New York Statute Of Limitations On Mortgage Debt Governed By GOL Section 17-105, Not 17-101

• Published date: 03 June 2022
• Subject Matter: Finance and Banking, Debt Capital Markets, Charges, Mortgages, Indemnities, Financial Services
• Law Firm: Holland & Knight
• Author: Mr Steven Gordon

Court of Appeals: Extension or Revival Requires Written Promise from Debtor Rather Than Mere Acknowledgement

A recurring issue in New York mortgage lending is under what circumstances the state's six-year statute of limitations on mortgage debts is extended or revived. The New York Court of Appeals ruled recently that this issue is governed by General Obligations Law (GOL) Section 17-105, which requires a written promise signed by the debtor to toll or revive a mortgage debt, rather than by the more general provision, GOL Section 17-101, which provides that a written acknowledgement of a debt is sufficient to revive other forms of debt. Batavia Townhouses, Ltd. v. Council of Churches Housing Dev. Fund Co., Inc., --- N.E.3d ----, 2022 WL 1631492 (N.Y. May 24, 2022).

Over the years, some New York courts have mistakenly applied GOL Section 17-101 to mortgage debts. The Court of Appeals, in a prior decision, had analyzed a mortgage debt under both provisions. Petito v. Piffath, 85 N.Y.2d 1 (1994). In its new decision, the Court of Appeals noted that Petito had not considered the...