Page 6 - Commercial Litigation

S6 | MONDAY, AUGUST 8, 2016 | Commercial Litigation | NYLJ.COM

YLJ
K; N
TOC
iS

NY’s Statute of Limitations and Mortgage

Foreclosures:
How to Revoke Acceleration

grappling with how to turn back the clock cerns the payment of money owed pursuant mortgagee could sue on any of the defaulted
on the statute of the limitations. This article to the contract, the cause of action accrues monthly installments and would have six
BY LAURA M. GRECO
AND MITRA P. SINGH
discusses one such method of effectively when the claimant possesses a legal right to years from each default to commence suit
Textending the ability of a lender to foreclose demand payment.3
on the individual installment.
he statute of limitations for mortgage on a mortgage whose statute of limitations Mortgage foreclosures, just like any other
However, as a practical matter, following
foreclosures had never, in the past, been for enforcement looms near—revocation of contract in New York, are also governed by a
a default, a lender usually accelerates the
subject to much thought, as it was rarely acceleration—and the legal uncertainty of 4
six-year statute of limitations. Because of the
mortgage debt and declares all sums due and
successfully invoked. However, a conluence such revocation of acceleration.
nature of mortgage agreements, speciically owing. Acceleration of the debt allows the
of events—the “Great Recession,” new court Statute of Limitations for Mor tgage a mortgagor’s obligation to make payments mortgagee to demand the total amount owed
requirements, lengthy court delays, and new Foreclosures. Under New York law, the statute on a monthly basis, the six-year statute of pursuant to the mortgage. Without accelera-

regulatory requirements—has made the stat- of limitations for commencement of an action limitations applies to each monthly install- tion, the mortgagee’s demand is limited to the
ute of limitations suddenly important. More based on the breach of a contract is six years.1 ment. A separate cause of action accrues for
critically, mortgage lenders and servicers that The statute of limitations does not start until each month that goes unpaid, and the statute
have commenced a mortgage foreclosure the cause of action accrues and, with respect of limitations for these separate causes of LAURA M. GRECO is of counsel at McGlinchey Staford
action, and have discovered that they need to contracts, the cause of action accrues at action begins to run from the due date of in Albany. MITRA P. SINGH is an associate in the irm’s
to recommence a new foreclosure action, are
the time of the breach.2 Where the claim con-
each monthly installment.5 This means that a
New York City oice.