Bill S2993-2013

Relates to establishing a new classification for properties held in condominium and cooperative form for assessment purposes

Relates to establishing a new classification for properties held in condominium and cooperative form for assessment purposes.

Details

Actions

  • Jan 8, 2014: REFERRED TO CITIES
  • Jan 28, 2013: REFERRED TO CITIES

Memo

BILL NUMBER:S2993

TITLE OF BILL: An act to amend the real property tax law, the administrative code of the city of New York and the New York city charter, in relation to establishing a new classification of properties for properties held in condominium and cooperative form for assessment purposes

SUMMARY OF PROVISIONS: Section 1 of the bill redefines class 2 and adds a new class 5. The bill amends the class 2 definition to consist only of residential properties held in cooperative or condominium form of ownership. Class 5 is added, which consists of all residential property that is not classified as class 1 or class 2.

Section 2 extends assessment caps of 8 percent in any one year and 30 percent in any five years to all class 2 properties. This section also imposes such caps on class 5 properties with less than 11 residential units.

Sections 3 to 24 make conforming changes through various consolidated laws, the administrative code of the City of new York and the new York City Charter to accommodate properties now designated as class 5.

Section 25 provides that the act takes effect on the first January next succeeding the date on which it shall become a law and shall apply to assessment rolls prepared occurring after such date.

JUSTIFICATION: This bill extends to all co-ops and condos the caps on property tax assessments currently enjoyed by co-ops and condos with 10 units or less. Currently, co-ops and condos with more than 10 units have changes in market value phased into assessed value over 5 years. While this provides some modicum of protection, recent valuations changes have shown that it is not enough. With the implementation of this bill, all co-ops and condos will see the growth in the their assessments capped at 8 percent in any one year, and 30 percent in any 5 years (8/30 cap).

By providing assessment caps, this bill would bring co-ops and condos a step closer towards equity in taxation with class 1 (1 to 3 family) properties which already enjoy assessment caps.

Section 581 of the New York State Real Property Tax Law requires that co-ops and condos be valued as if they were rental apartments and this further complicated the already complex requirement of mass appraisals of all property in New York City. As a result, there are times, such as Fiscal Year 2012, where assessment for co-ops and condos can jump dramatically to reflect corrections and updated data.

Under the current class share system of tax rates used in New York City, each class has its own tax rate. These rates are mostly a function of the overall tax rate and the relationship between each class's market and assessed value growth rates. Basically, this means that having two large groups in the same class but with different assessment growth controls raises the risk that the tax burden will shift from one group to another. The separating of the two groups with

the new class 5 takes advantage of the class share system to avoid that potential problem.

Accordingly, this bill also moves all residential properties not classified as class 1 or 2 (i.e., rental properties) into a new class 5, making class 2 just residential co-ops and condos. This is done to prevent any distortions in the tax rate that can be caused by extending the 8/30 caps to the co-ops and condos but not the rentals.

The bill also updates the legal structures of various tax programs and initiatives to reflect the new classifications of property. Properties in classes 1, 3, and 4 would be unaffected by this bill.

PRIOR LEGISLATIVE HISTORY: New bill in 2012.

FISCAL IMPACT: On average, the fiscal impact for New York City is expected to be minimal. As the legislation changes the way assessment growth of co-ops and condos is calculated, the revenue growth pattern will look different going forward. In some years, the bill will be revenue positive, but this will be balanced by other years where it will be revenue negative. In the near term, the bill is more likely to be revenue positive.

This bill will have no fiscal impact at the State level.

EFFECTIVE DATE: First January next succeeding the date on which the bill is passed and shall apply to assessment rolls prepared after that date.


