New York Laws
Article 8 - Conveyances and Mortgages
254-B - Limitation on Late Charges.

§ 254-b. Limitation on late charges. 1. If a bond or note, or the
mortgage on real property, heretofore or hereafter made, improved by a
one to six family residence occupied by the owner, securing the payment
of same, or a note representing a loan for the purpose of financing the
purchase of an ownership interest in, and proprietary lease from, a
corporation or partnership formed for the purpose of the cooperative
ownership of residential real estate, contains a provision whereby the
mortgagee or lender retains the right to collect a late charge on any
instalment which has become due and remains unpaid, such charge on any
such delinquent instalment, regardless of the period it remains in
default, shall not exceed and shall only be enforced to the extent of
two percent of such delinquent instalment; provided, however, that no
charge shall be imposed on any instalment paid within fifteen days after
the due date. No such late charge shall be deducted from any regular
instalment payment by the mortgagor or borrower, but shall be separately
charged and collected by the mortgagee or lender. In the absence of a
specific provision in a bond, note or mortgage no late charge on any
delinquent instalment shall be assessed or collected. The term
"instalment" shall include amounts representing interest, amortization
of principal and payments in respect of insurance premiums, taxes and
utility charges if the bond, note or mortgage provides for collection
thereof by the mortgagee.

2. The provisions in this section shall not apply to any loan or
forbearance insured by the federal housing commissioner or for which a
commitment to insure has been made by the federal housing commissioner
or to any loan or forbearance insured or guaranteed pursuant to the
provisions of an act of congress entitled "Servicemen's Readjustment Act
of 1944", or to the extent the provisions of this section are
inconsistent with any other federal law or regulation.

3. If any provision of this section, or the application of such
provision to any individual, company, corporation, or circumstance,
shall be held invalid, the remainder of this section, and the
application of such section to individuals, companies, corporations, or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

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