2012 New York Consolidated Laws
RPP - Real Property
Article 8 - (240 - 282) CONVEYANCES AND MORTGAGES
265-A - Home equity theft prevention.

 
    §  265-a.  Home  equity theft prevention. 1. (a) The legislature finds
  and declares that homeowners who are in default on their mortgages or in
  foreclosure may be vulnerable to fraud, deception, and unfair dealing by
  home equity purchasers. The  recent  rapid  escalation  of  home  values
  throughout  urban and rural areas has resulted in a significant increase
  in home equity, which constitutes the greatest financial asset  held  by
  many  homeowners  of  this  state.  During  the  time period between the
  default on  the  mortgage  and  the  scheduled  foreclosure  sale  date,
  homeowners   in   financial  distress,  especially  poor,  elderly,  and
  financially unsophisticated homeowners,  are  vulnerable  to  aggressive
  "equity  purchasers"  who  induce  homeowners  to sell their homes for a
  small fraction of their fair market values, or in some cases  even  sign
  away  their  homes,  through the use of schemes which often involve oral
  and  written  misrepresentations,  deceit,   intimidation,   and   other
  unreasonable commercial practices.
    (b)  The  legislature  declares  that  it is the express policy of the
  state to preserve and guard the precious asset of home equity,  and  the
  social as well as the economic value of homeownership.
    (c)  The  legislature  further finds that equity purchasers may have a
  significant impact upon the economy and well-being of this state and its
  local communities, and therefore the  provisions  of  this  section  are
  necessary to promote the public welfare.
    (d) The intent and purposes of this section are to provide a homeowner
  with  information necessary to make an informed and intelligent decision
  regarding the sale  or  transfer  of  his  or  her  home  to  an  equity
  purchaser;  to require that the sales agreement be expressed in writing;
  to safeguard equity sellers against deceit and  financial  hardship;  to
  ensure,  foster  and  encourage fair dealing in the sale and purchase of
  homes in foreclosure or default; to prohibit representations  that  tend
  to  mislead; to prohibit or restrict unfair contract terms; to provide a
  cooling off period for equity sellers who enter into covered  contracts;
  to  afford  equity  sellers  a  reasonable and meaningful opportunity to
  rescind sales to equity purchasers; and to  preserve  and  protect  home
  equity for the homeowners of this state.
    2. The following definitions shall apply to this section:
    (a)  "Bona  fide  purchaser  or  encumbrancer  for value" means anyone
  acting in good faith who purchases the residential  real  property  from
  the  equity  purchaser for valuable consideration or provides the equity
  purchaser with a mortgage or provides a subsequent bona  fide  purchaser
  with  a  mortgage,  provided  that he or she had no notice of the equity
  seller's continuing right to, or equity in, the property  prior  to  the
  acquisition of title or encumbrance, or of any violation of this section
  by the equity purchaser as related to the subject property.
    (b)  "Business day" means any calendar day except Sunday or the public
  holidays as set forth in section twenty-four of the general construction
  law.
    (c) "Covered contract" means any contract, agreement, or  arrangement,
  or  any  term  thereof,  between  an  equity purchaser and equity seller
  which:
    (i) is incident to the sale of a residence in foreclosure; or
    (ii) is incident to the sale of a residence in foreclosure or  default
  where  such  contract,  agreement or arrangement includes a reconveyance
  arrangement.
    For purposes of this  section,  any  reference  to  the  "sale"  of  a
  residence  by  an  equity  seller to an equity purchaser shall include a
  transaction where an  equity  seller  receives  consideration  from  the
  equity purchaser, and a transaction involving a transfer of title to the

  equity  purchaser  where  no  consideration  is  provided  to the equity
  seller.
    (d)  "Default"  means  that  the  equity  seller is two months or more
  behind in his or her mortgage payments.