Text

STATE OF NEW YORK ________________________________________________________________________ 2993 2013-2014 Regular Sessions IN SENATE January 28, 2013 ___________
Introduced by Sen. STAVISKY -- read twice and ordered printed, and when printed to be committed to the Committee on Cities AN ACT to amend the real property tax law, the administrative code of the city of New York and the New York city charter, in relation to establishing a new classification of properties for properties held in condominium and cooperative form for assessment purposes THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 1802 of the real property tax law, as separately amended by chapters 123 and 529 of the laws of 1990, para- graph class one as amended by chapter 332 of the laws of 2008, is amended to read as follows: 1. All real property, for the purposes of this article, in a special assessing unit shall be classified as follows: Class one: (a) all one, two and three family residential real proper- ty, including such dwellings used in part for nonresidential purposes but which are used primarily for residential purposes, except such property held in cooperative or condominium forms of ownership other than (i) property defined in subparagraphs (b) and (c) of this paragraph and (ii) property which contains no more than three dwelling units held in condominium form of ownership and which was classified within this class on a previ- ous assessment roll; and provided that, notwithstanding the provisions of paragraph (g) of subdivision twelve of section one hundred two of this chapter, a mobile home or a trailer shall not be classified within this class unless it is owner-occupied and separately assessed; and (b) residential real property not more than three stories in height held in condominium form of ownership, provided that no dwelling unit therein previously was on an assessment roll as a dwelling unit in other than condomin- ium form of ownership; and (c) residential real property
consisting of one family house structures owned by the occupant, situated on land held in cooperative ownership by owner occupi- ers, provided that; (i) such house structures and land consti- tuted bungalow colonies in existence prior to nineteen hundred forty; and (ii) the land is held in cooperative ownership for the sole purpose of maintaining one family residences for members own use; and (d) all vacant land located within a special assessing unit which is a city (i) other than such land in the borough of Manhattan, provided that any such vacant land which is not zoned residential must be situated immediately adjacent to property improved with a residential structure as defined in subparagraphs (a) and (b) of this paragraph, be owned by the same owner as such immediately adjacent residential prop- erty immediately prior to and since January 1, 1989, and have a total area not exceeding 10,000 square feet; and (ii) located in the borough of Manhattan north of or adjacent to the north side of 110th street provided such vacant land was classified within this class on the assessment roll with a taxable status date of January 5, 2008 and the owner of such land has entered into a recorded agreement with a governmental entity on or before December 31, 2008 requiring construction of housing affordable to persons or families of low income in accordance with the provisions of the private housing finance law. Notwithstanding the foregoing, such vacant land shall be classified according to its use on the assessment roll with a taxable status date imme- diately following commencement of construction, provided further, that construction pursuant to an approved plan for affordable housing shall commence no later than December 31, 2010; and (e) all vacant land located within a special assessing unit which is not a city, provided that such vacant land which is not zoned residential must be situated immediately adjacent to real property defined in subparagraph (a), (b) or (c) of this paragraph and be owned by the same person or persons who own the real property defined in such subparagraph immediately prior to and since January 1, 2003; Class two: [all other] residential real property HELD IN COOPERATIVE OR CONDOMINIUM FORM OF OWNERSHIP which is not designated as class one[, except hotels and motels and other similar commer- cial property]; Class three: utility real property and property subject to former section four hundred seventy of this chapter; Class four: all other real property which is not designated as class one, class two, [or] class three[.], OR CLASS FIVE; CLASS FIVE: ALL OTHER RESIDENTIAL REAL PROPERTY WHICH IS NOT DESIG- NATED AS CLASS ONE, EXCEPT HOTELS AND MOTELS AND OTHER SIMILAR COMMERCIAL PROPERTY, OR CLASS TWO. S 2. The opening paragraph of subdivision 2 of section 1805 of the real property tax law, as amended by chapter 586 of the laws of 1992, is amended to read as follows: The assessment roll of a special assessing unit wholly contained with- in a city shall identify those parcels classified in class two OR CLASS FIVE which have fewer than eleven residential units. The assessor of any such special assessing unit shall not increase the assessment of any parcel so identified in any one year, as measured from the actual assessment on the previous year's assessment roll, by more than eight percent and shall not increase such assessment by more than thirty
percent in any five-year period. The first such five-year period shall be measured from the individual assessment appearing on the assessment roll completed in nineteen hundred eighty-one provided that, if such parcel would not have been subject to the provisions of this subdivision in nineteen hundred eighty-one had this subdivision then been in effect, the first such five-year period shall be measured from the first year after nineteen hundred eighty-one in which this subdivision applied to such parcel or would have applied to such parcel had this subdivision been in effect in such year. S 3. Subdivision 6 of section 1805 of the real property tax law, as added by chapter 711 of the laws of 2005, is amended to read as follows: 6. Notwithstanding any provision of law to the contrary, in any special assessing unit wholly contained within a city, beginning with the assessment roll completed in two thousand five and for each subse- quent assessment roll, the assessor shall not increase the assessment of any existing property classified in class two OR CLASS FIVE that has fewer than eleven residential units, with respect to any increase in value attributable to additions to or improvements of such property that were not reflected on the assessment roll for a previous year, by more than one-third of the amount that such assessment would increase, in the absence of this subdivision, with respect to any increase in value attributable to additions to or improvements of such property that were not reflected on the assessment roll for a previous year. Notwithstand- ing the provisions of subdivision five of this section, the remainder of the increase in value attributable to such additions or improvements that were not reflected on the assessment roll for a previous year shall be subject to the limitations on increases provided in subdivision two of this section. This subdivision shall not apply to the construction of a new building or structure. This subdivision shall not apply where, as a result of such additions to or improvements of the existing property CLASSIFIED IN CLASS FIVE, there are more than ten residential units in such property. S 4. Paragraph (f) of subdivision 1 of section 467-a of the real prop- erty tax law, as added by chapter 273 of the laws of 1996, is amended to read as follows: (f) "Property" means real property designated as class two, pursuant to section eighteen hundred two of this chapter[, held in the cooper- ative or condominium form of ownership]. S 5. Subdivision 7 of section 499-aaa of the real property tax law, as added by chapter 461 of the laws of 2008, is amended to read as follows: 7. "Eligible building" shall mean a class one, class two [or], class four OR CLASS FIVE real property, as defined in subdivision one of section eighteen hundred two of this chapter, located within a city having a population of one million or more persons. No building shall be eligible for more than one tax abatement pursuant to this title. S 6. Subdivision 7 of section 499-aaaa of the real property tax law, as added by chapter 473 of the laws of 2008, is amended to read as follows: 7. "Eligible building" shall mean a class one, class two [or], class four OR CLASS FIVE real property, as defined in subdivision one of section eighteen hundred two of this chapter, located within a city having a population of one million or more persons. No building shall be eligible for more than one tax abatement pursuant to this title. S 7. Paragraph (b) of subdivision 3 of section 522 of the real proper- ty tax law, as added by chapter 714 of the laws of 1982, is amended to read as follows:
