2021 New York Laws
RPP - Real Property
Article 4-A - Trust Indentures and Interests Therein
126 - Trust Indentures.

§  126.  Trust  indentures.  No trustee shall hereafter accept a trust
under any trust indenture or mortgage within the contemplation  of  this
article  or act as trustee thereunder unless the instrument creating the
trust shall contain the following provisions, among others, which confer
the following powers and impose the following duties upon the trustees:
  1. In the case of an event of default (as such term is defined in such
instrument), to exercise such of the rights and  powers  vested  in  the
trustee by such instrument, and to use the same degree of care and skill
in  their  exercise  as  a  prudent  man would exercise or use under the
circumstances in the conduct of his own affairs.
  2. In  considering  what  actions  are  or  are  not  prudent  in  the
circumstances, to consider whether or not:
  (a) to take such action as may be necessary or proper to sequester the
rents and income of the property;
  (b)  to  procure from the owner of the property an assignment of rents
and/or a consent to enter into possession of the property and to collect
the rents therefrom;
  (c) to apply to the court for the appointment of  a  receiver  of  the
rents and income of the property;
  (d)  to  declare  due  and  payable  forthwith  any  principal  amount
remaining due and unpaid and commence an action of foreclosure;
  (e) to apply the moneys received as rents and income from the property
as well as moneys received by the trustee from  any  receiver  appointed
for such property in his discretion, to the maintenance and operation of
such  property, the payment of taxes, water rents and assessments levied
thereon and any arrears thereof, to the payment of underlying liens, and
to the creation and maintenance of a reserve or sinking fund.
  3. If the trustee can  obtain  the  information  without  unreasonable
effort  or  expense,  to  render  annually  to  bondholders,  after  the
occurrence of a default, unless such  default  be  previously  cured,  a
summarized  statement  of income and expenditures in connection with the
property.
  4. To distribute the proceeds of any sale or other disposition of  the
property  ratably among the bondholders, subject to applicable mandatory
provisions of law.
  5. To permit the obligor or other person in possession or  control  of
the  property,  or  his successors in interest, to be free to select the
insurance broker or agent through whom any insurance of any kind  is  to
be  placed  or written on any property affected or covered by a mortgage
held by such trustee.