Bill Text: NY A09326 | 2023-2024 | General Assembly | Introduced

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Bill Title: Requires municipal tax collectors to hold a hearing after a tax lien sale to distribute funds to the former owner of such property.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-02-29 - referred to real property taxation [A09326 Detail]

Download: New_York-2023-A09326-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          9326

                   IN ASSEMBLY

                                    February 29, 2024
                                       ___________

        Introduced by M. of A. ZINERMAN -- read once and referred to the Commit-
          tee on Real Property Taxation

        AN ACT to amend the real property tax law, in relation to procedures for
          the foreclosure of tax lien proceedings

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. Section 1166 of the real property tax law,  as  amended  by
     2  chapter  532 of the laws of 1994 and subdivision 1 as amended by chapter
     3  500 of the laws of 2015, is amended to read as follows:
     4    § 1166. Real property acquired by tax district; right  of  sale.    1.
     5  Whenever  any  tax  district  shall become vested with the title to real
     6  property by virtue of a foreclosure proceeding brought pursuant  to  the
     7  provisions  of  this  article, such tax district is hereby authorized to
     8  sell and convey the real property so acquired at public auction  to  the
     9  highest  bidder,  which  shall  include  any and all gas, oil or mineral
    10  rights associated with such  real  property,  [either  with  or  without
    11  advertising  for  bids,]  notwithstanding the provisions of any general,
    12  special or local law.
    13    2. [No such sale shall be effective unless and until such  sale  shall
    14  have  been  approved  and  confirmed by a majority vote of the governing
    15  body of the tax district, except that no such approval shall be required
    16  when the property is sold at public auction to the highest bidder.]  (a)
    17  Notice  of such sale shall be given by the officer making it by publish-
    18  ing a notice of the time and place of the sale, containing a description
    19  of the property to be sold, in a newspaper published in  the  county  in
    20  which  the  property  is  located,  or, if there is none, in a newspaper
    21  published in an adjoining county, unless the property is situated wholly
    22  or partly in a city, or in an incorporated village  in  which  a  daily,
    23  semi-weekly  or tri-weekly newspaper is published, and, in that case, by
    24  publishing notice of the sale in such a daily, semi-weekly or tri-weekly
    25  paper, except that where such real property is located in a county with-
    26  in the city of New York such publication shall be in a  daily  newspaper
    27  published  within  such county, or in a weekly paper published in a city
    28  or in such incorporated village. If the property be situated in a  city,

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11294-01-3
        A. 9326                             2

     1  or  a  village  in which no newspaper is published daily, semi-weekly or
     2  tri-weekly, and there be an adjoining city or village  in  the  same  or
     3  another  county, in which a newspaper is published daily, semi-weekly or
     4  tri-weekly,  such  notice may be published in such daily, semi-weekly or
     5  tri-weekly newspaper of the latter city or village or in a weekly  news-
     6  paper of such city. In each case, publication may be either once in each
     7  week  for four successive weeks or at least twice in each week for three
     8  successive weeks preceding the original date fixed for the sale. If  the
     9  publication is for three weeks, such sale shall take place on any day on
    10  or  after  the  twenty-first  day and on or before the twenty-eighth day
    11  after the day of the first publication; and if the  publication  is  for
    12  four  weeks  such sale shall take place on any day on or after the twen-
    13  ty-eighth day and on or before the thirty-fifth day after the day of the
    14  first publication. Any period of seven successive days shall  constitute
    15  a week under this section.
    16    (b)  Where the property is situated wholly outside a city or an incor-
    17  porated village referred to in paragraph (a) of this subdivision, notice
    18  of such sale shall also be given by posting a copy of the notice of sale
    19  at least twenty-eight days preceding the original  date  fixed  for  the
    20  sale  in  three  public  places  in  the  town  in which the property is
    21  located, and, if the sale is to be held in another town or in a city, in
    22  three public places therein.
    23    (c) If the officer appointed to make such sale does not appear at  the
    24  time  and  place  where such sale has been advertised to take place, the
    25  attorney for the plaintiff may postpone or  adjourn  such  sale  not  to
    26  exceed  four weeks, during which time such attorney may make application
    27  to the court to have another person appointed to make such sale.  Notice
    28  of postponement of the sale shall be posted at least three days prior to
    29  the  postponed  date  in  the same places as the original notice of sale
    30  when posting of the notice of sale is required, and shall  be  published
    31  once at least three days prior to the postponed date in the newspaper in
    32  which the notice of sale was originally published.
    33    (d) The terms of the sale shall be made known at the sale.
    34    (e)  If the property consists of two or more distinct buildings, farms
    35  or lots, they shall be sold separately, unless otherwise ordered by  the
    36  court;  but  where  two  or more buildings are situated in the same city
    37  lot, they shall be sold together.
    38    (f) At any time within one year after the sale,  but  not  thereafter,
    39  the  court,  upon  such terms as may be just, may set the sale aside for
    40  failure to comply with the provisions of this section as to the  notice,
    41  time or manner of such sale if a substantial right of a party was preju-
    42  diced by the defect.
    43    3. After the sale pursuant to this section, all surplus moneys arising
    44  from  the  sale  shall  be paid into court by the officer conducting the
    45  sale within five days after the same shall be received.
    46    4. (a) Within thirty days after completing the sale and executing  the
    47  proper  conveyance to the purchaser, unless such time be extended by the
    48  court within said thirty days, the officer making the  sale  shall  file
    49  with  the  clerk  his or her report under oath of the disposition of the
    50  proceeds of the sale, accompanied by the vouchers of the persons to whom
    51  payments were made.
    52    (b)  A motion to confirm such report of sale shall not be made  within
    53  three  months  after  the filing of the report and shall in any event be
    54  made not later than four months after the filing of such report,  except
    55  that  if  there  be no surplus moneys arising from the sale of the mort-
    56  gaged premises under such judgment, an application for  confirmation  of
        A. 9326                             3

