New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter IV - Sales And Use And Other Miscellaneous Taxes › Subchapter D - Mortgage Recording Taxes › Part 648 - Mortgages For Indefinite Amounts › Section 648.2 - Procedure to follow when recording a mortgage for an indefinite amount

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 256
(a)
(1) When a mortgage for an indefinite amount
				  is presented for recording, the mortgagee may file with the recording officer a
				  sworn statement of the maximum amount secured or which under any contingency
				  may be secured by the mortgage at the date of execution or any time thereafter.
				  Provided, however, that the maximum amount secured or which under any
				  contingency nay be secured by the mortgage at the date of execution or any time
				  thereafter as set forth in such statement can in no event be less than that
				  portion of such amount secured which is determinable by the terms of the
				  mortgage. Such sworn statement may be a separate document or be contained in
				  the mortgage instrument itself. If the sworn statement is filed or a statement
				  is contained in the mortgage itself stating such maximum amount, the taxes
				  described in Part 642 of this Title shall be based and computed on such maximum
				  amount.
Example 1:
A mortgage is presented for recording which provides that
					 it shall secure the repayment of a $3 million loan and also it shall stand as
					 security for the repayment of further loans which shall be made by the
					 mortgagee to the mortgagor. Such mortgage would be considered a mortgage for an
					 indefinite amount. The mortgagee chooses to file the statement as to the
					 maximum amount secured by the mortgage. Accordingly, such stated maximum amount
					 cannot be less than $3 million.
(2) Where such sworn statement is filed by
				  the mortgagee, the statement shall thereafter at all times be binding upon and
				  conclusive against such owner, the holders of any bonds or obligations secured
				  by such mortgage and all persons claiming through the mortgagee any interest in
				  the mortgage or the mortgaged premises. Examples of statements that would have
				  the effect of establishing the maximum amount of principal debt or obligation
				  secured by a mortgage for purposes of measuring the tax imposed pursuant to
				  section 253  of
				  the Tax Law are as follows:
(i)
				  notwithstanding anything contained to the contrary the maximum amount of
				  principal indebtedness secured by this mortgage at the time of execution hereof
				  or which under any contingency may become secured by this mortgage at any time
				  hereafter is $___; or
(ii)
				  notwithstanding anything contained herein to the contrary the maximum amount of
				  principal indebtedness secured by this mortgage at the time of execution hereof
				  or which under any contingency may become secured by this mortgage at any time
				  hereafter is $____; plus
(a) taxes, charges or
				  assessments which may be imposed by law upon the premises;
(b) premiums on insurance policies covering
				  the premises;
(c) expenses incurred
				  in upholding the lien of this mortgage, including, but not limited to:
(1) the expenses of any litigation to
				  prosecute or defend the rights and lien created by this mortgage;
(2) any amount, cost or charges to which the
				  mortgagee becomes subrogated, upon payment, whether under recognized principles
				  of law or equity, or under express statutory authority; and
(3) interest at the default rate (or regular
				  interest rate).