(b) in a special assessing unit, the determination, pursuant to section eighteen hundred two of this chapter, of whether real property is included in class one, two, three [or], four OR FIVE. S 8. Subdivision 10 of section 523-b of the real property tax law, as added by chapter 593 of the laws of 1998, is amended to read as follows: 10. On or before April first, each year the commission shall mail to each applicant, who has filed an application for the correction of the assessment, a notice of the commission's determination of such appli- cant's assessment. Such notice shall also contain the statement as to the final determination of the assessment review commission, or a state- ment that the commission has not yet made a determination as to the final assessed valuation which shall be made as soon as the petitioners application is reviewed or heard. If the applicants property is a prop- erty defined in subdivision one of section eighteen hundred two of this chapter as "Class 1", the commissions determination shall contain the statement: "If you are dissatisfied with the determination of the Assessment Review Commission and you are the owner of a one, two or three family residential structure or residential real property not more than three stories in height held in condominium form of ownership, provided that no dwelling unit therein previously was on an assessment roll as a dwelling unit in other than condominium form of ownership, and you reside at such residence, you may seek judicial review of your assessment either under title one of article seven of the real property tax law or under small claims assessment review law provided by title one-A of article seven of the real property tax law." Such notice shall also state [that] the last date to file petitions for judicial review and the location where small claims assessment review petitions may be obtained. Each applicant that has filed an application of a property as defined in subdivision one of section eighteen hundred two of this chapter as "Class 2", "Class 3" [or], "Class 4" OR "CLASS 5", shall receive a notice as to the final determination of the assessment review commission or a statement that the commission has not yet made a determination as to the final assessed valuation which shall be made as soon as the peti- tioners application is reviewed or heard. Such applicants determinations shall contain the statement: "If you are dissatisfied with the determi- nation of the Assessment Review Commission you may seek judicial review of your assessment under title one of article seven of the real property tax law." Such notice shall also state the last date to file petitions for judicial review. A final determination when rendered shall contain the same statement. Failure to mail any such notice or failure of the applicant to receive the same shall not affect the validity of the assessment. S 9. Paragraph (b) of subdivision 3 of section 701 of the real proper- ty tax law, as added by chapter 714 of the laws of 1982, is amended to read as follows: (b) In a special assessing unit, the determination, pursuant to section eighteen hundred two of this chapter, of whether real property is included in class one, two, three [or], four OR FIVE. S 10. Subparagraph 2 of paragraph (a) of subdivision 3 of section 720 of the real property tax law, as amended by chapter 679 of the laws of 1986, is amended to read as follows: (2) "Major type of property" in special assessing units, for assess- ments on rolls completed after December thirty-first, nineteen hundred eighty-one, shall mean classes one, two, three [and], four AND FIVE as
defined in subdivision one of section eighteen hundred two of this chap- ter. S 11. Subdivisions e and f of section 11-208.1 of the administrative code of the city of New York, subdivision e as amended by local law number 41 of the city of New York for the year 1986 and subdivision f as amended by chapter 385 of the laws of 2006, are amended to read as follows: e. As used in this section, the term "income-producing property" means property owned for the purpose of securing an income from the property itself, but shall not include property with an assessed value of forty thousand dollars or less, or residential property containing ten or fewer dwelling units or property classified in class one [or], two OR FIVE as defined in article eighteen of the real property tax law containing six or fewer dwelling units and one retail store. f. Except in accordance with proper judicial order or as otherwise provided by law, it shall be unlawful for the commissioner, any officer or employee of the department, the president or a commissioner or employee of the tax commission, any person engaged or retained by the department or the tax commission on an independent contract basis, or any person, who, pursuant to this section, is permitted to inspect any income and expense statement or to whom a copy, an abstract or a portion of any such statement is furnished, to divulge or make known in any manner except as provided in this subdivision, the amount of income and/or expense or any particulars set forth or disclosed in any such statement required under this section. The commissioner, the president of the tax commission, or any commissioner or officer or employee of the department or the tax commission charged with the custody of such state- ments shall not be required to produce any income and expense statement or evidence of anything contained in them in any action or proceeding in any court, except on behalf of the department or the tax commission. Nothing herein shall be construed to prohibit the delivery to an owner or his or her duly authorized representative of a certified copy of any statement filed by such owner pursuant to this section or to prohibit the publication of statistics so classified as to prevent the identifi- cation of particular statements and the items thereof, or making known aggregate income and expense information disclosed with respect to prop- erty classified as class four as defined in article eighteen of the real property tax law without identifying information about individual leas- es, or making known a range as determined by the commissioner within which the income and expenses of a property classified as class two OR CLASS FIVE falls, or the inspection by the legal representatives of the department or of the tax commission of the statement of any owner who shall bring an action to correct the assessment. Any violation of the provisions of this subdivision shall be punished by a fine not exceeding one thousand dollars or by imprisonment not exceeding one year, or both, at the discretion of the court, and if the offender be an officer or employee of the department or the tax commission, the offender shall be dismissed from office. S 12. Subdivisions a, a-1, a-2, a-3, a-4 and a-5 of section 11-319 of the administrative code of the city of New York, subdivisions a, a-1, a-2 and a-3 as amended and subdivisions a-4 and a-5 as added by local law number 15 of the city of New York for the year 2011, are amended to read as follows: a. A tax lien or tax liens on a property or any component of the amount thereof may be sold by the city as authorized by subdivision b of this section, when such tax lien or tax liens shall have remained unpaid
in whole or in part for one year, provided, however, that a tax lien or tax liens on any class one property or [on] class two property [that is a residential condominium or residential cooperative], as such classes of property are defined in subdivision one of section eighteen hundred two of the real property tax law, may be sold by the city only when the real property tax component of such tax lien or tax liens shall have remained unpaid in whole or in part for three years or, in the case of any class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a residential condominium or a residential cooperative], as such class of property is defined in subdivision one of section eighteen hundred two of the real property tax law, for two years, and equals or exceeds the sum of five thousand dollars or, in the case of abandoned class one property [or], abandoned class two property [that is a resi- dential condominium or residential cooperative], for eighteen months, and after such sale, shall be transferred, in the manner provided by this chapter, and provided, further, however, that (i) the real property tax component of such tax lien may not be sold pursuant to this subdivi- sion on any residential real property in class one that is receiving an exemption pursuant to section 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred fifty-eight of the real property tax law with respect to real property purchased with payments received as prisoner of war compensation from the United States government, or pursuant to paragraph (b) or (c) of subdivision two of section four hundred fifty-eight-a of the real property tax law, or where the owner of such residential real property in class one is receiving benefits in accordance with department of finance memorandum 05-3, or any successor memorandum thereto, relating to active duty military personnel, or where the owner of such residential real property in class one has been allowed a credit pursuant to subsection (e) of section six hundred six of the tax law for the calendar year in which the date of the first publication, pursuant to subdivision a of section 11-320 of this chap- ter, of the notice of sale, occurs or for the calendar year immediately preceding such date and (ii) the sewer rents component, sewer surcharges component or water rents component of such tax lien may not be sold pursuant to this subdivision on any one family residential real property in class one or on any two or three family residential real property in class one that is receiving an exemption pursuant to section 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred fifty-eight of the real property tax law with respect to real property purchased with payments received as prisoner of war compensation from the United States government, or pursuant to paragraph (b) or (c) of subdivision two of section four hundred fifty-eight-a of the real property tax law, or where the owner of any two or three family residential real property in class one is receiving benefits in accordance with department of finance memorandum 05-3, or any successor memorandum thereto, relating to active duty military personnel, or where the owner of any two or three family residential real property in class one has been allowed a credit pursuant to subsection (e) of section six hundred six of the tax law for the calendar year in which the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale, occurs or for the calendar year immediately preceding such date. A tax lien or tax liens on any property classified as a [class two property, except a class two property that is a residential condominium or residential cooperative, or a class two residential prop- erty owned by a company organized pursuant to article XI of the state
