By: Alexander J. Franchilli

On August 24, 2016, the New York Supreme Court, Appellate Division, Second Department, held that the 90-day notice required under Real Property Actions and Proceedings Law (“RPAPL”) § 1304(1) does not expire one year after its initial mailing. See Deutsche Bank Nat. Trust Co. v. Webster, 2016 N.Y. Slip Op 05846 (2d Dep’t 2016).  Under RPAPL § 1304(1), “a lender, an assignee or a mortgage loan servicer” must mail a notice containing statutorily prescribed language at least 90 days before commencing an action against the borrower of a home loan.

In Webster, the plaintiff commenced an action to recover a money judgment on a promissory note pursuant to RPAPL § 1301 on January 24, 2014. The plaintiff moved for summary judgment, and submitted a copy of a letter, dated April 15, 2011, to demonstrate compliance with the 90-day notice requirements of RPAPL § 1304.

The defendant cross-moved to dismiss the complaint, arguing, among other things, that the 90-day notice expired before the action was commenced.  In opposition, the plaintiff contended that the requirements of RPAPL § 1304 were not applicable because the plaintiff was not seeking to foreclose a mortgage.

Although the court determined that RPAPL § 1304 “is applicable to all legal actions involving home loans commenced against the borrower,” the court rejected the defendant’s argument that the 90-day notice had expired.

The court examined the language of RPAPL § 1304(4), which states: “[t]he notice and the ninety day period required by subdivision one of this section need only be provided once in a twelve month period to the same borrower in connection with the same loan.” Id.  The Court found that “the language does not state that the action must be commenced within 12 months of the RPAPL 1304 notice.”  Instead, the Court interpreted the language of RPAPL § 1304(4) as standing for the proposition that “if there are multiple defaults in the 12-month period, only one RPAPL 1304 notice is required.” Id.

This decision is significant for creditors because the Second Department has clarified that RPAPL 1304 does not require more than one 90-day notice and that such notice does not expire one year after it is mailed to the borrower.