New York legislation · 2025-2026 General Assembly
New York S9796: Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership
Status: In committee, June 5, 2026
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 the bill says
An act to amend the general obligations law, in relation to pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership.
From the introduced text, April 6, 2026:
AN ACT to amend the general obligations law, in relation to pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Paragraph b of subdivision 3 of section 5-501 of the general obligations law, as amended by chapter 472 of the laws of 2008, is amended to read as follows: b. notwithstanding any other provision of law, the unpaid balance of the loan or forbearance may be prepaid, in whole or in part, at any time. If prepayment is made on or after one year from the date the loan or forbearance is made, no penalty may be imposed. If prepayment is made prior to such time, no penalty may be imposed unless provision therefor is expressly made in the loan contract, provided that no penalty may be imposed if prohibited by sections six-l and six-m of the banking law. NO PREPAYMENT PENALTY OR FEE SHALL BE CHARGED OR COLLECTED ON A LOAN OR FORBEARANCE SECURED BY REAL PROPERTY OWNED IN A COOPERATIVE FORM OF OWNERSHIP WHERE OVER FIFTY PERCENT OF THE UNITS ARE SHAREHOLDER OCCUPIED. SUCH PREPAYMENT PENALTY SHALL BE UNENFORCEABLE. In all cases, the right of prepayment shall be stated in the instrument evidencing …
Sponsors
- Luis Sepúlveda (D, 32) · primary sponsor
Latest actions
- : COMMITTED TO RULES
- : ADVANCED TO THIRD READING
- : 2ND REPORT CAL.
- : 1ST REPORT CAL.1189
- : REFERRED TO JUDICIARY
Votes
- Senate Judiciary Committee: COMMITTEE Vote (May 19, 2026): 17 yea, 2 nay, passed
- Judiciary Committee Vote (May 19, 2026): 17 yea, 2 nay, passed
Subjects: General Obligations Law
Common questions
- What is S9796?
- S9796 is a bill in the New York Legislature (2025-2026 General Assembly): Relates to prohibiting pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership.
- What does S9796 do?
- In its own words: An act to amend the general obligations law, in relation to pre-payment penalties for mortgages secured by real property owned in a cooperative form of ownership.
- What is the status of S9796?
- In committee as of June 5, 2026. Latest action: COMMITTED TO RULES (June 5, 2026).
- Who sponsored S9796?
- Luis Sepúlveda (D, 32).
- Where is the official record for S9796?
- On the New York Legislature website: https://www.nysenate.gov/legislation/bills/2025/S9796
Source: official New York record. Tracked by Delilah, AI for legislation across all 50 states and Congress.