private housing finance law that is not a residential condominium or a residential cooperative, or]
class three property, OR A CLASS FIVE PROP- ERTY OWNED BY A COMPANY ORGANIZED PURSUANT TO ARTICLE XI OF THE STATE PRIVATE HOUSING FINANCE LAW as such classes of property are defined in subdivision one of section eighteen hundred two of the real property tax law, shall not be sold by the city unless such tax lien or tax liens include a real property tax component as of the date of the first publi- cation, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale. Notwithstanding any provision of this subdivision to the contrary, any such tax lien or tax liens that remain unpaid in whole or in part after such date may be sold regardless of whether such tax lien or tax liens include a real property tax component. A tax lien or tax liens on a property classified as a class four property, as such class of property is defined in subdivision one of section eighteen hundred two of the real property tax law, shall not be sold by the city unless such tax lien or tax liens include a real property tax component or sewer rents component or sewer surcharges component or water rents component or emergency repair charges component, where such emergency repair charges accrued on or after January first, two thousand six and are made a lien pursuant to section 27-2144 of this code, as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale, provided, however, that any tax lien or tax liens that remain unpaid in whole or in part after such date may be sold regardless of whether such tax lien or tax liens include a real property tax component, sewer rents component, sewer surcharges component, water rents component or emergency repair charges component. For purposes of this subdivision, the words "real property tax" shall not include an assessment or charge upon property imposed pursuant to section 25-411 of [the administrative] THIS code. A sale of a tax lien or tax liens shall include, in addition to such lien or liens that have remained unpaid in whole or in part for one year, or, in the case of any class one property or class two property [that is a residential condo- minium or residential cooperative], when the real property tax component of such lien or liens has remained unpaid in whole or in part for three years, or, in the case of any class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a residential condominium or a residen- tial cooperative], when the real property tax component of such lien or liens has remained unpaid in whole or in part for two years, and equals or exceeds the sum of five thousand dollars, any taxes, assessments, sewer rents, sewer surcharges, water rents, any other charges that are made a lien subject to the provisions of this chapter, the costs of any advertisements and notices given pursuant to this chapter, any other charges that are due and payable, a surcharge pursuant to section 11-332 of this chapter, and interest and penalties thereon or such component of the amount thereof as shall be determined by the commissioner of finance. The commissioner of finance may promulgate rules defining "abandoned" property, as such term is used in this subdivision. a-1. A subsequent tax lien or tax liens on a property or any component of the amount thereof may be sold by the city pursuant to this chapter, provided, however, that notwithstanding any provision in this chapter to the contrary, such tax lien or tax liens may be sold regardless of whether such tax lien or tax liens have remained unpaid in whole or in part for one year and, notwithstanding any provision in this chapter to the contrary, in the case of any class one property or class two proper- ty [that is a residential condominium or residential cooperative] or,
beginning January first, two thousand twelve, in the case of any class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a resi- dential condominium or a residential cooperative], such tax lien or tax liens may be sold if the real property tax component of such tax lien or tax liens has remained unpaid in whole or in part for one year, and provided, further, however, that (i) the real property tax component of such tax lien may not be sold pursuant to this subdivision on any resi- dential real property in class one that is receiving an exemption pursu- ant to section 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred fifty-eight of the real property tax law with respect to real property purchased with payments received as prisoner of war compensation from the United States government, or pursuant to para- graph (b) or (c) of subdivision two of section four hundred fifty-eight-a of the real property tax law, or where the owner of such residential real property in class one is receiving benefits in accord- ance with department of finance memorandum 05-3, or any successor memo- randum thereto, relating to active duty military personnel, or where the owner of such residential real property in class one has been allowed a credit pursuant to subsection (e) of section six hundred six of the tax law for the calendar year in which the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale, occurs or for the calendar year immediately preceding such date and (ii) the sewer rents component, sewer surcharges component or water rents component of such tax lien may not be sold pursuant to this subdivision on any one family residential real property in class one or on any two or three family residential real property in class one that is receiving an exemption pursuant to section 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred fifty-eight of the real property tax law with respect to real property purchased with payments received as prisoner of war compensation from the United States government, or pursuant to paragraph (b) or (c) of subdivision two of section four hundred fifty-eight-a of the real property tax law, or where the owner of any two or three family residential real property in class one is receiving benefits in accordance with department of finance memorandum 05-3, or any successor memorandum thereto, relating to active duty military personnel, or where the owner of any two or three family residential real property in class one has been allowed a credit pursu- ant to subsection (e) of section six hundred six of the tax law for the calendar year in which the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale, occurs or for the calendar year immediately preceding such date. For purposes of this subdivision, the term "subsequent tax lien or tax liens" shall mean any tax lien or tax liens on property that become such on or after the date of sale of any tax lien or tax liens on such prop- erty that have been sold pursuant to this chapter, provided that the prior tax lien or tax liens remain unpaid as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chap- ter, of the notice of sale of the subsequent tax lien or tax liens. A subsequent tax lien or tax liens on any property classified as a [class two property, except a class two property that is a residential condo- minium or residential cooperative, or a class two residential property owned by a company organized pursuant to article XI of the state private housing finance law that is not a residential condominium or a residen- tial cooperative, or]class three property, OR A CLASS FIVE PROPERTY OWNED BY A COMPANY ORGANIZED PURSUANT TO ARTICLE XI OF THE STATE PRIVATE
HOUSING FINANCE LAW, as such classes of property are defined in subdivi- sion one of section eighteen hundred two of the real property tax law, shall not be sold by the city unless such tax lien or tax liens include a real property tax component as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale. Notwithstanding any provision of this subdivision to the contrary, any such tax lien or tax liens that remain unpaid in whole or in part after such date may be sold regardless of whether such tax lien or tax liens include a real property tax component. A subsequent tax lien or tax liens on a property classified as a class four property, as such class of property is defined in subdivision one of section eighteen hundred two of the real property tax law, shall not be sold by the city unless such tax lien or tax liens include a real property tax component or sewer rents component or sewer surcharges component or water rents component or emergency repair charges component, where such emergency repair charges accrued on or after January first, two thousand six and are made a lien pursuant to section 27-2144 of this code, as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale, provided, however, that any tax lien or tax liens that remain unpaid in whole or in part after such date may be sold regardless of whether such tax lien or tax liens include a real property tax component, sewer rents component, sewer surcharges component, water rents component or emergency repair charges component. For purposes of this subdivision, the words "real property tax" shall not include an assessment or charge upon property imposed pursuant to section 25-411 of [the administrative] THIS code. Nothing in this subdi- vision shall be deemed to limit the rights conferred by section 11-332 of this chapter on the holder of a tax lien certificate with respect to a subsequent tax lien. a-2. In addition to any sale authorized pursuant to subdivision a or subdivision a-1 of this section and notwithstanding any provision of this chapter to the contrary, beginning on December first, two thousand seven, the water rents, sewer rents and sewer surcharges components of any tax lien on any class of real property, as such real property is classified in subdivision one of section eighteen hundred two of the real property tax law, may be sold by the city pursuant to this chapter, where such water rents, sewer rents or sewer surcharges component of such tax lien, as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale: (i) shall have remained unpaid in whole or in part for one year and (ii) equals or exceeds the sum of one thousand dollars or, beginning on March first, two thousand eleven, in the case of any two or three family resi- dential real property in class one, for one year, and equals or exceeds the sum of two thousand dollars, or, beginning on January first, two thousand twelve, in the case of any class [two] FIVE residential proper- ty owned by a company organized pursuant to article XI of the state private housing finance law [that is not a residential condominium or a residential cooperative], as such class of property is defined in subdi- vision one of section eighteen hundred two of the real property tax law, for two years, and equals or exceeds the sum of five thousand dollars; provided, however, that such water rents, sewer rents or sewer surcharges component of such tax lien may not be sold pursuant to this subdivision on any one family residential real property in class one or on any two or three family residential real property in class one that is receiving an exemption pursuant to section 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred fifty-eight of the real
property tax law with respect to real property purchased with payments received as prisoner of war compensation from the United States govern- ment, or pursuant to paragraph (b) or (c) of subdivision two of section four hundred fifty-eight-a of the real property tax law, or where the owner of any two or three family residential real property in class one is receiving benefits in accordance with department of finance memoran- dum 05-3, or any successor memorandum thereto, relating to active duty military personnel, or where the owner of any two or three family resi- dential real property in class one has been allowed a credit pursuant to subsection (e) of section six hundred six of the tax law for the calen- dar year in which the date of the first publication, pursuant to subdi- vision a of section 11-320 of this chapter, of the notice of sale, occurs or for the calendar year immediately preceding such date. After such sale, any such water rents, sewer rents or sewer surcharges compo- nent of such tax lien may be transferred in the manner provided by this chapter. a-3. In addition to any sale authorized pursuant to subdivision a or subdivision a-1 of this section and notwithstanding any provision of this chapter to the contrary, beginning on December first, two thousand seven, a subsequent tax lien on any class of real property, as such real property is classified in subdivision one of section eighteen hundred two of the real property tax law, may be sold by the city pursuant to this chapter, regardless of whether such subsequent tax lien, or any component of the amount thereof, shall have remained unpaid in whole or in part for one year, and regardless of whether such subsequent tax lien, or any component of the amount thereof, equals or exceeds the sum of one thousand dollars or beginning on March first, two thousand elev- en, in the case of any two or three family residential real property in class one, a subsequent tax lien on such property may be sold by the city pursuant to this chapter, regardless of whether such subsequent tax lien, or any component of the amount thereof, shall have remained unpaid in whole or in part for one year, and regardless of whether such subse- quent tax lien, or any component of the amount thereof, equals or exceeds the sum of two thousand dollars, or, beginning on January first, two thousand twelve, in the case of any class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a residential condominium or a residential cooperative], as such class of property is defined in subdivision one of section eighteen hundred two of the real property tax law, a subsequent tax lien on such property may be sold by the city pursuant to this chapter, regardless of whether such subsequent tax lien, or any component of the amount thereof, shall have remained unpaid in whole or in part for two years, and regardless of whether such subse- quent tax lien, or any component of the amount thereof, equals or exceeds the sum of five thousand dollars; provided, however, that such subsequent tax lien may not be sold pursuant to this subdivision on any one family residential real property in class one or on any two or three family residential real property in class one that is receiving an exemption pursuant to section 11-245.3 or 11-245.4 of this title, or pursuant to section four hundred fifty-eight of the real property tax law with respect to real property purchased with payments received as prisoner of war compensation from the United States government, or pursuant to paragraph (b) or (c) of subdivision two of section four hundred fifty-eight-a of the real property tax law, or where the owner of any two or three family residential real property in class one is receiving benefits in accordance with department of finance memorandum
05-3, or any successor memorandum thereto, relating to active duty mili- tary personnel, or where the owner of any two or three family residen- tial real property in class one has been allowed a credit pursuant to subsection (e) of section six hundred six of the tax law for the calen- dar year in which the date of the first publication, pursuant to subdi- vision a of section 11-320 of this chapter, of the notice of sale, occurs or for the calendar year immediately preceding such date. After such sale, any such subsequent tax lien, or any component of the amount thereof, may be transferred in the manner provided by this chapter. For purposes of this subdivision, the term "subsequent tax lien" shall mean the water rents, sewer rents or sewer surcharges component of any tax lien on property that becomes such on or after the date of sale of any water rents, sewer rents or sewer surcharges component of any tax lien on such property that has been sold pursuant to this chapter, provided that the prior tax lien remains unpaid as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chap- ter, of the notice of sale of the subsequent tax lien. Nothing in this subdivision shall be deemed to limit the rights conferred by section 11-332 of this chapter on the holder of a tax lien certificate with respect to a subsequent tax lien. a-4. In addition to any sale authorized pursuant to subdivision a, a-1, a-2 or a-3 of this section and notwithstanding any provision of this chapter to the contrary, beginning on March first, two thousand eleven, the emergency repair charges component or alternative enforce- ment expenses and fees component, where such emergency repair charges accrued on or after January first, two thousand six and are made a lien pursuant to section 27-2144 of this code, or where such alternative enforcement expenses and fees are made a lien pursuant to section 27-2153 of this code, of any tax lien on any class of real property, as such real property is defined in subdivision one of section eighteen hundred two of the real property tax law, may be sold by the city pursu- ant to this chapter, where such emergency repair charges component or alternative enforcement expenses and fees component of such tax lien, as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale: (i) shall have remained unpaid in whole or in part for one year, and (ii) equals or exceeds the sum of one thousand dollars or, beginning on January first, two thousand twelve, in the case of any class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a residential condominium or a residential cooperative], as such class of property is defined in subdivision one of section eighteen hundred two of the real property tax law, for two years, and equals or exceeds the sum of five thousand dollars; provided, however, that such emergency repair charges component or alternative enforcement expenses and fees component of such tax lien may not be sold pursuant to this subdivision on any one, two or three family residential real property in class one, except a three family residential property in class one where such property is subject to the provisions of section 27-2153 of this code and is not the primary resi- dence of the owner. After such sale, any such emergency repair charges component or alternative enforcement expenses and fees component of such tax lien may be transferred in the manner provided by this chapter. a-5. In addition to any sale authorized pursuant to subdivision a, a-1, a-2 or a-3 of this section and notwithstanding any provision of this chapter to the contrary, beginning on March first, two thousand eleven, a subsequent tax lien on any class of real property, or begin-
ning on January first, two thousand twelve in the case of any class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a resi- dential condominium or a residential cooperative], a subsequent tax lien on such property, may be sold by the city pursuant to this chapter, regardless of the length of time such subsequent tax lien, or any compo- nent of the amount thereof, shall have remained unpaid, and regardless of the amount of such subsequent tax lien. After such sale, any such subsequent tax lien, or any component of the amount thereof, may be transferred in the manner provided by this chapter. For purposes of this subdivision, the term "subsequent tax lien" shall mean the emergency repair charges component or alternative enforcement expenses and fees component, where such emergency repair charges accrued on or after Janu- ary first, two thousand six and are made a lien pursuant to section 27-2144 of this code, or where such alternative enforcement expenses and fees are made a lien pursuant to section 27-2153 of this code, of any tax lien on property that becomes such on or after the date of sale of any emergency repair charges component or alternative enforcement expenses and fees component, of any tax lien on such property that has been sold pursuant to this chapter, provided that the prior tax lien remains unpaid as of the date of the first publication, pursuant to subdivision a of section 11-320 of this chapter, of the notice of sale of the subsequent tax lien. Nothing in this subdivision shall be deemed to limit the rights conferred by section 11-332 of this chapter on the holder of a tax lien certificate with respect to a subsequent tax lien. S 13. Subparagraph (i) of paragraph 2 of subdivision b and subpara- graph (ii) of paragraph 1 of subdivision h of section 11-320 of the administrative code of the city of New York, as added by local law number 15 of the city of New York for the year 2011, are amended to read as follows: (i) Such notices shall also include, with respect to any property owner in class one [or], class two OR CLASS FIVE, as such classes of property are defined in subdivision one of section eighteen hundred two of the real property tax law, an exemption eligibility checklist. Within ten business days of receipt of a completed exemption eligibility check- list from such property owner, provided that such receipt occurs prior to the date of sale of any tax lien or tax liens on his or her property, the department of finance shall review such checklist to determine, based on the information provided by the property owner, whether such property owner could be eligible for any exemption, credit or other benefit that would entitle them to be excluded from a tax lien sale and, if the department determines that such property owner could be eligible for any such exemption, credit or other benefit, shall mail such proper- ty owner an application for the appropriate exemption, credit or other benefit. If, within twenty business days of the date the department mailed such application, the department has not received a completed application from such property owner, the department shall mail such property owner a second application, and shall telephone the property owner, if the property owner has included his or her telephone number on the exemption eligibility checklist. (ii) all class [two] FIVE residential property owned by a company organized pursuant to article XI of the state private housing finance law [that is not a residential condominium or a residential cooperative] on which any tax lien has been sold pursuant to subdivision a, a-2 or a-4 of section 11-319 of this title.
S 14. Subdivision (a) of section 11-354 of the administrative code of the city of New York, as amended by local law number 37 of the city of New York for the year 1996, is amended to read as follows: (a) Notwithstanding any other provision of law and notwithstanding any omission to hold a tax lien sale, whenever any tax, assessment, sewer rent, sewer surcharge, water rent, any charge that is made a lien subject to the provisions of this chapter or chapter four of this title, or interest and penalties thereon, has been due and unpaid for a period of at least one year from the date on which the tax, assessment or other legal charge represented thereby became a lien, or in the case of any class one property or any class two property [that is a residential condominium or residential cooperative], as such classes of property are defined in subdivision one of section eighteen hundred two of the real property tax law, or in the case of a CLASS FIVE PROPERTY THAT IS A multiple dwelling owned by a company organized pursuant to article XI of the private housing finance law with the consent and approval of the department of housing preservation and development, for a period of at least three years from the date on which the tax, assessment or other legal charge became a lien, the city, as owner of a tax lien, may main- tain an action in the supreme court to foreclose such lien. Such action shall be governed by the procedures set forth in section 11-335 of this chapter; provided, however, that such parcel shall only be sold to the highest responsible bidder. Such purchaser shall be deemed qualified as a responsible bidder pursuant to such criteria as are established in rules promulgated by the commissioner of finance after consultation with the commissioner of housing preservation and development. S 15. Subdivision 3 and the opening paragraph of subdivision 4 of section 11-401 of the administrative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, are amended to read as follows: 3. "Class." Any class of real property defined in subdivision one of section eighteen hundred two of the real property tax law, and any subclassification of class two OR CLASS FIVE real property where such subclassification is established by rule of the commissioner of finance promulgated pursuant to this subdivision. Any parcel of class one [or], class two OR CLASS FIVE real property that is subject to a tax lien or liens with a lien or liens to value ratio, as determined by the commissioner of finance, equal to or greater than fifteen percent and that meets one of the following two criteria: S 16. Subdivisions a and b of section 11-401.1 of the administrative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, are amended to read as follows: a. The commissioner of finance shall, not less than sixty days preced- ing the date of the sale of a tax lien or tax liens, submit to the commissioner of housing preservation and development a description by block and lot, or by such other identification as the commissioner of finance may deem appropriate, of any parcel of class one or class two real property on which there is a tax lien that may be foreclosed by the city. The commissioner of housing preservation and development shall determine, and direct the commissioner of finance, not less than ten days preceding the date of the sale of a tax lien or tax liens, whether any such parcel is a distressed property as defined in subdivision four of section 11-401 of this chapter. Any tax lien on a parcel so deter- mined to be a distressed property shall not be included in such sale. In connection with a subsequent sale of a tax lien or tax liens, the commissioner of finance may, not less than sixty days preceding the date
of the sale, resubmit to the commissioner of housing preservation and development a description by block and lot, or by such other identifica- tion as the commissioner of finance may deem appropriate, of any parcel of class one [or], class two OR CLASS FIVE real property that was previ- ously determined to be a distressed property pursuant to this paragraph and on which there is a tax lien that may be included in such sale. The commissioner of housing preservation and development shall determine, and direct the commissioner of finance, not less than ten days preceding the date of the sale, whether such parcel remains a distressed property. If the commissioner of housing preservation and development determines that the parcel is not a distressed property, then the tax lien on the parcel may be included in the sale. b. The commissioner of housing preservation and development may peri- odically review whether a parcel of class one [or], class two OR CLASS FIVE real property that is subject to subdivision c of this section or subdivision j of section 11-412.1 of this chapter remains a distressed property. If the commissioner determines that the parcel is not a distressed property as defined in subdivision four of section 11-401 of this chapter, then the parcel shall not be subject to such subdivisions. S 17. Subdivision b of section 11-404 of the administrative code of the city of New York, as amended by local law number 37 of the city of New York for the year 1996, is amended to read as follows: b. A tax lien on any class one property or any class two property [that is a residential condominium or residential cooperative], as such classes of property are defined in subdivision one of section eighteen hundred two of the real property tax law, and on any CLASS FIVE PROPERTY THAT IS A multiple dwelling owned by a company organized pursuant to article XI of the private housing finance law with the consent and approval of the department of housing preservation and development, shall not be foreclosed in the manner provided in this chapter until such tax lien has been due and unpaid for a period of at least three years from the date on which the tax, assessment or other legal charge represented thereby became a lien. S 18. Paragraph 5 of subdivision c of section 11-405 of the adminis- trative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, is amended to read as follows: (5) Notwithstanding paragraph one, two or three of this subdivision, with respect to installment agreements duly made, executed and filed on or after the date on which this paragraph takes effect, the commissioner of finance may also exclude or thereafter remove from such list any parcel of class one [or], class two OR CLASS FIVE real property, other than a parcel described in paragraph four of this subdivision, as to which an agreement has been duly made, executed and filed with such commissioner for the payment of the delinquent taxes, assessments or other legal charges, and the interest and penalties thereon, in install- ments. The first installment thereof shall be paid upon the filing of the installment agreement with the commissioner and shall be in an amount equal to not less than fifteen percent of the total amount of such delinquent taxes, assessments or other legal charges and the inter- est and penalties thereon. The remaining installments, which shall be twice the number of unpaid quarters of real estate taxes or the equiv- alent thereof, but which shall in no event exceed thirty-two in number, shall be payable quarterly on the first days of July, October, January and April. For the purposes of calculating the number of such remaining installments, unpaid real estate taxes that are due and payable on other