    (e) "Equity purchaser" means any person  who  acquires  title  to  any
  residence  in  foreclosure  or, where applicable, default, or his or her
  representative as defined in  this  subdivision,  except  a  person  who
  acquires such title as follows:
    (i)  to  use,  and  who  uses,  such  property  as  his or her primary
  residence;
    (ii) by a deed from a referee in a foreclosure sale conducted pursuant
  to article thirteen of the real property actions and proceedings law;
    (iii) at any sale of property authorized by statute;
    (iv) by order or judgment of any court;
    (v) from a spouse, or from a parent, grandparent, child, grandchild or
  sibling of such person or such person's spouse;
    (vi) as a not-for-profit housing organization or as a  public  housing
  agency; or
    (vii) a bona fide purchaser or encumbrancer for value.
    (f)  "Equity seller" means a natural person who is a property owner or
  homeowner at the time of the equity sale.
    (g) "Foreclosure" means that there is an active lis pendens  filed  in
  court  pursuant  to  article  thirteen  of the real property actions and
  proceedings law against the subject property, or the subject property is
  on an active property tax lien sale list.
    (h) "Property owner" or "homeowner" means  any  or  all  record  title
  owners  of  the  residential  real  property  in  foreclosure  or, where
  applicable, default at the time of the equity sale.
    (i) "Reconveyance arrangement" means:
    (i) the transfer of title to residential real property  by  an  equity
  seller  who is in default or foreclosure, either by transfer of interest
  from an equity seller to  an  equity  purchaser  or  by  creation  of  a
  mortgage  or  other  lien  or  encumbrance during the time of default or
  foreclosure  that  allows  the  equity  purchaser  to  obtain  legal  or
  equitable title to all or part of the property, and
    (ii) the subsequent conveyance, or promise of a subsequent conveyance,
  of  an  interest  back to the equity seller by the equity purchaser that
  allows the equity seller to regain possession  of  the  property,  which
  interest  shall  include  but  not  be  limited to a purchase agreement,
  option to purchase, or lease.
    (j) "Representative" means  a  person  who  in  any  manner  solicits,
  induces,  arranges,  or  causes  any  equity seller to transfer title or
  solicits any member of the equity seller's family or household to induce
  or cause any equity  seller  to  transfer  title  to  the  residence  in
  foreclosure or, where applicable, default to the equity purchaser.
    (k) "Residence" and "residential real property" means residential real
  property  consisting of one- to four-family dwelling units, one of which
  the equity seller occupies or occupied at a time  immediately  prior  to
  the equity sale as his or her primary residence.
    3.  Every covered contract and notice of cancellation attached thereto
  shall be written in letters of a size equal  to  at  least  twelve-point
  bold  type,  in English or in both English and Spanish if Spanish is the
  primary language of the equity seller, and shall be fully completed  and
  signed  and  dated  by  the  equity  seller  and  equity  purchaser. Any
  instrument of conveyance shall become effective no sooner than  midnight
  of  the  fifth business day after the date on which the covered contract
  is executed.

    4. All covered contracts shall contain the  entire  agreement  of  the
  parties and shall include, but not be limited to, the following terms:
    (a) The name, business address, and the telephone number of the equity
  purchaser;
    (b)  The address of the residence in foreclosure or, where applicable,
  default;
    (c) The total consideration to be given by  the  equity  purchaser  in
  connection with or incident to the sale;
    (d)   A  complete  description  of  the  terms  of  payment  or  other
  consideration including, but not limited to, any services of any  nature
  which  the  equity  purchaser  represents he or she will perform for the
  equity seller before or after the sale;
    (e) The time, if any, at which physical possession of the residence is
  to be transferred to the equity purchaser and the residence  vacated  by
  the equity seller;
    (f) The terms of any rental or lease agreement;
    (g) The terms of any reconveyance arrangement;
    (h)  A  notice  of  cancellation  as  provided  in  paragraph  (a)  of
  subdivision six of this section; and
    (i) The following notice shall appear on  the  contract  in  immediate
  proximity  to  the  space reserved for the equity seller's signature and
  shall be in at least fourteen-point bold type if the covered contract is
  printed or in capital letters if the  covered  contract  is  typed.  The
  notice  must  contain  the name of the equity purchaser and the date and
  time by which the covered contract must be cancelled. The  notice  shall
  be completed by the equity purchaser:
