New York Proposes Updates to Flood Requirements
On April 22, 2024, the New York State Legislature introduced Assembly Bill A8030, proposing additional updates to Section 283 of the real property law. This section was recently amended by Assembly Bill A2056 to update flood insurance requirements, and this new bill seeks to refine and clarify these provisions further.
The proposed bill provides added language that, if passed, will provide the following updates:
- A minor revision to clarify that replacement value means the replacement value of the improvements to the residential real property. The proposed language would read: “the lesser of the replacement value of the improvement on the residential real property or the outstanding principal mortgage balance as of the beginning of the year for which the policy shall be in effect.”
- In the case of an open-end line of credit, “principal” shall include the full line of credit amount regardless of the amount that has been drawn on the line of credit.
- Clarification that any entity required to follow federal flood insurance regulations will be considered compliant with this proposed law if it meets the rules set by the applicable federal agency and shall not be in violation of this law when it requires flood insurance in minimum required amount or for contents under the National Flood Insurance Act and applicable regulations. This includes entities regulated by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Association, or the Farm Credit Administration.
There are no proposed changes to the written notice that mortgagees must provide to borrowers. Please refer to the bill linked above to view the full text of the required notice.
Proctor will continue to track the movement of this proposed legislation and provide updates as needed.