than a quarterly basis shall be deemed to be payable on a quarterly basis. S 19. Subparagraph (iii) of paragraph 3 of subdivision i of section 11-409 of the administrative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, is amended to read as follows: (iii) With respect to any parcel of class one [or], class two OR CLASS FIVE real property, other than a parcel described in subparagraph (i) or (ii) of this paragraph, such agreement shall provide for the payment in installments of the delinquent taxes, assessments and other legal charg- es, and the interest and penalties thereon, due and owing as of the date on which such agreement is requested. The first installment thereof shall be paid upon the filing of the installment agreement with the commissioner of finance and shall be in an amount at least equal to, at the applicant's election, either thirty-five percent or fifty percent of the total amount of such delinquent taxes, assessments or other legal charges and the interest and penalties thereon. The remaining install- ments, which shall be twice the number of unpaid quarters of real estate taxes or the equivalent thereof, but which shall in no event exceed twenty in number, shall be payable quarterly on the first days of July, October, January and April, together with interest at the rate or rates determined as provided in subparagraph (iv) of this paragraph. For the purposes of calculating the number of such remaining installments, unpaid real estate taxes that are due and payable on other than a quar- terly basis shall be deemed to be payable on a quarterly basis. S 20. The section heading of section 11-412.1 of the administrative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, is amended to read as follows: Special procedures relating to final judgment and release of class one [and], class two OR CLASS FIVE real property. S 21. Paragraph 1 of subdivision b, subdivisions c and d, paragraphs 1 and 4 of subdivision e, and subdivisions f, g, h, i and j of section 11-412.1 of the administrative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, are amended to read as follows: (1) The court shall make a final judgment authorizing the award of possession of any parcel of class one [or], class two OR CLASS FIVE real property described in the list of delinquent taxes not redeemed or with- drawn as provided in this chapter and as to which no answer is inter- posed as provided herein, and authorizing the commissioner of finance to prepare, execute and cause to be recorded a deed conveying either to the city or to a third party deemed qualified and designated by the commis- sioner of housing preservation and development full and complete title to such lands. Any such conveyance to a third party shall be for an existing use. c. Following the expiration of the four-month period prescribed in subdivision d of this section, but not more than eight months after the date on which, pursuant to subdivision b of this section, the final judgment authorizing the award of possession of a parcel of class one [or], class two OR CLASS FIVE real property was entered, the commission- er of finance may execute a deed, pursuant to subdivision b of this section, with respect to such parcel. The owner of said parcel shall continue to have all of the rights, liabilities, responsibilities, duties and obligations of an owner of such parcel, including, but not limited to, maintaining such parcel in compliance with the housing main- tenance, building and fire codes, and all other applicable laws, unless
and until the commissioner of finance has prepared and executed a deed conveying to the city or to a third party full and complete title to such parcel. Upon the execution of such deed, the city or the third party shall be seized of an estate in fee simple absolute in such land and all persons, including the state of New York, infants, incompetents, absentees and non-residents who may have had any right, title, interest, claim, lien or equity of redemption in or upon such lands shall be barred and forever foreclosed of all such right, title, interest, claim, lien or equity of redemption, except as otherwise provided in subdivi- sions e and f of this section. The appointment and tenure of receivers, trustees or any other persons, including administrators under article seven-A of the real property actions and proceedings law, appointed by an order of a court to manage real property, shall terminate when title to such property vests in the city or a third party pursuant to the provisions of this chapter. After such termination, said receivers, trustees or administrators shall be accountable to the courts that appointed them for the faithful performance of their fiduciary obli- gations during the term of their appointment and to the city or such third party for any rents and income received by them for any period subsequent to the date of the vesting of title in the city or such third party. If the city serves a tenant in possession of a dwelling unit with notice of termination of tenancy on grounds other than nonpayment of rent, the acceptance of rent for the first forty-five days after termi- nation of tenancy by anyone other than an employee of the department designated by the department to receive such rent shall not be deemed or construed as a waiver of the city's right to initiate and prosecute a proceeding to terminate the tenancy for good cause. d. Within four months after the date on which, pursuant to subdivision b of this section, the final judgment authorizing the award of possession of a parcel of class one [or], class two OR CLASS FIVE real property was entered, any person claiming to have an interest in such parcel shall have the right to make a payment to the commissioner of finance consisting of all taxes, assessments and other legal charges owing on said parcel, the lawful interest thereon to the date of payment and a penalty of five percent of said payment of taxes, assessments and other legal charges and interest, which penalty may not exceed one thou- sand dollars. Such payment shall be made in cash or by certified or bank check. Within such four-month period, such interested person may also request an installment agreement from the commissioner of finance. Such agreement shall require, in addition to full payment of the penalty specified in this subdivision at the time such agreement is entered into, the payment at such time of a first installment equal to fifty percent of all taxes, assessments and other legal charges, and the lawful interest thereon, then owing on such parcel, and the payment of the balance of such taxes, assessments and other legal charges and interest in four equal quarterly installments together with all current taxes, assessments and other legal charges that accrue during such peri- od. Upon receipt of payment in full of the amount specified in the first sentence of this subdivision, the commissioner of finance shall direct the corporation counsel to prepare and cause to be entered an order discontinuing the in rem tax foreclosure action as to said property, cancelling the notice of pendency of such action as to said property and vacating and setting aside the final judgment. Upon the execution of an installment agreement and payment of the amounts due at the time such agreement is executed as provided in this subdivision, the commissioner
of finance shall direct the corporation counsel to prepare and cause to be entered an order vacating and setting aside the final judgment. The entry of either such order shall restore all parties, including owners, mortgagees and any and all lienors, receivers and administrators and encumbrancers, to the status they held immediately before such final judgment was entered. Where the commissioner of finance approves an application requesting an installment agreement pursuant to this subdi- vision, the order vacating and setting aside the final judgment shall provide that in the event of any default as to the payment of either quarterly installments or current taxes, assessments or other legal charges during the term of such agreement, all payments under said agreement shall be forfeited and the corporation counsel, immediately upon notification by the commissioner of finance of such default, shall cause to be entered as to such property a supplemental judgment of fore- closure in the in rem action which authorizes the commissioner of finance to prepare, execute and cause to be recorded a deed conveying either to the city or to a third party full and complete title to such lands. Upon the entry of such supplemental judgment, the provisions of subdivisions c through i of this section shall apply in the same manner as such subdivisions would have applied had no payment been made nor installment agreement executed during the four-month period specified in this subdivision. 1. If the commissioner of finance has prepared, executed and caused to be recorded a deed conveying to the city full and complete title to a parcel of class one [or], class two OR CLASS FIVE real property acquired by in rem tax foreclosure, the city's interest in such parcel may be released pursuant to this subdivision on the application of any party who has an interest in said parcel as either owner, mortgagee, lienor, or encumbrancer at the time of the city's acquisition thereof where such application is made at any time up to sixteen months from the date on which the deed by which the city acquired title to said parcel was recorded. 