S9796 • 2025

Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: Luis R. Sepúlveda
Last action: 2026-06-05
Official status: In Senate Committee
Effective date: Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership

Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership Prohibits pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership where over fifty percent of the units are shareholder occupied.

What This Bill Does

Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership Prohibits pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership where over fifty percent of the units are shareholder occupied.

Limits and Unknowns

This entry is temporarily using official source text because the generated explanation could not be confirmed against the official bill text during the last sync.

Bill History

2026-06-05 Senate
COMMITTED TO RULES
2026-05-21 Senate
ADVANCED TO THIRD READING
2026-05-20 Senate
2ND REPORT CAL.
2026-05-19 Senate
1ST REPORT CAL.1189
2026-04-06 Senate
REFERRED TO JUDICIARY

Official Summary Text

Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership
Prohibits pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership where over fifty percent of the units are shareholder occupied.

Current Bill Text

Read the full stored bill text

S T A T E   O F   N E W   Y O R K
        ________________________________________________________________________

                                          9796

                                    I N  S E N A T E

                                      April 6, 2026
                                       ___________

        Introduced by Sen. SEPULVEDA -- read twice and ordered printed, and when
          printed to be committed to the Committee on Judiciary

        AN  ACT to amend the general obligations law, in relation to pre-payment
          penalties for mortgages secured by real property owned  in  a  cooper-
          ative form of ownership

          THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
        BLY, DO ENACT AS FOLLOWS:

     1    Section 1. Paragraph b of subdivision 3 of section 5-501 of the gener-
     2  al obligations law, as amended by chapter 472 of the laws  of  2008,  is
     3  amended to read as follows:
     4    b.  notwithstanding  any other provision of law, the unpaid balance of
     5  the loan or forbearance may be prepaid, in whole  or  in  part,  at  any
     6  time.  If prepayment is made on or after one year from the date the loan
     7  or forbearance is made, no penalty may be imposed. If prepayment is made
     8  prior to such time, no penalty may be imposed unless provision  therefor
     9  is  expressly made in the loan contract, provided that no penalty may be
    10  imposed if prohibited by sections six-l and six-m of the banking law. NO
    11  PREPAYMENT PENALTY OR FEE SHALL BE CHARGED OR COLLECTED  ON  A  LOAN  OR
    12  FORBEARANCE  SECURED  BY  REAL  PROPERTY  OWNED IN A COOPERATIVE FORM OF
    13  OWNERSHIP WHERE OVER FIFTY PERCENT OF THE UNITS  ARE  SHAREHOLDER  OCCU-
    14  PIED.  SUCH PREPAYMENT PENALTY SHALL BE UNENFORCEABLE. In all cases, the
    15  right of prepayment shall be stated in  the  instrument  evidencing  the
    16  loan  or  forbearance,  provided,  however,  that the provisions of this
    17  subdivision shall not apply to the extent such provisions are inconsist-
    18  ent with any federal law or regulation.
    19    § 2. This act shall take effect immediately.



         EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00908-01-5