Bill S6681-2013

Relates to final judgment in foreclosures by in rem proceedings in the city of Buffalo

Relates to the disposition of surplus funds resulting from a tax lien foreclosure sale in the city of Buffalo; provides that a judgment may be entered, upon request of the tax district, without such district taking title to the property.

Details

Actions

  • Feb 26, 2014: REFERRED TO LOCAL GOVERNMENT

Memo

BILL NUMBER:S6681

TITLE OF BILL: An act relating to final judgment in foreclosures by in rem proceedings in the city of Buffalo

PURPOSE: To allow the City of Buffalo to obtain the proceeds of the sale of any property obtained through foreclosure without having to hold the title, for the benefit of the city's Urban Renewal Agency.

SUMMARY OF PROVISIONS:

Section 1: exempts the City of Buffalo from Section 1136 of the real property tax law which relates to the entry of final judgment by a court in a foreclosure of a tax lien through an in rem proceeding.

Subdivision 2: provides that upon final judgment in its favor, the City of Buffalo shall receive "the right to convey title" to the affected parcel(s). Current law grants the City of Buffalo "possession" of such parcel. Also, existing paragraphs (c) and (d) are deleted.

Subdivision 3: provides that a judgment may be entered, upon request of the City of Buffalo, without the City taking title to the property. New language specifically authorizes the City to sell any property obtained via judgment if it chooses not to retain such parcel for public use.

Subdivision 4: sets forth a process by which the City of Buffalo may sell property without taking title to it via public auction, and which provides for the proceeds of such sale going to the City of Buffalo's Urban Renewal Agency for weatherization and community development projects.

Section 2 specifies that this legislation shall take effect immediately.

EXISTING LAW: Under current law, a city or town can sell properties at auction, but can only receive the amount of the tax lien. Surplus monies are deposited with the County Comptroller. If after five years such monies remain unclaimed, they are turned over to the state.

JUSTIFICATION: While much of the City of Buffalo is experiencing a surge of urban revitalization, many communities are struggling with the effects of decades of economic distress- population loss, high unemployment and poverty rates-resulting in an aging housing stock that is increasingly in disrepair. The City of Buffalo has taken numerous steps to combat these issues through the creation of emergency home repair and weatherization programs; however, the need for these types of programs greatly outmatches the funding.

This legislation will allow the City of Buffalo to retain surplus funds received from properties sold at local tax foreclosure that are in excess of the amount of the municipality's tax lien. These monies will be directed to the city's Urban Renewal Agency, which is responsible for administering weatherization and home repair programs as well as community development projects, for the purpose of aiding responsible homeowners and furthering the mission of BURA.

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: This act shall take effect immediately and shall apply to any surplus funds from the proceeds of a tax lien foreclosure paid into court on or after such effective date.


Text

STATE OF NEW YORK ________________________________________________________________________ 6681 IN SENATE February 26, 2014 ___________
Introduced by Sen. KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT relating to final judgment in foreclosures by in rem proceedings in the city of Buffalo THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Final judgment; proceedings in the city of Buffalo. Notwithstanding the provisions of section 1136 of the real property tax law, the following provisions shall apply to final judgments in in rem proceedings taken in the city of Buffalo. 1. Generally. The court shall have full power to determine and enforce in all respects the priorities, rights, claims and demands of the several parties to the proceeding, as the same exist according to law, including the priorities, rights, claims and demands of the respondents as between themselves. The court shall further determine upon proof and shall make findings upon such proof whether there has been due compliance by the tax district with the provisions of article 11 of the real property tax law. 2. When an answer has been interposed. (a) When an answer has been interposed by a party other than a tax district as to any parcel of real property included in the petition described in section 1123 of the real property tax law and the court determines that the answer is meritori- ous, the court shall dismiss the petition of foreclosure, with or with- out prejudice, as to the affected parcel or parcels, unless an agreement is executed pursuant to subdivision 2 of section 1150 of the real prop- erty tax law. If the court determines that the answer is not meritori- ous, the court shall make a final judgment awarding to such tax district the right to convey title to the affected parcel or parcels in the same manner as provided by subdivision three of this section. (b) When an answer has been interposed by another tax district as to any parcel and the court shall determine that such other tax district has an interest in such parcel, then and in that event the tax districts having an interest in such parcel may by agreement between themselves pursuant to subdivision 1 of section 1150 of the real property tax law provide (i) for a conveyance without sale of any such parcel to one of
such tax districts free and clear of any right, title or interest in or lien upon such parcel or such other tax district or districts or (ii) for a conveyance without sale of any such parcel to one of such tax districts subject to any right, title or interest in or lien upon such parcel of such other tax district or districts. In either of such events, the court shall in its judgment expressly dispense with the sale and direct the making and execution of a conveyance by the enforcing officer in accordance with such agreement. In the absence of such an agreement, the court shall make a final judgment directing the sale of such parcel in the same manner as provided by subdivision four of this section, except that the conveyance may expressly be made subject to tax liens of a tax district as provided herein. 3. When no answer has been interposed. The court shall make a final judgment awarding to such tax district the right to convey title to any parcel of real property described in the petition of foreclosure not redeemed as provided in article 11 of the real property tax law and as to which no answer is interposed as provided herein. In addition there- to, where the enforcing officer has requested that such a parcel be sold pursuant to subdivision four of this section without the tax district taking title thereto, the judgment shall so direct. Otherwise such judg- ment shall contain a direction to the enforcing officer of the tax district to prepare, execute and cause to be recorded a deed conveying to such tax district full and complete title to such parcel. Upon the execution of such deed, the tax district shall be seized of an estate in fee simple absolute in such parcel and all persons, including the state, infants, incompetents, absentees and non-residents who may have had any right, title, interest, claim, lien or equity of redemption in or upon such parcel shall be barred and forever foreclosed of all such right, title, interest, claim, lien or equity of redemption. The tax district may sell any parcel so acquired in the manner provided by section 1166 of the real property tax law if it does not choose to retain the parcel for a public use. 4. Court-ordered sales. Where the enforcing officer requests that a parcel be sold without the tax district taking title thereto, the judg- ment shall direct that a public auction shall be conducted by or under the direction of the enforcing officer. Public notice of such sale shall be given once a week for at least three successive weeks in a newspaper published in the county in which such tax district is situated. The terms and conditions of such sale shall be as prescribed by court order, provided that all proceeds including any surplus, shall be paid to the enforcing officer for the benefit of the Buffalo urban renewal agency to support the agency's weatherization and community development projects. At the conclusion of such sale the enforcing officer shall prepare and execute a deed conveying to the purchaser or its designee full and complete title to such parcel. Upon the delivery and acceptance of such deed, the grantee shall be seized of an estate in fee simple absolute in such parcel and all persons, including the state, infants, incompetents, absentees and non-residents who may have had any right, title, interest, claim, lien or equity of redemption in or upon such parcel shall be barred and forever foreclosed of all such right, title, interest, claim, lien or equity of redemption. S 2. This act shall take effect immediately and shall apply to any surplus funds from the proceeds of a tax lien foreclosure sale in the city of Buffalo paid into court on or after such effective date.

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