4. The provisions contained in subdivision g of section 11-424 of this chapter shall govern such an application, except as follows: (a) where such provisions are inconsistent with the provisions contained in this subdivision, the provisions contained in this subdivi- sion shall govern such application; and (b) where the in rem foreclosure release board denies a written request for an installment agreement that was filed in connection with an application for release of the city's interest in a parcel of class one [or], class two OR CLASS FIVE real property and such application was filed within thirty days of the date of the city's acquisition of the property sought to be released, the board may, in its discretion, authorize a release of the city's interest, provided that the applicant thereafter pays all the amounts required to be paid pursuant to subdivi- sion d of section 11-424 of this chapter within thirty days of the date on which a letter requesting such payment is mailed or delivered to such applicant. f. If the commissioner of finance has prepared, executed and caused to be recorded a deed conveying to the city full and complete title to a parcel of class one [or], class two OR CLASS FIVE real property acquired by in rem tax foreclosure and such parcel is entitled to an exemption under any of the provisions of article four of the real property tax law during all or part of the period covered by the tax items appearing on a list of delinquent taxes, the owner of such parcel may apply for a release of the city's interest in such exempt property under the
provisions of subdivision e of this section during the period of time set forth in paragraph one of such subdivision and for an additional period up to ten years from the date on which the deed by which the city acquired title to said property was recorded. The application of such owner shall be accompanied by the nonrefundable fee required by para- graph four of subdivision b of section 11-424 of this chapter and shall contain, in addition to the statements, searches and proofs required by subdivision e of this section, a statement that an exemption under the real property tax law is being claimed. Such application shall also state either that it is accompanied by the written certificate of the comptroller setting forth the precise period during which said property, while owned by such application, and during the period after the city's acquisition up to the date of the certificate if said property was still being used for an exempt purpose after said acquisition, was entitled to an exemption and the exact nature and extent of such exemption or that an application for such written certificate has been filed with the comptroller. On issuing such written certificate, the comptroller shall cancel those tax items which have accrued during the period covered by the certificate to the extent the applicant is entitled to an exemption as set forth in the certificate. A release of the city's interest may be authorized only at the discretion of the in rem foreclosure release board and, except as otherwise provided in paragraph four of subdivision e of this section, subject to all the restrictions set forth in subdivi- sion g of section 11-424 of this chapter. A release to an exempt appli- cant shall be effected only after said applicant has paid all of the amounts required to be paid by subdivision d of section 11-424 of this chapter, except for those tax items which have been canceled, in whole or in part, pursuant to the comptroller's certificate, within thirty days of the date on which the letter requesting payment is mailed or delivered to the applicant. g. If the commissioner of finance has prepared, executed and caused to be recorded a deed conveying to the city or to a third party full and complete title to a parcel of class one [or], class two OR CLASS FIVE real property acquired by in rem tax foreclosure, the provisions contained in subdivisions f and i of section 11-424 of this chapter for the release of property so acquired shall not be available. If the commissioner of finance has prepared, executed and caused to be recorded a deed conveying to a third party full and complete title to a parcel of class one or class two real property acquired by in rem tax foreclosure, the provisions contained in subdivisions e and f of this section for the release of property so acquired shall not be available. h. Every deed given pursuant to the provisions of this section shall be presumptive evidence that the action and all proceedings therein and all proceedings prior thereto from and including the assessment of the lands affected and all notices required by law were regular and in accordance with all provisions of law relating thereto. After four months from the date of entry of the final judgment authorizing the award of possession of any parcel of class one [or], class two OR CLASS FIVE real property pursuant to the provisions of this section, the presumption shall be conclusive. No action to set aside such deed may be maintained unless the action is commenced and a notice of pendency of the action is filed in the office of the property county clerk prior to the time that the presumption becomes conclusive as aforesaid. Should any lawsuit or proceeding be commenced to set aside a deed conveying to a third party a parcel of class one [or], class two OR CLASS FIVE real property pursuant to the provisions of this section, such third party
shall send to the corporation counsel within ten days of their receipt a copy of any papers served on such third party in such lawsuit or proceeding. i. If the commissioner of finance does not execute a deed conveying to the city or to a third party a parcel of class one [or], class two OR CLASS FIVE real property within eight months after the entry of final judgment authorizing the award of possession of such parcel pursuant to subdivision b of this section, the commissioner of finance shall direct the corporation counsel to prepare and cause to be entered an order discontinuing the in rem foreclosure action as to said property, cancel- ing the notice of pendency of such action as to said property and vacat- ing and setting aside said final judgment. The entry of such order shall restore all parties, including owners, mortgagees and any and all lienors, receivers and administrators and encumbrancers, to the status they held immediately before such final judgment was entered. j. If the commissioner of finance directs the corporation counsel, pursuant to subdivision i of this section, to prepare and cause to be entered an order discontinuing the in rem foreclosure action with respect to a parcel of class one [or], class two OR CLASS FIVE real property determined to be distressed pursuant to section 11-401.1 of this chapter, the commissioner of housing preservation and development shall evaluate the parcel determined to be distressed and take such action as he or she deems appropriate under the programs, existing at the time of such evaluation, that are designed to encourage the rehabil- itation and preservation of existing housing, and shall monitor or cause to be monitored the status of the property. The commissioner of housing preservation and development shall maintain a register of properties determined to be distressed. S 22. Section 11-412.2 of the administrative code of the city of New York, as added by local law number 37 of the city of New York for the year 1996, is amended to read as follows: S 11-412.2 Council review of conveyance to a third party. The commis- sioner of finance shall, prior to the execution of a deed conveying full and complete title of any parcel of class one [or], class two OR CLASS FIVE real property to a third party pursuant to subdivision c of section 11-412.1 of this chapter, notify the council of the proposed conveyance. Within forty-five days of such notification, the council may act by local law disapproving the proposed conveyance. In the event the council does not act by local law within such forty-five day period, the council shall be deemed to have approved the proposed conveyance. During such forty-five day period or, if the city council acts by local law pursuant to this section, during the period of time from the notification of the council to the presentation to the mayor of such local law and during any additional period of time prescribed in section 37 of the charter, the eight-month period provided in subdivisions c and i of section 11-412.1 of this chapter shall be tolled. S 23. Paragraph 1 of subdivision a of section 163 of the New York city charter, as amended by local law number 77 of the city of New York for the year 1984, is amended to read as follows: 1. "Class designation" shall mean the determination, pursuant to section eighteen hundred two of the real property tax law, of whether real property is included in class one, two, three [or], four OR FIVE. S 24. Paragraph 1 of subdivision a of section 164-b of the New York city charter, as added by local law number 11 of the city of New York for the year 1984, is amended to read as follows:
1. "Class designation" shall mean the determination, pursuant to arti- cle eighteen of the real property tax law, of whether real property is included in class one, two, three [or], four OR FIVE. S 25. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law and shall apply to assessment rolls prepared pursuant to a taxable status date occurring on or after such date; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.

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