Update: New York Vet Clinic Bill Amended to Add Proposed Ban on Negative Use Restrictions

New York State Assembly Bill (AB) 9042, originally introduced on September 5, 2025, was recommitted and amended on October 21, 2026. The amendment adds a provision that would render void and unenforceable, as against public policy, any private agreement imposing a "negative use restriction" that prohibits or restricts the use of real property as a veterinary clinic where that use would otherwise be permitted under applicable law.

The bill broadly defines a "negative use restriction" to include any covenant, condition or restriction concerning the use of real property, whether contained in a lease, deed, restrictive covenant or any other legal instrument. In addition, the beneficiary of a negative use restriction created on or after the bill's effective date would be required to release the restriction. It is unclear whether the bill would void existing deed restrictions and lease covenants or only those entered into after its effective date.

The sponsor's memo describes the new provision as intended to prevent a "private equity company from including any language that restricts the use of property for a vet clinic." In practical terms, the provision, which is not limited to private equity, would function similar to a ban on noncompete agreements tied to real property rather than the individual practitioners who own or lease the property.

If enacted, the law would prevent parties from using deed restrictions or lease covenants to prevent competing clinics from opening at a location where a clinic has been sold or closed. Those parties may include buyers, landlords and clinic operators seeking to close a particular location for consolidation or other business purposes.

What's Also in the Bill

As discussed in more detail in a 2025 blog when the bill was first introduced, AB 9042 would add a new Article 26-D to the Agriculture and Markets Law. Article 26-D would require acquirers of veterinary clinics, including management services organizations providing all or substantially all of the administrative or management services under contract with such clinics, to notify the Department of Agriculture and Markets of "material change" transactions, including a merger, acquisition or contract affiliation valued at $200,000 or more, no later than 14 days after signing and prior to closing. The bill would also empower the New York Attorney General to bring an action to block material change transactions it deems contrary to the public interest.

Holland & Knight attorneys will continue to monitor developments concerning AB 9042 and other legislation affecting the veterinary industry.

For more information or questions, please contact the author.