                      "NOTICE REQUIRED BY NEW YORK LAW
  You   may   cancel   this  contract  at  any  time  before  midnight  of
  ________________________________________.
                                     (Date)
  ________________________________________________________________________
                         (Name of Equity Purchaser)
  or anyone working for ____________________________ CANNOT ask you to
                         (Name of Equity Purchaser)
  sign or have you sign any deed or any other document until your right to
  cancel this contract has ended.   See attached  notice  of  cancellation
  form  for  an  explanation  of  this right. You should always consult an
  attorney or community organization before signing  any  legal  documents
  concerning  your  home. It is advisable that you find your own attorney,
  and not consult with an attorney who has been provided  to  you  by  the
  purchaser.  The  law  requires  that  this  contract  contain the entire
  agreement. You should not rely upon any other written or oral  agreement
  or promise."
    The  equity  purchaser  shall  accurately  enter the date on which the
  right to cancel ends. The covered  contract  required  by  this  section
  shall  survive delivery of any instrument of conveyance of the residence
  in foreclosure or, where applicable, default, and shall have  no  effect
  on persons other than the parties to the covered contract.
    5. (a) In addition to the right of rescission described in subdivision
  eight  of  this  section,  the equity seller has the right to cancel any
  covered contract with an equity purchaser until midnight  of  the  fifth
  business  day  following  the  day on which the equity seller and equity
  purchaser sign a covered contract that complies with this section.
    (b) Cancellation occurs when the equity seller, or a representative of
  the equity seller, personally delivers written notice of cancellation to
  the address specified in the covered contract  or  sends  a  letter  via
  facsimile  or  other means of written communication, United States mail,
  or through an established commercial letter delivery service, indicating

  cancellation to the business address of the equity purchaser  listed  on
  the  covered  contract.  Proof of facsimile delivery or proof of mailing
  creates  a  presumption  that  the  notice  of  cancellation  has   been
  delivered.
    (c)  A  notice  of cancellation given by the equity seller pursuant to
  paragraph (a) of this subdivision need not take the particular  form  as
  provided  with the covered contract and, however expressed, is effective
  if it indicates the intention of the equity seller not to  be  bound  by
  the covered contract.
    (d)  Within  ten  days  following  receipt of a notice of cancellation
  given in accordance with this subdivision, the  equity  purchaser  shall
  return  without  condition  any  original covered contract and any other
  documents signed by the equity seller  as  well  as  any  fee  or  other
  consideration  received  by the equity purchaser from the equity seller.
  Cancellation of the contract shall release  the  equity  seller  of  all
  obligations to pay fees to the equity purchaser.
    6.  (a)  The covered contract shall be accompanied by a form completed
  by the equity purchaser in duplicate, captioned "notice of cancellation"
  in at least twelve-point bold type if the covered contract is printed or
  in capital letters if the covered contract is typed. This form shall  be
  attached  to the covered contract, shall be easily detachable, and shall
  contain in type of at least twelve-point  if  the  covered  contract  is
  printed  or  in  capital  letters  if the covered contract is typed, the
  following statement written in the same language as used in the  covered
  contract:
                           "NOTICE OF CANCELLATION
   This contract was entered into on ____________________________________
                    (Enter date covered contract signed)
  You  may  cancel  this  contract for the sale of your house, without any
  penalty   or   obligation,   at   any   time    before    midnight    of
  ___________________________. (Enter date)
  To  cancel  this transaction, personally deliver a signed and dated copy
  of this cancellation notice, or send  it  by  facsimile,  United  States
  mail,  or  an established commercial letter delivery service, indicating
  cancellation to ____________________________________________________, at
  (Name of purchaser) ___________________________________
  (Street address of purchaser's place of business and facsimile number if
  any) NOT LATER THAN midnight of _______________________________________.
                                      (Enter date)
  If you wish to cancel this contract,  sign  and  date  both  copies  and
  return one copy immediately to the purchaser.
  I hereby cancel this transaction.
  __________________________________/_______________________________"
    (Seller's signature)                         (Date)
    (b)  The  equity  purchaser  shall provide each equity seller with two
  copies of the covered contract and attached notice of cancellation.  The
  equity  purchaser  shall accurately enter the date on which the right to
  cancel ends.
    7. (a) Before midnight of the fifth business day  after  the  date  on
  which  the  covered contract is executed, the equity purchaser shall not
  do any of the following:
    (i) accept from any equity seller  an  execution  of,  or  induce  any
  equity  seller  to execute, any instrument of conveyance of any interest
  in the residence in foreclosure or, where applicable, default;
    (ii) record with the county clerk any  document,  including,  but  not
  limited to, any instrument of conveyance, signed by the equity seller;

    (iii)  transfer  or  encumber  or  purport to transfer or encumber any
  interest in the residence in foreclosure or, where  applicable,  default
  to any third party;
    (iv) pay the equity seller any consideration; or
    (v)  suggest,  encourage,  or provide any form which allows the equity
  seller to waive his or  her  right  to  cancel  or  rescind  under  this
  section.
    (b)  An  equity  purchaser shall make no false or misleading statement
  regarding  the  value  of  the  residence  in  foreclosure   or,   where
  applicable,  default;  the  amount  of  proceeds  the equity seller will
  receive after a foreclosure sale; the timing of the judicial foreclosure
  process; any contract term; the equity seller's  rights  or  obligations
  incident  to  or  arising out of the sale transaction; the nature of any
  document which the equity purchaser induces the equity seller  to  sign;
  or  any  other  false or misleading statement concerning the sale of the
  residence in foreclosure or, where applicable,  default,  or  concerning
  the reconveyance arrangement.
    (c)  An  equity purchaser is prohibited from representing, directly or
  indirectly, that:
    (i) the equity purchaser is acting as an advisor or a  consultant,  or
  in  any  other  manner represents that the equity purchaser is acting on
  behalf of the equity seller;
    (ii) the equity purchaser has  certification  or  licensure  that  the
  equity  purchaser  does  not have, or that the equity purchaser is not a
  member of a licensed profession if he or she is actually such a member;
    (iii) the equity purchaser is assisting the equity seller to save  the
  house  unless  the  equity  purchaser  has  a  good  faith basis for the
  representation; or
    (iv) the equity purchaser is assisting the equity seller in preventing
  a completed foreclosure unless the equity purchaser  has  a  good  faith
  basis for the representation.
    (d)  It  is unlawful for any equity purchaser to initiate, enter into,
  negotiate, or consummate any covered contract involving residential real
  property in foreclosure or, where applicable, default if such person, by
  the terms of such covered contract, takes  unconscionable  advantage  of
  the equity seller.
    8.   (a)  Any  transaction  involving  residential  real  property  in
  foreclosure or, where applicable, default which is in material violation
  of subdivision three, four, six, seven or  eleven  of  this  section  is
  voidable  and  the  transaction  may  be  rescinded by the equity seller
  within two years of the date of the recording of the conveyance  of  the
  residential real property in foreclosure or, where applicable, default.
    (b)  Such rescission shall be effected by giving written notice to the
  equity purchaser and his or her successor in interest, if the  successor
  is  not  a bona fide purchaser or encumbrancer for value as set forth in
  paragraph (c) of this subdivision, and by recording such notice with the
  county clerk of the county in which the property is located, within  two
  years  of  the  date  of  the  recording of the conveyance to the equity
  purchaser. The notice of rescission shall contain the name of the equity
  seller and the name of the equity purchaser in addition to any successor
  in interest holding record title to the residential  real  property  and
  shall  particularly  describe such residential real property. The equity
  purchaser and his or her successor in interest if the successor is not a
  bona fide purchaser or encumbrancer for value as set forth in  paragraph
  (c)  of  this  subdivision, shall have twenty days after the delivery of
  the notice in which to reconvey title to the property free and clear  of
  encumbrances  created  subsequent to the rescinded transaction and which
  are due to the actions of the equity purchaser. As a  condition  of  the

  reconveyance  of  title,  the  equity  seller shall return to the equity
  purchaser any consideration received from the equity purchaser  as  part
  of  the original transaction. Upon failure to reconvey title within such
  time,  the  equity  seller may bring an action to enforce the rescission
  and for cancellation of the covered contract and deed.
    (c) The provisions of this subdivision shall not affect  the  interest
  of  a  bona fide purchaser or encumbrancer for value if such purchase or
  encumbrance occurred prior to the recording of the notice of  rescission
  pursuant  to  paragraph  (b)  of  this  subdivision.  Knowledge that the
  property  was  residential  real  property  in  foreclosure  or,   where
  applicable,  default  shall  not  impair  the  status of such persons or
  entities as bona  fide  purchasers  or  encumbrancers  for  value.  This
  subdivision  shall  not  be deemed to abrogate any duty of inquiry which
  exists as to rights  or  interests  of  persons  in  possession  of  the
  residential real property in foreclosure or, where applicable, default.
    (d)  In  any  action  brought to enforce a rescission pursuant to this
  section, a court may award to  a  prevailing  equity  seller  costs  and
  reasonable attorneys' fees.
    9. An equity seller may bring an action for the recovery of damages or
  equitable  relief  against  an  equity  purchaser  for  a  violation  of
  subdivision three, four, six, seven or eleven of this section.  A  court
  may  award  to a prevailing equity seller actual damages plus reasonable
  attorneys' fees and costs. In addition, the court  may  award  equitable
  relief, or increase the award in an amount not to exceed three times the
  equity  seller's  actual damages, or both, if the court deems such award
  proper. Any action brought pursuant to this section shall  be  commenced
  within six years after the date of the alleged violation.
    10.  (a)(i) Any equity purchaser who, with intent to defraud, violates
  subdivision seven of this section or engages in any practice which would
  operate as a criminal fraud or deceit upon an equity seller shall,  upon
  conviction,  be  guilty of a class E felony and subject to a fine of not
  more than twenty-five thousand dollars, imprisonment in accordance  with
  the penal law, or both.
    (ii)  Any equity purchaser who knowingly violates subdivision seven of
  this section shall, upon conviction, be guilty of a class A  misdemeanor
  and  subject  to  a  fine of not more than twenty-five thousand dollars,
  imprisonment in accordance with the penal law, or both. A second offense
  within five years shall be a class E felony and subject to a fine of not
  more than twenty-five thousand dollars, imprisonment in accordance  with
  the penal law, or both.
    (b)  An  equity  purchaser  who,  when  acting in good faith, violates
  subdivision seven of this section, shall not be deemed to have  violated
  such subdivision if the equity purchaser:
    (i) establishes by a preponderance of the evidence that the compliance
  failure  was  not  intentional  and  resulted  from  a  bona  fide error
  notwithstanding the maintenance  of  procedures  reasonably  adapted  to
  avoid such errors;
    (ii)  notifies  the  equity  seller within ninety days of the contract
  date of the compliance failure; and
    (iii)  makes  appropriate  restitution  to  the  equity   seller   and
  appropriate  adjustments  to  the  transaction within ninety days of the
  contract date.   Examples of bona  fide  errors  include,  but  are  not
  limited to, clerical, calculation, computer malfunction and programming,
  and  printing  errors.    An  error  of legal judgment with respect to a
  person's obligations under this section is not a bona fide error, nor is
  a failure to provide notices or other material information  required  by
  this section.

    11. (a) In any transaction in which an equity seller purports to grant
  a  residence  in  foreclosure  or  default to an equity purchaser by any
  instrument which appears to be an absolute conveyance  and  reserves  to
  himself  or  herself  or  is  given by the equity purchaser an option to
  repurchase,  such  transaction  shall  create  a  presumption  that  the
  transaction is a loan transaction, which may be overcome  by  clear  and
  convincing  evidence  to  the  contrary, and that the purported absolute
  conveyance is a mortgage.
    (b)  An  equity  purchaser  shall  not  enter  into   a   reconveyance
  arrangement unless:
    (i)  The  equity  purchaser verifies by appropriate documentation that
  the equity seller has or is likely to have a reasonable ability  to  pay
  for  the subsequent conveyance of an interest back to the equity seller.
  In the case of a lease with an option to purchase, payment ability  also
  includes the reasonable ability to purchase the property within the term
  of  the  option  to purchase. There is a rebuttable presumption that the
  equity purchaser has not verified  reasonable  payment  ability  if  the
  equity  purchaser  has  not obtained documents other than a statement by
  the equity seller of assets, liabilities and income.  The  standard  for
  determining  a  reasonable  ability to pay shall be the same standard as
  set forth in paragraph (k) of subdivision two of section  six-l  of  the
  banking law;
    (ii) the equity purchaser and the equity seller complete a closing for
  any  reconveyance  arrangement  in  which the equity purchaser obtains a
  deed or mortgage from an equity seller. For purposes  of  this  section,
  "closing"  means  an  in-person  meeting  to  complete  final  documents
  incident to the sale of the real property or creation of a  mortgage  on
  the  real property conducted by an attorney who is not employed by or an
  affiliate of the equity purchaser;
    (iii) the equity purchaser obtains the written consent from the equity
  seller before the equity purchaser grants any interest in  the  property
  to  anyone  else  during  such  time  as  the equity seller maintains an
  interest in the property, including an option to repurchase; and
    (iv) the equity purchaser notifies all existing mortgage lien  holders
  of his or her intent to accept conveyance of an interest in the property
  from the equity seller, and fully complies with all terms and conditions
  contained  in  the mortgage lien documents, including but not limited to
  due-on-sale provisions or meeting  all  qualification  requirements  for
  assuming the repayment of the mortgage.
    (c) An equity purchaser shall not enter into repurchase or lease terms
  as  part of the reconveyance arrangement that are unfair or commercially
  unreasonable, and is prohibited from engaging in  any  other  unfair  or
  unconscionable conduct.
    (d)  As  part of a reconveyance arrangement, an equity purchaser shall
  either:
    (i) ensure that title to the residence is  reconveyed  to  the  equity
  seller; or
    (ii)  make  a payment to the equity seller such that the equity seller
  has received consideration in an amount of at least  eighty-two  percent
  of  the fair market value of the property within one hundred twenty days
  of either the eviction or voluntary relinquishment of possession of  the
  residence  by  the  equity  seller.  The  equity  purchaser shall make a
  detailed accounting of the basis for the payment amount, or  a  detailed
  accounting  of  the  reasons  for  failure  to make a payment, including
  providing written documentation of expenses,  within  such  one  hundred
  twenty-day  period.  The accounting shall be on a form prescribed by the
  department of financial services. For purposes of this subparagraph, the
  following applies:

    (A) there is a rebuttable presumption that an appraisal  by  a  person
  licensed  or  certified  by  an agency of the federal government or this
  state to appraise real estate establishes the fair market value  of  the
  property;
    (B)  the  time  for  determining the fair market value amount shall be
  determined in the reconveyance arrangement as either at the time of  the
  execution  of  the  reconveyance arrangement or at resale to a bona fide
  purchaser. If the covered contract states that  the  fair  market  value
  shall  be  determined at the time of resale, the fair market value shall
  be the resale price if it is sold within one hundred twenty days of  the
  eviction  or  voluntary  relinquishment  of  the  property by the equity
  seller. If the covered contract states that the fair market value  shall
  be  determined  at  the  time of resale, and the resale is not completed
  within  one  hundred  twenty  days  of   the   eviction   or   voluntary
  relinquishment  of  the  property  by the equity seller, the fair market
  value shall be determined by an  appraisal  conducted  within  ten  days
  after  the  end  of  such  one hundred twenty-day period and payment, if
  required, shall be made to the equity seller. If payment is not made  to
  the  equity  seller  at  such  time,  the  fair  market  value  shall be
  recalculated as the resale price on resale and payment shall be made  to
  the  equity  seller within fifteen days of resale. A detailed accounting
  of the basis for the payment amount shall be made within fifteen days of
  resale, including  providing  written  documentation  of  expenses.  The
  accounting  shall be on a form prescribed by the department of financial
  services;
    (C) "consideration" shall mean any payment or thing of value  provided
  to the equity seller, including unpaid lease payments owed by the equity
  seller  prior to the date of eviction or voluntary relinquishment of the
  property, reasonable costs paid to third parties necessary  to  complete
  the  reconveyance  transaction,  payment  of  money to satisfy a debt or
  legal obligation of the equity seller or the reasonable cost of  repairs
  for  damage  to the dwelling caused by the equity seller beyond ordinary
  wear and tear; but shall not include amounts imputed  as  any  fee  paid
  directly   or  indirectly  to  the  equity  purchaser,  or  his  or  her
  representative, incident  to  a  reconveyance  arrangement,  except  for
  reasonable  costs  paid  to  third  parties  necessary  to  complete the
  reconveyance.