     1  the  report  of sale may be made at any time after the report shall have
     2  been filed eight days. Where the report of  sale  shows  surplus  money,
     3  such  report must include the amount of surplus and instructions for how
     4  interested  parties  may  apply  to  claim  an interest for such surplus
     5  pursuant to subdivision five of this section.
     6    (c) Such report required pursuant to this subdivision shall be  posted
     7  publicly  in  accordance  with  the provisions of section eleven hundred
     8  twenty-four of this article.
     9    (d) Personal notice of the sale of property pursuant to  this  section
    10  shall be administered in accordance with the provisions of section elev-
    11  en hundred twenty-five of this article.
    12    5. (a) Any person claiming the surplus moneys arising upon the sale of
    13  premises pursuant to this section, or any part thereof, either in his or
    14  her  own name, or by his or her attorney, at any time before the confir-
    15  mation of the report of sale, may file with the clerk  in  whose  office
    16  the report of sale is filed, a written notice of such claim, stating the
    17  nature  and  extent  of  his  or her claim and the address of himself or
    18  herself or his or her attorney.
    19    (b) On the motion for confirmation, or at any time within three months
    20  thereafter, on notice to all parties who have appeared in the action  or
    21  filed  claims,  on  motion of any party to the action, or any person who
    22  has filed a notice of claim on the surplus moneys, the court, by  refer-
    23  ence  or  otherwise, shall ascertain and report the amount due to him or
    24  any other person who has a lien on such surplus moneys, and the priority
    25  of the several liens thereon and order distribution of surplus moneys.
    26    (c) The owner of the equity  of  redemption,  or  any  party  who  has
    27  appeared  in the action or any person who files a notice of claim or who
    28  has a recorded lien against the property shall be given notice  by  mail
    29  or in such other manner as the court shall direct, to attend any hearing
    30  on disposition of surplus money.
    31    6.  Whenever  any  tax  district shall become vested with the title to
    32  real property by virtue of a foreclosure proceeding brought pursuant  to
    33  the  provisions  of this article, such tax district is hereby authorized
    34  to keep the real property so acquired for such tax  district's  use.  In
    35  such  case, a valuation proceeding shall be commenced in accordance with
    36  article five of the eminent domain procedure law. Once  a  determination
    37  of the property's fair market value has been made, the court shall order
    38  the  tax  district  to  pay just compensation to the owners of the fore-
    39  closed property, representing  the  difference  between  the  property's
    40  value and the total tax debt owed.
    41    §  2. Paragraph (d) of subdivision 2 and subdivision 3 of section 1136
    42  of the real property tax law, as amended by chapter 532 of the  laws  of
    43  1994, are amended to read as follows:
    44    (d)  In  directing  any  conveyance  pursuant to this subdivision, the
    45  judgment shall direct the enforcing  officer  of  the  tax  district  to
    46  prepare  and  execute a deed conveying title to the parcel or parcels of
    47  real property concerned. Such title shall be full and  complete  in  the
    48  absence of an agreement between tax districts as herein provided that it
    49  shall be subject to the tax liens of one or more tax districts. Upon the
    50  execution  of such deed, the grantee shall be seized of an estate in fee
    51  simple absolute in such parcel unless the conveyance is  expressly  made
    52  subject  to  tax  liens  of  a tax district as herein provided[, and all
    53  persons, including the state, infants, incompetents, absentees and  non-
    54  residents,  who  may have had any right, title, interest, claim, lien or
    55  equity of redemption in or upon such parcel, shall be barred and forever
        A. 9326                             4

