§ 1804-a. Deed in lieu of foreclosure. 1. The authority is hereby authorized to require at the time of the making of the loan or issuance of the loan guarantee, or at any time thereafter, in a form acceptable to it, a deed to all rights and interests in the real or personal property, as a security interest, such deed to be termed a "deed in lieu of foreclosure", and is empowered hereby to record such deed upon a default in the payment or terms of any loan made or guaranteed by the authority. By such recording title to and all rights of ownership in such property shall be thereby transferred to the authority notwithstanding the existence of any other deeds which are, or may be, recorded after the filing of a notice by the authority concerning the existence of such deed in lieu of foreclosure in accordance with subdivision six of this section and such later recorded deeds except for the deed in lieu of foreclosure shall be void and unenforceable.

Terms Used In N.Y. Public Authorities Law 1804-A

  • Authority: shall mean the New York job development authority created by subdivision one of section eighteen hundred two of this title. See N.Y. Public Authorities Law 1801
  • Deed: The legal instrument used to transfer title in real property from one person to another.
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Grantor: The person who establishes a trust and places property into it.
  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Loan: shall mean (i) a mortgage loan evidenced by a bond, note or other obligation of a local development corporation secured by a mortgage on a project, defined in subdivision fourteen (i) and (ii) of this section, made by a local development corporation, a project occupant or other person, firm or corporation; (ii) a loan evidenced by a bond, note or other obligation of a local development corporation, a project occupant, or other person, firm or corporation secured by a loan agreement, contract or such other instrument deemed necessary or convenient on a project defined in subdivision fourteen (iii) of this section; (iii) a loan evidenced by a bond, note or other obligation of a local development corporation, a project occupant, or other person, firm or corporation secured by a security interest in machinery and equipment as provided in section eighteen hundred fourteen; and (iv) an employee ownership assistance loan made pursuant to paragraph (v) of subdivision fourteen of this section. See N.Y. Public Authorities Law 1801
  • Loan guarantee: shall mean the guaranteeing by the authority of a loan made by a banking organization on a project as defined in subdivision fourteen of this section. See N.Y. Public Authorities Law 1801
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Personal property: All property that is not real property.
  • Project: shall mean (i) the construction of a new industrial or manufacturing plant, a new research and development building or other new eligible business facility, (ii) the acquisition, rehabilitation or improvement of a former or existing industrial or manufacturing plant, of a former or existing building to be used for research and development, of a former or existing other eligible business facility, (iii) the construction, acquisition, rehabilitation or improvement of pollution control facilities, (iv) the purchase of machinery and equipment, for which financial assistance from the authority is sought, or (v) assistance to employees under an employee ownership assistance loan agreement made pursuant to subtitle six of this title; provided, however, that any such plant, building, facility or machinery and equipment therefore shall not be primarily used in making retail sales of goods or services to customers who personally visit such facilities to obtain such goods or services, or used primarily as a hotel, apartment house or other place of business which furnishes dwelling space or accommodations to either residents or transients. See N.Y. Public Authorities Law 1801

2. Notwithstanding such transfer, all liens upon such property which are duly perfected prior to the recording of such deed in lieu of foreclosure, including any lien of the authority, shall continue in full effect and shall be subject to foreclosure at the suit of any of the lienholders, including the authority, and such lienholders' mortgage or other security interest shall not be deemed merged or unenforceable by such transfer.

3. Such deed given prior to recording shall be fully effective in passing title and all rights of ownership upon recording thereof by the authority notwithstanding the passage of time or changes in the ownership and officers of the project owner.

4. Notice that such deed in lieu of foreclosure exists shall be recorded in the office of the clerk of the county where such real or personal property is situated and shall be in the form prescribed in subdivision six of this section.

5. After the recording of such deed by the authority, the authority shall commence a foreclosure action upon its lien within one hundred twenty days in accordance with the real property actions and proceedings law. The grantor and former project owner may commence an action to compel the authority to foreclose its lien after such period of time, and is entitled to the excess of funds received from the foreclosure sale over the total liens outstanding on the property.

6. Such notice shall be in the form of a deed, duly acknowledged by the grantor and stating on its face "This is a security interest held by the New York job development authority and shall pass title to the within described property upon the recording of such deed in accordance with § 1804-a of the public authorities law".

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