    (D) "resale" means a bona fide market sale of the property subject  to
  the  reconveyance arrangement by the equity purchaser to an unaffiliated
  third party.
    (E) "resale price" means the purchase price of the property on resale.
    (e) This subdivision shall not be  deemed  to  abrogate  any  duty  of
  inquiry  which exists as to rights or interests of persons in possession
  of the residential real property in foreclosure or default.
    (f) All deeds or conveyances subject  to  a  reconveyance  arrangement
  shall  state  explicitly on the face of the document that the conveyance
  is subject to a reconveyance arrangement, and shall state the  terms  of
  the  reconveyance  arrangement.  Moreover, all reconveyance arrangements
  must be simultaneously recorded by the equity purchaser with the subject
  deed in the county clerk's office where the property is located.
    12. Any provision of a covered contract which attempts or purports  to
  limit  the liability of the equity purchaser under this section shall be
  null and void. Inclusion of such provision shall at the  option  of  the
  equity  seller  render  the  covered contract void. The equity purchaser
  shall be liable to the equity seller for all damages proximately  caused
  by such provision. Any provision in a covered contract which attempts or
  purports  to  require  arbitration  of  any  dispute  arising under this
  section shall be void at the option of the equity seller.

    13. In addition to the other remedies provided, whenever  there  shall
  be  a violation of this section, application may be made by the attorney
  general in the name of the people of the state of New York to a court or
  justice  having  jurisdiction  by  a  special  proceeding  to  issue  an
  injunction, and upon notice to the defendant of not less than five days,
  to  enjoin  and  restrain  the continuance of such violations; and if it
  shall appear to the satisfaction  of  the  court  or  justice  that  the
  defendant  has,  in  fact,  violated  this section, an injunction may be
  issued by such court or justice, enjoining and restraining  any  further
  violation,  without  requiring  proof that any person has, in fact, been
  injured or damaged thereby. In any such proceeding, the court  may  make
  allowances  to  the  attorney  general  as  provided in paragraph six of
  subdivision (a) of section  eighty-three  hundred  three  of  the  civil
  practice law and rules, and direct restitution. Whenever the court shall
  determine  that  a violation of this section has occurred, the court may
  impose a civil penalty of not more than twenty-five thousand dollars for
  each violation. In connection with any such  proposed  application,  the
  attorney general is authorized to take proof and make a determination of
  the  relevant  facts and to issue subpoenas in accordance with the civil
  practice law and rules.
    14. This section shall not apply to a prior lien holder where the lien
  was properly recorded prior to the execution of any covered contract  by
  both  the equity seller and the equity purchaser nor shall any provision
  of this section be deemed to impair any equity or other available rights
  of any such prior lien holder.
    15. The provisions of this section shall  be  liberally  construed  to
  effectuate  the  intent  and  to  achieve  the  purposes  set  forth  in
  subdivision one of this section.
    16. The provisions of this  section  are  not  exclusive  and  are  in
  addition  to  any  other  requirements,  rights, remedies, and penalties
  provided by law.
    17. Any waiver of the provisions of this section  shall  be  void  and
  unenforceable as contrary to the public policy.
    18. If any provision of this section, or if any application thereof to
  any  person  or circumstances is held unconstitutional, the remainder of
  this section and the application of its provisions to other persons  and
  circumstances shall not be affected thereby.