New York Adopts Proposed Changes to Flood Requirements
Recently, Proctor informed you about proposed legislation in New York that would amend real property law prohibiting mortgagees from requiring mortgagors of certain real property to purchase flood insurance exceeding certain limits, as proposed in A5073.
On February 14, 2025, the New York Governor signed Assembly Bill A2056 into law. The bill revises the maximum flood coverage requirement of A5073 to now provide that mortgagees cannot require flood insurance coverage to exceed “the lesser of the replacement value of the residential real property or the outstanding principal mortgage balance.”
Additionally, minor revisions were made to the written notice that mortgagees must provide to borrowers when borrowers are required by the mortgagee to purchase or pay for flood insurance. The updated notice no longer includes a statement that the required coverage only protects the mortgagee’s interest in the property. Please refer to the bills linked above to view the full text of the required notice.
These requirements will become effective May 15, 2025.
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