2023 New York Laws › RPA - Real Property Actions and Proceedings › Article 7 - Summary Proceeding to Recover Possession of Real Property › 756-A - Stay of Action or Proceeding When a Party's Claim to Title Is in Dispute.

§ 756-a. Stay of action or proceeding when a party's claim to title is
in  dispute. 1. (a) A federal, state or local government agency may move
for a stay of any proceeding to recover possession of or quiet title  to
real property relating to a residential dwelling unit or property, based
on  a  pending  good  faith investigation into the theft or fraud in the
title to, or the financing of, the premises that is the subject  of  any
proceeding.  Upon  the  agency's showing of the pendency of a good faith
investigation, the court shall issue a stay of the proceeding, including
staying execution of a warrant of eviction or enforcement of a  judgment
so long as the investigation is ongoing.
(b)  Every  six  months,  the court shall schedule a status conference
with the government agency and any other parties to the action to review
any stay and to determine if the investigation is  still  continuing  in
good  faith  and  shall  continue  the  stay of the proceeding until the
government investigation is closed. If it should deem necessary, a court
may review any supporting documents filed by the  government  agency  in
camera  and to be filed under seal if deemed necessary by the government
agency.
2. The court shall stay all proceedings to recover  possession  of  or
quiet  title to real property relating to a residential dwelling unit or
property, where a charging instrument is filed against a party  to  such
proceeding  for  deed  theft,  larceny,  offering a false instrument for
filing,  criminal  possession  of  stolen  property  or  any  other  law
asserting  theft  or  fraud  in  obtaining  title  to  property and said
charging instrument relates to the premises that are the subject of such
proceeding. The stay shall remain in effect  until  resolution  of  such
criminal action.
3.  The  court  shall stay all proceedings to recover possession of or
quiet title to real property relating to a residential dwelling unit  or
property,  where  a  federal,  state  or  local  government  agency  has
commenced a civil action or proceeding relating to the theft or fraud in
the title to, or the financing of, the premises that are the subject  of
such proceeding.
4.  The  court  shall stay all proceedings under section seven hundred
eleven or seven hundred thirteen of this  article  for  ninety  days  to
allow  a  party  to  file  a complaint in the appropriate forum when the
court makes a determination that there is a bona  fide  dispute  between
parties  purporting  to  own  the  property  that  is the subject of the
proceeding.
(a) A rebuttable presumption that a bona fide dispute to title  exists
shall  be  created  when the party disputing petitioner's title, owns or
owned the property that is the subject of the  court  proceeding  during
the  last  three  years,  or  is a person interested in the property, as
defined by section one hundred three of the surrogate's court  procedure
act.
(b)  A  party may seek an additional stay of the proceeding beyond the
initial ninety day stay by the court if  they  were  unable  to  file  a
complaint  or seek a stay from another forum. In extending the stay, the
court  shall  consider,  without  limitation,  the   totality   of   the
circumstances  including  steps  the  parties  have taken to resolve the
dispute, the harm to the parties of a further stay, and the  ability  of
the parties to advocate for themselves or retain counsel.
(c)  This section shall not apply to any proceeding commenced pursuant
to subdivision ten of section seven hundred thirteen of this article.
5. Nothing in this section shall diminish the court's  own  discretion
to further stay a proceeding in the interests of justice.
6.  Nothing  in  this section shall limit a party from seeking relief,
including a stay of a proceeding under this article, in another court.
7. For purposes of this section, a proceeding to recover possession of
or quiet title to real  property  shall  include  any  proceeding  under
section  seven hundred eleven or seven hundred thirteen of this article,
an ejectment action or a writ of  assistance  pursuant  to  section  two
hundred  twenty-one  of this chapter, a foreclosure action, an action to
enforce a mortgage note, or any  other  action  affecting  title  to  or
encumbrance  upon real property, or any other judicial or administrative
proceeding to recover possession of or quiet title to real property.
8. For purposes of this section, a party shall include:
(a) a corporation, limited liability  company,  partnership  or  other
entity  where a charging instrument has been filed against an individual
who has a financial or controlling interest in  the  entity  that  holds
title to the property; or
(b) where a charging instrument has been filed against a seller of the
property,  including  an  individual  or  corporation, limited liability
company, partnership or other entity, or where a charging instrument has
been filed against an individual who  has  a  financial  or  controlling
interest in the entity that sold the property.