Add Art 11 Title 3-A SS1141 & 1142, 1136-a & 1136-b, RPT L
Authorizes localities to convey distressed residential real property that has been foreclosed upon for non-payment of real estate taxes to a third party; establishes that third party may be an individual or for-profit or not-for-profit entity which would rehabilitate and manage such property, providing needed housing while restoring the property to the non-delinquent tax rolls; called "third party transfer program".
STATE OF NEW YORK
________________________________________________________________________
5862
2009-2010 Regular Sessions
IN ASSEMBLY
February 20, 2009
___________
Introduced by M. of A. FITZPATRICK, ERRIGO, TEDISCO, McKEVITT -- Multi-
Sponsored by -- M. of A. BACALLES, BARCLAY, BURLING, CONTE, CROUCH,
GIGLIO, KOLB, McDONOUGH, O'MARA, QUINN, RAIA, SAYWARD, THIELE, WALKER
-- read once and referred to the Committee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to enacting
provisions related to distressed property
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Article 11 of the real property tax law is amended by
2 adding a new title 3-A to read as follows:
3 TITLE 3-A
4 DISTRESSED PROPERTY
5 Section 1141. Definitions.
6 1142. Procedures for distressed property.
7 § 1141. Definitions. When used in this article: 1. "Distressed prop-
8 erty" means any parcel of residential real property that is subject to a
9 tax lien or liens with a lien or liens to value ratio, as determined by
10 the enforcing officer, equal to or greater than fifteen percent and that
11 meets one of the following two criteria:
12 (a) such parcel has an average of five or more violations of record of
13 the housing maintenance code per dwelling unit which constitute a fire
14 hazard or a serious threat to the life, health or safety of occupants
15 thereof; and
16 (b) such parcel is subject to a lien or liens for any expenses
17 incurred by the department of housing for the repair or the elimination
18 of any fire hazard or serious threat to the life, health or safety of
19 occupants thereof or any dangerous or unlawful conditions, in an amount
20 equal to or greater than one thousand dollars.
21 2. "Housing maintenance code" means the provisions of the multiple
22 residence law or the multiple dwelling law, whichever is applicable to
23 the tax district in which the distressed property is situate, the state
24 building conservation and fire prevention code or any local law, ordi-
25 nance, resolution or regulation made or adopted by such tax district
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02960-01-9
A. 5862 2
1 relating to the construction, alteration, use, maintenance or occupancy
2 of such property.
3 3. "Department of housing" means any officer, board, bureau, commis-
4 sion, department or other agency of the tax district, or any other
5 public authority designated by the governing body of the tax district in
6 which such property is situate to carry out the functions vested in the
7 department of housing under this article or delegated to the department
8 by the governing body in order to carry out the purposes and provisions
9 of this article.
10 4. "Head of the department of housing" means the person who is the
11 chief executive officer of the department of housing.
12 5. "Residential real property" means any premises that is or may be
13 used in whole or in part as a personal residence, and shall include a
14 one, two, or three family house, an individual condominium unit, a coop-
15 erative apartment unit, or a farm dwelling.
16 6. "Governing body" means: (a) in a county, the county legislative
17 body; (b) in a city, the board of aldermen, common council, commission
18 or other body vested by its charter or other law with jurisdiction to
19 enact ordinances or local laws, except that in a city having a popu-
20 lation of one million or more, if there be a board of estimate, the term
21 "governing body" shall mean such board of estimate; (c) in a town, the
22 town board; and (d) in a village, the board of trustees.
23 § 1142. Procedures for distressed property. 1. The enforcing officer
24 shall, not less than sixty days preceding the date of the sale of a tax
25 lien or tax liens, submit to the department of housing, a description by
26 tax map number, or by such other identification as the enforcing officer
27 may deem appropriate, of any parcel of residential real property on
28 which there is a tax lien that may be foreclosed by the tax district.
29 The head of the department of housing shall determine and direct the
30 enforcing officer, not less than ten days preceding the date of the sale
31 of a tax lien or tax liens, whether any such parcel is a distressed
32 property as defined in subdivision one of section eleven hundred forty-
33 one of this title. Any tax lien on a parcel so determined to be a
34 distressed property shall not be included in such sale. In connection
35 with a subsequent sale of a tax lien or tax liens, the enforcing officer
36 may, not less than sixty days preceding the date of the sale, resubmit
37 to the head of the department of housing a description by tax map
38 number, or by such other identification as the enforcing officer may
39 deem appropriate, of any parcel of residential real property that was
40 previously determined to be a distressed property pursuant to this
41 subdivision and on which there is a tax lien that may be included in
42 such sale. The head of the department of housing shall determine and
43 direct the enforcing officer, not less than ten days preceding the date
44 of the sale, whether such parcel remains a distressed property. If the
45 head of the department of housing determines that the parcel is not a
46 distressed property, then the tax lien on the parcel may be included in
47 the sale.
48 2. The head of the department of housing may periodically review
49 whether a parcel of residential real property is subject to subdivision
50 three of this section or subdivision seven of section eleven hundred
51 thirty-six-a of this article remains a distressed property. If the head
52 of the department of housing determines that the parcel is not a
53 distressed property as defined in subdivision one of section eleven
54 hundred forty-one of this title, then the parcel shall not be subject to
55 such subdivisions.
