Current through Register Vol. 46, No. 12, March 20, 2024
(a)
(1)
When a mortgage for an indefinite amount is presented for recording, the
mortgagee may file with the recording officer a sworn statement of the maximum
amount secured or which under any contingency may be secured by the mortgage at
the date of execution or any time thereafter. Provided, however, that the
maximum amount secured or which under any contingency nay be secured by the
mortgage at the date of execution or any time thereafter as set forth in such
statement can in no event be less than that portion of such amount secured
which is determinable by the terms of the mortgage. Such sworn statement may be
a separate document or be contained in the mortgage instrument itself. If the
sworn statement is filed or a statement is contained in the mortgage itself
stating such maximum amount, the taxes described in Part 642 of this Title
shall be based and computed on such maximum amount.
Example 1:
A mortgage is presented for recording which provides that
it shall secure the repayment of a $3 million loan and also it shall stand as
security for the repayment of further loans which shall be made by the
mortgagee to the mortgagor. Such mortgage would be considered a mortgage for an
indefinite amount. The mortgagee chooses to file the statement as to the
maximum amount secured by the mortgage. Accordingly, such stated maximum amount
cannot be less than $3 million.
(2) Where such sworn statement is filed by
the mortgagee, the statement shall thereafter at all times be binding upon and
conclusive against such owner, the holders of any bonds or obligations secured
by such mortgage and all persons claiming through the mortgagee any interest in
the mortgage or the mortgaged premises. Examples of statements that would have
the effect of establishing the maximum amount of principal debt or obligation
secured by a mortgage for purposes of measuring the tax imposed pursuant to
section
253 of
the Tax Law are as follows:
(i)
notwithstanding anything contained to the contrary the maximum amount of
principal indebtedness secured by this mortgage at the time of execution hereof
or which under any contingency may become secured by this mortgage at any time
hereafter is $___; or
(ii)
notwithstanding anything contained herein to the contrary the maximum amount of
principal indebtedness secured by this mortgage at the time of execution hereof
or which under any contingency may become secured by this mortgage at any time
hereafter is $____; plus
(a) taxes, charges or
assessments which may be imposed by law upon the premises;
(b) premiums on insurance policies covering
the premises;
(c) expenses incurred
in upholding the lien of this mortgage, including, but not limited to:
(1) the expenses of any litigation to
prosecute or defend the rights and lien created by this mortgage;
(2) any amount, cost or charges to which the
mortgagee becomes subrogated, upon payment, whether under recognized principles
of law or equity, or under express statutory authority; and
(3) interest at the default rate (or regular
interest rate).
(b)
(1) If
a sworn statement as to the maximum amount secured or which under any
contingency may be secured by the mortgagee at the date of execution or any
time thereafter, is not filed, the taxes described in Part 642 of this Title
must be computed based upon the higher of:
(i) the fair market value of the mortgaged
property on the date the mortgage was executed; or
(ii) the portion of such amount secured which
is determinable by the terms of the mortgage.
(2) The fair market value of the property is
determined by the recording officer to whom the mortgage is presented for
recording. At the time the mortgage is presented for recording the mortgagor or
mortgagee must provide to the recording officer such information as the
recording officer deems necessary for the purpose of computing such fair market
value of the property covered by the mortgage. The requested information must
include sworn statements of appraisal, made by at least two competent persons
who are not a party to the transaction related to the mortgage, which sets
forth the fair market value of such property as of the date of execution of the
mortgage.
(3) Where the appraisals
differ as to the fair market value of the property, the appraisal which sets
forth the highest fair market value shall be used for purposes of computing the
taxes described in Part 642 of this Title.
Example 2:
Same facts as in example 1 of this section, except that a
statement as to the maximum amount secured by the mortgage is not filed by the
mortgagee when the mortgage is presented for recording and the fair market
value of the property covered by the mortgage is $4 million. The mortgage
recording taxes would be imposed and computed upon the higher of the portion of
the amount secured which is determinable by the terms of the mortgage, which is
$3 million, or the fair market value of the property, which is $4 million.
Thus, the amount used to compute the taxes would be $4 million.
Example 3:
Same facts as in example 2, except that the fair market
value of the property is $2 million. Thus, $3 million is used to compute the
mortgage recording taxes.
(4) The determination by the recording
officer of the value of the property covered by the mortgage and copies of the
requested information used as the basis for computing the fair market value of
the property and computing the taxes shall be forwarded to and subject to
review by the commissioner.
(c) A mortgage for an indefinite amount shall
not be recorded unless the sworn statement as described at subdivision (a) of
this section or the information requested by the recording officer to whom the
mortgage was presented for recording, as described in subdivision (b) of this
section, is filed when the mortgage is presented for recording.
