BILL NUMBER: S6361B
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the general business law, in relation to prohibiting
unfair residential real estate service agreements
 
PURPOSE:
To protect homeowners from deceptive or unfair real estate service
agreements that create unnecessary liens, encumbrances, or binding obli-
gations on residential real property.
 
SUMMARY OF PROVISIONS:
*Section 1: Provides the short title of the bill as the "Prohibition of
Unfair Real Estate Service Agreements Act."
*Section 2: States legislative intent to prohibit the use and recording
of unfair residential real estate service agreements to prevent fraud
and consumer harm.
*Section 3: Adds a new Article 36-E to the General Business Law:
*Defines terms such as "unfair real estate service agreements," "record-
ing," and "residential real estate."
*Prohibits agreements that bind future property owners, allow assignment
without owner consent, or create invalid liens or encumbrances.
*Declares that unfair agreements cannot be enforced or recorded, and
allows affected parties to seek court orders declaring such agreements
void.
*Designates such agreements as deceptive acts under § 349 of the General
Business Law.
*Grants enforcement authority to the attorney general and municipal
officials, and provides private right of action for injured parties.
*Section 4: Includes a severability clause to ensure remaining
provisions remain valid if parts of the act are deemed invalid.
 
JUSTIFICATION:
Homeowners are increasingly targeted by predatory service providers who
use deceptive agreements to impose burdensome and hidden obligations on
residential properties. These agreements often purport to run with the
land, unfairly binding future owners; create invalid liens or encum-
brances that cloud property titles; and allow assignment without home-
owner consent, further complicating resolution.
This legislation protects consumers by prohibiting these practices and
ensuring that any improperly recorded agreements are deemed unenforcea-
ble. it also provides legal remedies for affected parties and enforce-
ment mechanisms to deter such predatory actions.
 
LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS:
Minimal administrative costs anticipated for implementation and enforce-
ment.
 
EFFECTIVE DATE:
This act shall take effect on the 90th day after it becomes law.