVE HISTORY:
 
2019-20: A.4770-A.
 
2021-22: A.4424
 
2023: A5073
 
 
FISCAL IMPLICATIONS:
 
None.
 
 
EFFECTIVE DATE:
Effective immediately.

A05073 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         5073--A
                                                                Cal. No. 142
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      March 2, 2023
                                       ___________
 
        Introduced  by  M.  of  A.  HUNTER, STECK, WALLACE, BUTTENSCHON, HAWLEY,
          ZEBROWSKI, McDONALD -- read once and  referred  to  the  Committee  on
          Judiciary   --  ordered  to  a  third  reading,  amended  and  ordered
          reprinted, retaining its place on the order of third reading

        AN ACT to amend the real property law, in relation to prohibiting  mort-
          gagees  from requiring mortgagors of certain real property to purchase
          flood insurance exceeding certain limits
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  The  real property law is amended by adding a new section
     2  283 to read as follows:
     3    § 283. Limits on amount of flood insurance required by mortgagee.   No
     4  mortgagee  shall  require  a  mortgagor  to  whom  the  mortgagee makes,
     5  increases, extends, or renews any loan or  line  of  credit  secured  by
     6  improved  residential  real property to purchase or pay for flood insur-
     7  ance on such residential real property:  (1) at a coverage  amount  that
     8  exceeds  the  outstanding principal mortgage balance as of the beginning
     9  of the year for which the  policy  shall  be  in  effect;  or  (2)  that
    10  includes  coverage  for  contents.  In  each  instance where a mortgagee
    11  requires a mortgagor to purchase or pay  for  flood  insurance  on  such
    12  residential  real  property,  the  mortgagee shall provide notice to the
    13  mortgagor at the time the mortgagee is notified of the need to  purchase
    14  or  pay  for  flood  insurance  that  states  the following in clear and
    15  conspicuous print: 'Please note that the flood insurance we are  requir-
    16  ing you to purchase will only protect your creditor or lender's interest
    17  in  your  property.  The insurance may not be sufficient to pay for many
    18  needed repairs after a flood and may not compensate you for your  losses
    19  in  the  property  due to the flood. If you wish to protect your home or
    20  investment, you may wish to  purchase  more  flood  insurance  than  the
    21  amount we are requiring you to buy.'
    22    § 2. This act shall take effect immediately.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD07415-02-4

A05073 LFIN:

 
NO LFIN

A05073 Chamber Video/Transcript: