Cal. Civ. Code § 302-B
Removal of violations by mortgagees
Operative Text
§ 302-b. Removal of violations by mortgagees. 1. Notwithstanding any other provision of law, where a receiver has been appointed in foreclosure proceedings instituted by a mortgagee with respect to any multiple dwelling, such mortgagee may advance to such receiver funds necessary for the operation of such multiple dwelling and for the making of repairs therein necessary to remove conditions constituting violations of this chapter. Such receiver shall, to the extent possible, repay any and all such advances from income received by him with respect to the property and, if such income is insufficient to permit complete repayment of such advances, any amounts which cannot be so repaid, with interest, shall be added to the amount of the lien of such mortgagee upon entry of a foreclosure judgment, provided, however, that such amounts shall not be the basis for any additional personal liability on the part of the mortgagor. 2. Notwithstanding any other provisions of law, a mortgagee advancing funds to a receiver pursuant to subdivision one of this section shall be liable only for gross and willful negligence with respect to any repair made at his direction and with funds so advanced.
N.Y. Mult. Dwell. Law § 302-B establishes a mechanism by which a mortgagee — typically a lender — may voluntarily provide funds to a court-appointed receiver during foreclosure proceedings on a multiple dwelling, specifically to cover operating costs and repairs needed to clear code violations under the Multiple Dwelling Law. The receiver is expected to repay those advances from property income when possible, and any unpaid balance, with interest, gets folded into the mortgagee's foreclosure lien rather than becoming a personal debt of the borrower. The statute also limits the mortgagee's exposure for repair-related harm, making them responsible only when their conduct rises to the level of gross and willful negligence.
Plain English — not legal advice.
Lenders and their counsel working through foreclosure on a multiple dwelling in New York should be aware that § 302-B provides a defined pathway for advancing funds to a receiver to address Multiple Dwelling Law violations without those advances creating new personal liability for the mortgagor. Compliant operators in this context typically document all advances carefully, coordinate with the receiver on the scope of repairs, and understand that unrecovered advances are added to the foreclosure lien upon judgment. Because the statute limits liability for repair work to gross and willful negligence, mortgagees generally ensure that any repairs directed with advanced funds are carried out with reasonable oversight and care.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For tenants living in a multiple dwelling that is in foreclosure, N.Y. Mult. Dwell. Law § 302-B is relevant because it authorizes the court-appointed receiver to receive lender funds specifically earmarked for building operations and for fixing conditions that constitute code violations. This means the existence of a foreclosure proceeding does not necessarily eliminate the legal obligation to address housing violations, and tenants retain rights under the Multiple Dwelling Law regardless of the building's financial situation. Tenants who believe violations are going unaddressed may consider documenting conditions, contacting the local housing or building department, or reaching out to a tenant-rights organization familiar with § 302-B and related provisions.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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