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Guidance to Mortgagees and Servicers Regarding Property Maintenance Obligations for Vacant and Abandoned Residential Real Properties in New York

Effective December 20, 2016, Sections 1308 and 1310 of the New York Real Property Action and Proceedings Law (RPAPL), obligates mortgagees and servicers to assume certain responsibilities in connection with vacant and abandoned residential properties securing mortgage loans in their portfolios.  Among these responsibilities are the duty to inspect properties securing delinquent loans and to register properties that meet the statutory definition of vacant and abandoned with the Department of Financial Services (Department).  Although the law has been in effect for a year now, the Department continues to encounter a significant number of errors in the reporting of vacant and abandoned properties to the Department. 

Mortgagees and servicers are reminded that RPAPL Sections 1308 and 1310 only apply to 1-4 family properties that are subject to a mortgage.  Vacant lots, commercial properties, REO properties or properties that are not otherwise subject to a mortgage are not covered by the vacant property law and are not to be listed on the registry maintained by the Department.  These properties may, however, be subject to local laws governing vacant and abandoned properties. 

It has also come to the Department’s attention that vacant property registrations are not being updated in a timely manner.  Mortgagees and servicers are reminded that RPAPL Section 1310(3) requires that the registry be updated within thirty days of any material change to the status of a registered property.  A material status change includes the occurrence of any event that would remove the property from the requirements of RPAPL Sections 1310 – such as the completion of the foreclosure process, the demolition of the house, the property becoming REO, or a lien release – and a transfer in the servicing rights.  Upon the occurrence of any such material event, mortgagees and servicers must update the registry listing for the relevant property within the timeframe allowed under RPAPL 1310.  The registry enables transferee servicers to take over for an existing filing once the transferor has marked the file as inactive. 

Mortgagees and servicers are also reminded of the responsibility to register vacant and abandoned properties and submit quarterly reporting of compliance efforts after registering a vacant and abandoned home or lot with the Department.

Updated information is crucial to the operation of the registry.  The Department and an increasing number of other state and local officials are using the vacant property registry to identify vacant properties and to contact the servicer listed in the registry if any issue arises.  Too often the Department has found that properties listed in the registry are either no longer subject to the law or the servicing rights have transferred to another servicer. 


Updated 12/14/2017

Department of Financial Services


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