Requires the modification of restrictive covenants prior to the sale of real property, the official text

S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8760
 
                             I N  S E N A T E
 
                              January 8, 2026
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the real property law,  in  relation  to  requiring  the
   modification  of restrictive covenants prior to the sale of real prop-
   erty
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 327-a of the real property law, as added by a chap-
 ter  of  the  laws  of  2025  amending the real property law relating to
 requiring the modification of restrictive covenants prior to the sale of
 real property, as proposed in legislative bills numbers S. 3178-A and A.
 1820-A, is amended to read as follows:
   § 327-a. Modification of restrictive covenants. 1.   AS USED  IN  THIS
 SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (a) [If any covenants, conditions and restrictions exist in a document
 to be recorded which discriminate on the basis of race, color, religion,
 sex,  sexual  orientation,  familial status, marital status, disability,
 national origin, source of income, or ancestry] "PROTECTED CLASS"  SHALL
 MEAN  ANY CLASS OR CATEGORY OF PERSONS PROTECTED FROM UNLAWFUL DISCRIMI-
 NATORY PRACTICES UNDER SUBDIVISION FIVE OF SECTION TWO  HUNDRED  NINETY-
 SIX OF THE EXECUTIVE LAW.
   (B)  "UNLAWFUL  RESTRICTIONS" SHALL MEAN ANY COVENANTS, CONDITIONS, OR
 RESTRICTIONS THAT UNLAWFULLY DISCRIMINATE ON THE BASIS  OF  A  PROTECTED
 CLASS IN VIOLATION OF STATE OR FEDERAL LAW.
   2.  IF  ANY  UNLAWFUL RESTRICTIONS EXIST IN A DOCUMENT TO BE RECORDED,
 any seller shall:
   [(i)] (A) have such unlawful restrictions removed from  such  document
 by  submitting a restrictive covenant modification document, which shall
 be available from the county recorder, either with the deed for  record-
 ing, or separately;
   [(ii)]  (B)  provide the purchaser or title insurance applicant with a
 copy of the appropriate restrictive covenant modification document prior
 to or at the closing of title; and
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00409-04-6
 S. 8760                             2
 
   [(iii)] (C) record the  restrictive  covenant  modification  document,
 however,  such  seller  shall not be required to pay filing fees for the
 recording of the restrictive covenant modification document.
   [(b)]  3.  Within  one year of the effective date of this section, the
 board of managers of a condominium, the board of directors of a  cooper-
 ative  apartment  corporation  or  a homeowners association if such real
 property is subject to the rules and regulations of such an association,
 shall  delete  or  amend  any  [covenants,  conditions   and]   UNLAWFUL
 restrictions  that  exist  in a recorded document [which discriminate on
 the basis of race, color, religion, sex,  sexual  orientation,  familial
 status,  marital  status, disability, national origin, source of income,
 or ancestry]. Such deletions or amendments shall not be subject  to  the
 approval of property owners.
   [(c)  This  section  shall  not apply to any lawful restrictions under
 state and federal law.
   2.] 4. The restrictive covenant modification document  THAT  SHALL  BE
 MADE  AVAILABLE  FROM THE COUNTY RECORDER PURSUANT TO SUBDIVISION SIX OF
 THIS SECTION shall be indexed in  the  same  manner  as  any  previously
 recorded document or documents to which the modification document refers
 and  shall  reference  the  original document by book and page number or
 instrument number and the date of recording.
   [3. Subject to covenants, conditions, and restrictions recorded  after
 the  original  document containing unlawful restrictions, and subject to
 covenants, conditions and restrictions recorded  after  the  restrictive
 covenant  modification  document, the restrictive covenant modification,
 once recorded, shall be deemed the only restrictions  having  effect  on
 the property.
   4.]  5. Any person holding an ownership interest in real property that
 such person believes is subject to an [unlawfully  restrictive  covenant
 in  violation  of  state or federal law prohibiting restriction based on
 race, color, religion, sex, sexual orientation, familial status, marital
 status, disability, national origin,  source  of  income,  or  ancestry]
 UNLAWFUL  RESTRICTION  may  record  a  restrictive covenant modification
 document pursuant to subdivision  [one]  TWO  of  this  section.    Such
 recording  shall  include  a  complete  copy  of  the  original document
 containing  the  unlawful  [language]  RESTRICTION  with  the   unlawful
 [language]  RESTRICTION  stricken  and  shall be signed under penalty of
 law.
   [5.] 6. The county recorder shall make available to the  public  forms
 for preparation of a restrictive covenant modification document.
   [6.]  7.  If the holder of an ownership interest in property causes to
 be recorded a restrictive covenant  modification  document  pursuant  to
 this section which contains language not authorized by this section, any
 liability  which derives from such recording shall be the sole responsi-
 bility of the holder of the ownership interest of record and the  county
 recorder shall not incur any liability for recording such document.
   8.  THIS  SECTION SHALL NOT APPLY TO ANY LAWFUL COVENANTS, CONDITIONS,
 OR RESTRICTIONS UNDER STATE OR FEDERAL LAW.
   § 2. This act shall take effect on the  same  date  and  in  the  same
 manner  as  a chapter of the laws of 2025 amending the real property law
 relating to requiring the modification of restrictive covenants prior to
 the sale of real property, as proposed in legislative bills  numbers  S.
 3178-A and A. 1820-A, takes effect.