New York · owner financing
New York owner financing, explained.
A plain-English guide to owner financing (also called seller financing) in New York — statute, recording, default remedies, interest caps, and where deals actually happen.
N.Y. Real Property Law (RPL) § 294 (recording of executory contracts); General Obligations Law § 5-705 (statute of frauds); RPAPL Art. 13 governs foreclosure if recharacterized
RPL § 294 permits recording of executory contracts in the county clerk's office where the land lies; no fixed deadline but recording is required for constructive notice. Recording fees vary by county; NYC adds RPT and ACRIS filing.
Foreclosure-style. After Bean v. Walker, when buyer has built up equity, seller must foreclose under RPAPL Art. 13 with statutory redemption rights; pure forfeiture clauses are routinely struck down.
Is owner financing legal in New York?
Recognized at common law and treated as 'executory contracts for the sale of real property.' New York courts generally treat installment land contracts as equitable mortgages, requiring foreclosure rather than forfeiture (Bean v. Walker, 95 A.D.2d 70 (4th Dep't 1983)).
How do you record a owner financing agreement in New York?
RPL § 294 permits recording of executory contracts in the county clerk's office where the land lies; no fixed deadline but recording is required for constructive notice. Recording fees vary by county; NYC adds RPT and ACRIS filing.
What happens if the buyer defaults?
Foreclosure-style. After Bean v. Walker, when buyer has built up equity, seller must foreclose under RPAPL Art. 13 with statutory redemption rights; pure forfeiture clauses are routinely struck down.
What is the maximum interest rate?
Civil usury cap: 16% per annum (Gen. Oblig. Law § 5-501; Banking Law § 14-a). Criminal usury: 25% (Penal Law § 190.40). Loans over $250,000 secured by other than 1-2 family owner-occupied are exempt from civil usury.
What disclosures are required?
Property Condition Disclosure Statement (RPL § 462) for 1-4 family residential; lead-paint federal disclosure; HOA/condo disclosures where applicable. No installment-contract-specific statutory disclosure form, but full disclosure of senior liens is required as a matter of common-law fraud avoidance.
Who's protected — buyer vs. seller
Buyer protections
Equitable-mortgage doctrine; right to cure; equitable redemption; statutory protection against unconscionable forfeiture; broker disclosure rules.
Seller protections
Acceleration and judicial foreclosure remedies; specific performance; right to retain payments as liquidated damages where reasonable.
Where in the state do these deals happen?
Upstate rural parcels, vacation properties in the Catskills/Adirondacks, distressed-property transfers, intra-family transfers. Rare in NYC residential.
New York cities
Per-city market notes for owner financing buyers and sellers.
Notable case law
Bean v. Walker, 95 A.D.2d 70 (4th Dep't 1983); Heritage Art Galleries v. Raia, 173 A.D.2d 441 (2d Dep't 1991).
Looking at a New York deal?
Send the parcel and the terms — we'll walk through whether owner financing fits, how to record it, and what the cure period looks like if things go sideways.
Talk to WyattEducational content only. Statute citations are public-record research, not legal advice. New York contracts and remedies are fact-specific — consult a licensed New York real-estate attorney before signing anything.