News

New York Legislation Could Limit Loan Agreement Language

July 1, 2025

Legislation on New York Governor Kathy Hochul’s (D-NY) desk would prohibit rent minimums in mortgage loan agreements. 

  • The bills A174 and S1163 passed both chambers in mid-June, but the Governor has yet to sign the legislation. 

Why it matters: There are concerns that the broad language in the bill could have unintended consequences for lenders’ rights, such as lease approvals. 

The text of the operative language is below: 

Rent Minimums Prohibited. No mortgagor on a loan secured primarily by an interest in real property shall be charged a fee, forced to default, or otherwise penalized by the mortgagee because the mortgagor did not set a high enough rent on all or part of such real property. All terms of a mortgage which would cause a mortgagor to be penalized for not setting a high enough rent shall be void and unenforceable as against public policy.
If enacted, the provision would take effect immediately and be retroactive.

What’s next: CREFC is working with industry partners to understand the potential impact and next steps on the legislation.

Contact Sairah Burki (sburki@crefc.org) and David McCarthy (dmccarthy@crefc.org) with any questions.

Contact 

Sairah Burki
Managing Director,
Head of Regulatory Affairs and Sustainability
703.201.4294

David McCarthy
Managing Director,
Chief Lobbyist, Head of Legislative Affairs
202.448.0855
dmccarthy@crefc.org
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The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2025 CRE Finance Council. All rights reserved.

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