New York has enacted Real Property Law § 327-a, effective June 3, 2026, which imposes new obligations on sellers, common interest communities and property owners to address historical discriminatory restrictive covenants in recorded documents. These covenants, which may be found in older deeds, declarations or subdivision documents, purport to restrict ownership or occupancy based on protected characteristics such as race, religion or national origin.
Although such provisions are unenforceable under federal and state law, the statute reflects a shift toward mandatory removal, through formal modification, from the public record.
Key Requirements for Sellers
When selling real property, a seller must:
- Remove unlawful discriminatory covenants: If a recorded document affecting the property contains discriminatory restrictions, the seller must submit a “restrictive covenant modification document” to strike the offending language. This may be filed with the deed or separately.
- Provide notice to the purchaser: The seller must deliver a copy of the modification document to the purchaser or title insurance applicant before, or at, closing.
- Record the modification document: The modification must be recorded, although no recording fee is required.
Requirements for Condominiums, Cooperatives and HOAs
Within one year of the effective date, governing bodies of condominiums, cooperative apartment corporations and homeowners’ associations must remove or amend discriminatory covenants in governing documents. Importantly, these amendments do not require approval of unit owners or members.
Mechanism for Removing Discriminatory Language
The statute introduces a standardized process:
- Counties must provide forms for a “restrictive covenant modification document.”
- The document must reference the original recorded instrument by book/page or instrument number, include a full copy of the original document and show the offending language stricken.
- Once recorded, the modification is deemed to replace the unlawful restriction in the chain of title.
Authorized Parties to Record a Modification
In addition to sellers, any property owner who believes their property is subject to an unlawful covenant may independently record a modification document. However, the person recording bears sole liability for improper or unauthorized filings, and county recorders are expressly shielded from liability for recording such documents.
Practical Considerations
Real Property Law § 327-a adds practical compliance steps to New York real estate transactions by requiring parties to identify and formally remove unlawful discriminatory restrictive covenants from the public record. As of the date of this legal alert, no guidance exists for failure of a seller to comply with the provisions of this statute.
Practitioners and market participants should consider the following:
- Enhanced Review of Recorded Documents: Title reports, deeds, declarations and other recorded instruments should be reviewed to identify any unlawful discriminatory language, particularly in older subdivision restrictions or legacy covenants.
- Integration into Closing Checklists: Counsel should build § 327-a compliance into standard closing workflows so any required modification document is identified, prepared, delivered and recorded without delaying closing.
- Coordination with Title Companies: Early coordination with title companies may help confirm whether a modification document will be expected as part of the transaction and avoid last-minute closing issues.
- Common Interest Community Compliance: Boards of condominiums, cooperatives, and homeowners’ associations should begin reviewing governing documents now to identify and remove prohibited language within the statutory one-year period.
- Risk Management for Property Owners: Because an owner who records a modification document independently remains responsible for any improper filing, legal review may help reduce the risk of unintended title issues.
Law Clerk Zachary T. Norton contributed to this report.
If you have questions or need assistance with recording modification documents, please contact a member of our Commercial Real Estate Practice Group, including attorney Charles (Chip) W. Russell at (585) 419-8635 and crussell@harrisbeachmurtha.com; attorney Melanie C. Marotto at (716) 200-5230 and mmarotto@harrisbeachmurtha.com; attorney Aurora Mali Perry at (716) 200-5124 and aperry@harrisbeachmurtha.com; attorney Molly A. Sleiman at (716) 200-5115 and msleiman@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert is not a substitute for advice of counsel on specific legal issues.
Harris Beach Murtha’s lawyers and consultants practice from offices throughout Connecticut in Bantam, Hartford, New Haven and Stamford; New York State in Albany, Binghamton, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Long Island and White Plains; as well as in Boston, Massachusetts, and Newark, New Jersey.