Legal Question in Real Estate Law in New York
Re: 15-year Mortgage Note for a small NY commercial property:
Mortgage Note term ended July 2009: last and final paymnt is not being accepted because Mortgagee claims that unpaid late fees are also owed for all payments made after the 15 day grace period, during the 15-yr Term of the Mortgage Note.
Mortgagor says for 15 years late fees were never charged/collected and they were never notified that any late fees were owed and thus refuses to pay the fees.
Mortgage Note has a Late Fee clause - says if payments are made after 15days, an add'l charge will be due the Mortgagee - a 5% late fee, with no stipulation for Mortgagee to send written notice.
Approx. 30% of payments were late. Payments approx $3300/mo - 5% late fee.
Mortgagee refuses to sign Mortgage Satisfaction.
Mortgagor threatening to take them to court & sue for Atty fees.
Questions:
Is Mortgagee still entitled to collect/demand payment of late fees or is it too late?
Is there a NY statute of limitations (regarding late fee debt) that applies here?
Is there any other interest due on the unpaid late fees?
Thank you very much!
1 Answer from Attorneys
Without any research on this issue, this is my opinion:
1. A six (6) year statute of limitations period applies. Therefore, bank would not be able to seek late fees after six years.
2. You may have a defense and the bank may be equitably estopped from arguing the late fees since it has been accepting late payment each month for 15 years without giving notice that payments were late.
3. You should demand in writing the Mortgage Satisfaction document. If the bank refuses to supply after written demand, you would have to right to file an action for declaratory judgment that the mortgage is satisfied.
Mike.
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