     1  foreclosed of all such right, title, interest, claim, lien or equity  of
     2  redemption].
     3    3.  When  no  answer has been interposed. The court shall make a final
     4  judgment awarding to such tax district the possession of any  parcel  of
     5  real  property  described in the petition of foreclosure not redeemed as
     6  provided in this title and as  to  which  no  answer  is  interposed  as
     7  provided  herein.  In  addition  thereto  such  judgment shall contain a
     8  direction to the enforcing officer  of  the  tax  district  to  prepare,
     9  execute  and  cause to be recorded a deed conveying to such tax district
    10  full and complete title to such parcel. Upon the execution of such deed,
    11  the tax district shall be seized of an estate in fee simple absolute  in
    12  such  parcel  [and  all  persons, including the state, infants, incompe-
    13  tents, absentees and non-residents who may have had  any  right,  title,
    14  interest,  claim,  lien  or  equity of redemption in or upon such parcel
    15  shall be barred and forever foreclosed of all such right, title,  inter-
    16  est, claim, lien or equity of redemption].
    17    §  3.  Subdivision 10 of section 1194 of the real property tax law, as
    18  amended by chapter 149 of the laws  of  2003,  is  amended  to  read  as
    19  follows:
    20    10.  The  conveyance made pursuant to a judgment in any action brought
    21  under this title shall vest in the purchaser [all] a proportion  of  the
    22  right,  title,  interest,  claim,  lien  and equity of redemption in and
    23  against the real property sold of all parties to the action, and of  all
    24  persons  whose  right, title, interest, claim, lien or equity of redemp-
    25  tion has accrued subsequent in time to the filing of the notice  of  the
    26  pendency of the action by assignment of an interest existing prior ther-
    27  eto  from one of the parties to the action or any or either of them. All
    28  such parties and persons shall [be barred and forever foreclosed by  the
    29  judgment  in such action of all] retain a right, title, interest, claim,
    30  lien and equity of redemption in and to the real property  sold  or  any
    31  part  thereof in proportion to the surplus equity remaining in the prop-
    32  erty after sale, except that the conveyance  shall  be  subject  to  all
    33  taxes  or  other legal charges of all tax districts which accrued subse-
    34  quent to the taxes or other legal charges which were the subject of  the
    35  action.  [Notwithstanding the provisions of subdivision two of] Proceeds
    36  of the sale shall be distributed in  accordance  with  section  thirteen
    37  hundred  fifty-four  of  the real property actions and proceedings law[,
    38  this subdivision shall prevail].
    39    § 4. Subdivision 1 and paragraph (a) of subdivision 2 of section  1112
    40  of  the  real property tax law, as amended by chapter 532 of the laws of
    41  1994, are amended to read as follows:
    42    1.  When a tax district holds more than one tax lien against a parcel,
    43  the liens need not be redeemed simultaneously. However, the liens [must]
    44  shall be redeemed in [reverse] chronological order,  so  that  the  lien
    45  with  the  [most  recent]  earliest lien date is redeemed first, and the
    46  lien with the  [earliest]  most  recent  lien  date  is  redeemed  last.
    47  Notwithstanding  the  redemption  of  one or more of the liens against a
    48  parcel as provided herein, the enforcement process shall proceed accord-
    49  ing to the provisions of this article as long  as  the  [earliest]  most
    50  recent lien remains unredeemed.
    51    (a)  When  one or more liens against a parcel are redeemed as provided
    52  herein, but the [earliest] most  recent  lien  remains  unredeemed,  the
    53  receipt  issued  to  the  person  redeeming shall include a statement in
    54  substantially the following form:  "This parcel remains subject  to  one
    55  or  more  delinquent tax liens. The payment you have made will not post-
        A. 9326                             5

