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 648.1 - Mortgages for indefinite amounts

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 256
(a)
				  A mortgage for an indefinite amount is one where it is not possible to
				  determine from the terms of the mortgage itself the maximum amount of principal
				  debt or obligation which is, or under any contingency may be, secured at the
				  date of execution thereof or at any time thereafter.
(b)
(1) If
				  a mortgage secures the repayment of a specific sum of money and also contains
				  provisions that set forth that the mortgage may secure additional amounts,
				  which represent expenses incurred by the mortgagee on behalf of the mortgagor
				  in the event of the mortgagor's failure to perform a covenant or obligation
				  under the terms of the mortgage relating to maintaining the real property,
				  preserving its value and protecting the mortgagee's lien, the expenses in the
				  event of a foreclosure, and interest and late payment charges, which shall be
				  referred to for purposes of this Part as incidental amounts, such a mortgage is
				  not a mortgage for an indefinite amount, provided that such failure to perform
				  a covenant or obligation under the terms of the mortgage resulting in such
				  expenses being incurred by the mortgagee, constitutes a condition of default
				  under the terms of the mortgage.
(2) Examples of incidental amounts as
				  described in paragraph (1) of this subdivision, which may become secured by a
				  mortgage for the purpose of maintaining and preserving the value of the real
				  property or protecting the mortgagee's lien are as follows:
(i) the amounts paid by the mortgagee for
				  real property taxes, charges or assessments which are imposed by law upon the
				  mortgaged premises upon failure of the mortgagor to do so, where such failure
				  constitutes a default under the mortgage;
(ii) the amounts paid by the mortgagee for
				  insurance premiums covering the mortgaged premises upon failure by the
				  mortgagor to do so, where such failure constitutes a default under the
				  mortgage; and
(iii) any amount,
				  cost or charge to which the mortgagee becomes subrogated upon payment, provided
				  such payment is made as a result of the mortgagor's failure to pay the same and
				  such failure constitutes an event of default under the mortgage.
(3) Where a mortgagee has advanced
				  sums of money on behalf of the mortgagor in payment of incidental amounts as
				  described in paragraph (1) of this subdivision, or the mortgagee has deferred
				  the payment of such incidental amounts due from the mortgagor, and the mortgage
				  is modified or otherwise amended to provide that such advances or deferrals are
				  to be secured by the mortgage as modified or amended, thus increasing the
				  amount secured by the mortgage, the recording of an instrument evidencing such
				  increase in the amount secured shall be taxable in accordance with section
				  645.2(a) 
				  of this Title.