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A06656 Summary:

COSPNSRHyndman, Epstein, Wallace, Tapia, Rosenthal L, Thiele, McDonald, Gunther, Otis, Dinowitz, Cruz, Hunter, Kelles, Sayegh, Colton, Glick, Zebrowski, Reyes, Lee, Gibbs, Cunningham, Raga, Anderson, Simon, Cook
Add 756-a, amd 1501, RPAP L; amd 265-a, 265-b & 266, RP L; amd 420.45, CP L; amd 6501, CPLR
Relates to the theft of real property; provides certain protections for victims of real property theft; authorizes a stay of foreclosure proceedings pending an investigation into theft or fraud.
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A06656 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Weinstein
  TITLE OF BILL: An act to amend the real property actions and proceedings law, the real property law, the criminal procedure law, and the civil practice law and rules, in relation to the theft of real property and protections for victims of real property theft   PURPOSE OF BILL: The purpose of this bill is to increase protections against real proper- ty theft by providing homeowners and prosecutors tools to assist in restoring title to the rightful homeowners, extending certain consumer protections to homeowners in distress, and preventing deed theft scam- mers from utilizing the courts and the law to their advantage in carry- ing out the fraud.   SUMMARY OF PROVISIONS OF BILL: Section one of this bill would require courts to stay eviction proceedings when a government agency is engaged in an investigation or criminal/civil litigation concerning title to a property, or where a party in housing court has a dispute about title. Section two of this bill would provide that in related civil actions that follow a criminal conviction for deed theft or a fraudulent trans- action involving real property, the criminal conviction would create a rebuttable presumption in the civil action that the deed transfer was fraudulent, shifting the burden of proof from the original homeowner to the convicted party to prove that they have legitimate title to the property. Section three of this bill would amend the Real Property Law to extend the protections of the Home Equity Theft Prevention Act (HETPA) to home- owners with utility liens. Section four of this bill would modify the definition of "distressed home loan" contained in § 265-b of the Real Property Law, related to distressed property consulting contracts, so that it covers a home loan for which an installment payment is more than sixty days past due. Section five of this bill would establish a rebuttable presumption that a buyer is not a good faith purchaser if the original owner's mortgage is unpaid following the conveyance of the property and the buyer does not formally assume the putative seller's loan. Sections six and seven of this bill would amend the Civil Practice Law and Rules (CPLR) to: *include additional crimes that, if proven, would allow the Attorney General or a District Attorney to petition a court to void title. *authorize the Attorney General or a District Attorney to file a lis pendens upon a property when there is probable cause that a deed theft crime has occurred or upon the filing of a criminal complaint or indict- ment for a real estate-related crime related to that property. Section eight of this bill provides the effective date.   JUSTIFICATION: Real property theft, often referred to as deed theft, is a surprisingly frequent occurrence that is most common in gentrifying neighborhoods. Deed theft perpetrators often target minority homeowners in gentrifying neighborhoods because their property values have increased significant- ly, and tend to single out those who are likely to be vulnerable to fraudulent schemes - preying on seniors and those facing financial hard- ship. Real property thieves target these individuals using a variety of schemes to deprive them of their most valuable asset, including the use of fraudulent signatures or making false promises of quick money to deceive homeowners into signing away their ownership. The current legal landscape makes it too easy for scammers to victimize homeowners and too difficult for homeowners and prosecutors alike to achieve justice after a real property theft has been perpetrated. Victimized homeowners must navigate a series of complex legal steps, often with limited financial resources, to keep or restore possession of their homes, sometimes even facing eviction from their own homes after being victimized In many cases, prosecutors do not learn of the crime until many years after it occurred, creating significant challenges to conduct an investigation before the termination of the statute of limi- tations. Making these circumstances worse, scammers are currently able to use tactics to quickly extract money from the property and prevent the homeowner from regaining title by using the equity of the property to secure bank loans, demanding rent from any existing tenants, and eventually selling the property to an unsuspecting buyer,.creating a legal impediment to the homeowner reacquiring the property. The legislative proposals included in this bill aim to address many of the shortcomings in the law that allow deed theft to occur and prevent these cases from being resolved in a just manner. These solutions are founded on the collective experiences of the Office of the Attorney General and members of its Deed Theft Task Force, along with testimony delivered by impacted parties and their legal representatives at various legislative hearings. The Deed Theft Task Force, chaired by the OAG, is comprised of District Attorneys' Offices within and outside of New York City, the New York City Sheriff's Office, the New York City Department of Finance, The Legal Aid Society and other law enforcement and civil enforcement agencies.   LEGISLATIVE HISTORY: New bill, 2023.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Undetermined.   EFFECTIVE DATE: This bill would take effect 30 days following enactment.
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