New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCE
Chapter IV - Sales And Use And Other Miscellaneous Taxes
Subchapter D - Mortgage Recording Taxes
Part 648 - Mortgages For Indefinite Amounts
Section 648.1 - Mortgages for indefinite amounts
Universal Citation: 20 NY Comp Codes Rules and Regs ยง 648.1
Current through Register Vol. 46, No. 12, March 20, 2024
Tax Law, § 256
(a) A mortgage for an indefinite amount is one where it is not possible to determine from the terms of the mortgage itself the maximum amount of principal debt or obligation which is, or under any contingency may be, secured at the date of execution thereof or at any time thereafter.
(b)
(1) If a mortgage secures the repayment of a
specific sum of money and also contains provisions that set forth that the
mortgage may secure additional amounts, which represent expenses incurred by
the mortgagee on behalf of the mortgagor in the event of the mortgagor's
failure to perform a covenant or obligation under the terms of the mortgage
relating to maintaining the real property, preserving its value and protecting
the mortgagee's lien, the expenses in the event of a foreclosure, and interest
and late payment charges, which shall be referred to for purposes of this Part
as incidental amounts, such a mortgage is not a mortgage for an indefinite
amount, provided that such failure to perform a covenant or obligation under
the terms of the mortgage resulting in such expenses being incurred by the
mortgagee, constitutes a condition of default under the terms of the
mortgage.
(2) Examples of
incidental amounts as described in paragraph (1) of this subdivision, which may
become secured by a mortgage for the purpose of maintaining and preserving the
value of the real property or protecting the mortgagee's lien are as follows:
(i) the amounts paid by the mortgagee for
real property taxes, charges or assessments which are imposed by law upon the
mortgaged premises upon failure of the mortgagor to do so, where such failure
constitutes a default under the mortgage;
(ii) the amounts paid by the mortgagee for
insurance premiums covering the mortgaged premises upon failure by the
mortgagor to do so, where such failure constitutes a default under the
mortgage; and
(iii) any amount,
cost or charge to which the mortgagee becomes subrogated upon payment, provided
such payment is made as a result of the mortgagor's failure to pay the same and
such failure constitutes an event of default under the mortgage.
(3) Where a mortgagee has advanced
sums of money on behalf of the mortgagor in payment of incidental amounts as
described in paragraph (1) of this subdivision, or the mortgagee has deferred
the payment of such incidental amounts due from the mortgagor, and the mortgage
is modified or otherwise amended to provide that such advances or deferrals are
to be secured by the mortgage as modified or amended, thus increasing the
amount secured by the mortgage, the recording of an instrument evidencing such
increase in the amount secured shall be taxable in accordance with section
645.2(a)
of this Title.
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