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New York Court of Appeals Decision Clarifies RPAPL Notice Requirements, Affirms Heightened Standard for Borrowers

Last year, as we reported, the Second Circuit requested that the New York Court of Appeals rule on two certified questions concerning predicate notices in foreclosure actions. On March 30, 2021, the Court of Appeals issued its decision in Schiffman on the questions certified by the Second Circuit concerning New York Real Property Actions and Proceedings Law (RPAPL) §§ 1304 (90-day predicate notice) and 1306 (pre-foreclosure filing with the superintendent of banks).

Adding to its string of recent decisions clarifying the law in the mortgage foreclosure arena, the Court of Appeals affirmed the heightened standard that a borrower must meet to rebut the presumption of receipt of the requisite RPAPL § 1304 notices. Home with foreclosure sign in front yardSpecifically, the borrower(s) must show that the mailing procedure was not followed by proving the existence of a "material deviation" from standard office mailing practice; that is, the borrower(s) must establish that "the routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed."

Furthermore, the Court of Appeals addressed the nature of the departure from the standard practice. It held that "there must be proof of a material deviation from an aspect of the office procedure that would call into doubt whether the notice was properly mailed, impacting the likelihood of delivery to the intended recipient." Regarding RPAPL § 1306, the Court of Appeals affirmed that in a case that involves multiple borrowers, the § 1306 filing is in compliance with the statute as long as it identifies one of the borrowers because the statute was legislated exclusively for monitoring on a statewide basis the extent of foreclosure filings within the state.

The ruling helps clarify the standards that the trial courts must apply when hearing challenges to service involving predicate notices in mortgage foreclosure proceedings.