     1  pone the enforcement of the outstanding lien or liens. Continued failure
     2  to pay the entire amount owed will result in the loss of the property."
     3    §  5. Paragraph (b) of subdivision 1 of section 1125 of the real prop-
     4  erty tax law, as added by chapter 415 of the laws of 2006  and  subpara-
     5  graph  (i)  as amended by chapter 275 of the laws of 2009, is amended to
     6  read as follows:
     7    (b) Notification method. (i) In the case of an  owner,  the  enforcing
     8  officer shall cause a copy of such notice to be posted as provided here-
     9  in on the property to which the delinquent tax lien relates; in the case
    10  of  a non-owner, the enforcing officer shall cause a copy of such notice
    11  to be posted in his or her office and in the office of the clerk of  the
    12  court in which the petition of foreclosure has been filed. Notwithstand-
    13  ing  any provision of law to the contrary, the party to whom such notice
    14  is directed may redeem the parcel in question or serve a  duly  verified
    15  answer  to  the  petition  of foreclosure until either the thirtieth day
    16  after such posting or delivery, or the date specified by the  notice  of
    17  foreclosure as the last day for redemption, whichever is later.
    18    (ii)  Such notice shall also be sent to each such party both by certi-
    19  fied mail and ordinary first class mail, subject to  the  provisions  of
    20  subparagraph (iv) of this paragraph. The notice shall be deemed received
    21  unless  both  the certified mailing and the ordinary first class mailing
    22  are returned by the United States postal service within forty-five  days
    23  after  being  mailed. In that event, the enforcing officer or his or her
    24  agent shall attempt to obtain an alternative mailing  address  from  the
    25  United  States postal service. When notice is required to be sent to the
    26  commissioner of taxation and finance, an alternative notice may be  used
    27  by  the enforcing officer, in accordance with instructions prescribed by
    28  the commissioner of taxation and finance.
    29    [(ii)] (iii) If an alternative mailing address is found, the enforcing
    30  officer shall cause the notice to  be  mailed  to  such  owner  at  such
    31  address  both  by  certified  mail  and  by  ordinary  first class mail.
    32  Notwithstanding any provision of law to the  contrary,  such  owner  may
    33  redeem  the  parcel  in  question or serve a duly verified answer to the
    34  petition of foreclosure until either the thirtieth day after such  mail-
    35  ing,  or the date specified by the notice of foreclosure as the last day
    36  for redemption, whichever is later.
    37    [(iii) If no alternative mailing address can be  found,  then  in  the
    38  case  of  an  owner,  the  enforcing  officer shall cause a copy of such
    39  notice to be posted as provided herein on  the  property  to  which  the
    40  delinquent  tax  lien relates; in the case of a non-owner, the enforcing
    41  officer shall cause a copy of such notice to be posted  in  his  or  her
    42  office and in the office of the clerk of the court in which the petition
    43  of  foreclosure  has been filed. Notwithstanding any provision of law to
    44  the contrary, the party to whom such notice is directed may  redeem  the
    45  parcel  in  question  or serve a duly verified answer to the petition of
    46  foreclosure until either the thirtieth day after such posting or  deliv-
    47  ery,  or the date specified by the notice of foreclosure as the last day
    48  for redemption, whichever is later.]
    49    (iv) Where an owner is listed as "unknown" on the  tax  roll  and  the
    50  name  of  such  owner  cannot  be found in the public record, the notice
    51  shall be mailed to the property address by  ordinary  first  class  mail
    52  addressed  to "occupant" and a copy thereof shall be posted on the prop-
    53  erty to which the tax lien relates.
    54    § 6. Subdivision 3 of section 1180 of the real property  tax  law,  as
    55  amended  by  chapter  579  of  the  laws  of 1995, is amended to read as
    56  follows:
        A. 9326                             6

     1    3. If such lands are not redeemed, every person despoiling such  lands
     2  or  interested  in  making  such  despoliation  upon whom service of the
     3  notice has been made, shall be liable to pay to  the  tax  district  the
     4  [full]  differential  value  [of]  between  that  total tax debt and the
     5  market  value of the property at the time of foreclosure attributable to
     6  any buildings, timber or other products  cut  or  destroyed  or  removed
     7  therefrom,  from  the date of the filing of the list of delinquent taxes
     8  to the termination of such action or proceeding, and may  be  restrained
     9  by  injunction from committing any waste thereon. Where the value of the
    10  property at the time of foreclosure exceeds the amount of the total  tax
    11  debt,  there  shall  be  no liability for despoliation. The value of the
    12  property at the time of foreclosure may be measured by either the amount
    13  generated by sale of the property at public auction, in accordance  with
    14  section  eleven  hundred  sixty-six  of  this  title,  or  by  valuation
    15  proceedings in accordance with article five of the eminent domain proce-
    16  dure law.
    17    § 7. This act shall take effect on the sixtieth  day  after  it  shall
    18  have become a law. Effective immediately, the addition, amendment and/or
    19  repeal  of  any  rule  or regulation necessary for the implementation of
    20  this act on its effective date are authorized to be made  and  completed
    21  on or before such effective date.