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1 3. Any parcel so determined to be a distressed property shall be
2 subject to an in rem foreclosure action, or in the case where the
3 enforcing officer does not commence such action the head of the depart-
4 ment of housing shall evaluate such parcel and take such action as he or
5 she deems appropriate under the programs, existing at the time of such
6 evaluation, that are designed to encourage the rehabilitation and pres-
7 ervation of existing housing, and shall monitor or cause to be monitored
8 the status of the property. The head of the department of housing, in
9 his or her discretion, shall cause an inspection to be conducted on any
10 parcel so determined to be a distressed property. In addition, the head
11 of the department of housing shall submit to the governing body of the
12 tax district in which such distressed property is situate, a list of all
13 parcels so determined to be a distressed property within thirty days
14 from the date such parcels are identified as a distressed property.
15 § 2. The real property tax law is amended by adding two new sections
16 1136-a and 1136-b to read as follows:
17 § 1136-a. Special procedures relating to final judgment and release of
18 residential real property. Notwithstanding any other provision of law to
19 the contrary:
20 1. The court shall determine upon proof and shall make a finding upon
21 such proof whether there has been due compliance by the tax district
22 with the applicable provisions of this chapter.
23 2. (a) The court shall make a final judgment authorizing the award of
24 possession of any parcel of residential real property described in the
25 list of delinquent taxes not redeemed or withdrawn as provided in this
26 article and as to which no answer is interposed as provided in this
27 section, and authorizing the enforcing officer to prepare, execute and
28 cause to be recorded a deed conveying either to the tax district or to a
29 third party deemed qualified and designated by the head of the depart-
30 ment of housing full and complete title to such lands. Any such convey-
31 ance to a third party shall be for an existing use.
32 (b) Such third party shall be deemed qualified and shall be designated
33 pursuant to such criteria as are established in rules promulgated by the
34 head of the department of housing, provided, however, that such criteria
35 shall include but not be limited to: residential management experience;
36 financial ability; rehabilitation experience; ability to work with
37 government and community organizations; neighborhood ties; and that the
38 head of the department of housing shall consider whether the third party
39 is a responsible legal tenant, not-for-profit organization or neighbor-
40 hood-based-for-profit individual or organization. The head of the
41 department of housing shall not deem qualified any third party who has
42 been finally adjudicated by a court of competent jurisdiction, within
43 seven years of the date on which such third party would otherwise be
44 deemed qualified, to have violated any section of articles one hundred
45 fifty, one hundred seventy-five, one hundred seventy-six, one hundred
46 eighty, one hundred eighty-five or two hundred of the penal law or any
47 similar laws of another jurisdiction, or who has been suspended or
48 debarred from contracting with the tax district or any agency of the tax
49 district pursuant to any provision of law, rule or regulation during the
50 period of such suspension or debarment. The rules promulgated by the
51 head of the department of housing pursuant to this paragraph may estab-
52 lish other bases for disqualification of a third party.
53 3. (a) Following the expiration of the four-month period prescribed in
54 subdivision four of this section, but not more than eight months after
55 the date on which, pursuant to subdivision two of this section, the
56 final judgment authorizing the award of possession of a parcel of resi-
A. 5862 4
1 dential real property was entered, the enforcing officer may execute a
2 deed, pursuant to subdivision two of this section, with respect to such
3 parcel. The owner of said parcel shall continue to have all of the
4 rights, liabilities, responsibilities, duties and obligations of an
5 owner of such parcel, including, but not limited to, maintaining such
6 parcel in compliance with the housing maintenance, building and fire
7 codes, and all other applicable laws, unless and until the enforcing
8 officer has prepared and executed a deed conveying to the tax district
9 or to a third party full and complete title to such parcel. Upon the
10 execution of such deed, the tax district or the third party shall be
11 seized of an estate in fee simple absolute in such land and all persons,
12 including the state of New York, infants, incompetents, absentees and
13 non-residents who may have had any right, title, interest, claim, lien
14 or equity of redemption in or upon such lands shall be barred and forev-
15 er foreclosed of all such right, title, interest, claim, lien or equity
16 of redemption. The appointment and tenure of receivers, trustees or any
17 other persons, including administrators under article seven-A of the
18 real property actions and proceedings law, appointed by an order of a
19 court to manage real property, shall terminate when title to such prop-
20 erty vests in the city or a third party pursuant to the provisions of
21 this chapter. After such termination, said receivers, trustees or admin-
22 istrators shall be accountable to the courts that appointed them for the
23 faithful performance of their fiduciary obligations during the term of
24 their appointment and to the tax district or such third party for any
25 rents and income received by them for any period subsequent to the date
26 of the vesting of title in the tax district or such third party.
27 (b) If the tax district serves a tenant in possession of a dwelling
28 unit with notice of termination of tenancy on grounds other than nonpay-
29 ment of rent, the acceptance of rent for the first forty-five days after
30 termination of tenancy by anyone other than an employee of the depart-
31 ment of housing designated by the department of housing to receive such
32 rent shall not be deemed or construed as a waiver of the tax district's
33 right to initiate and prosecute a proceeding to terminate the tenancy
34 for good cause.
35 4. Within four months after the date on which, pursuant to subdivision
36 two of this section, the final judgment authorizing the award of
37 possession of a parcel of residential real property was entered, any
38 person claiming to have an interest in such parcel shall have the right
39 to make a payment to the enforcing officer of all taxes, assessments and
40 other legal charges owing on said parcel, the lawful interest thereon to
41 the date of payment and a penalty of five percent of said payment of
42 taxes, assessments and other legal charges and interest, which penalty
43 may not exceed one thousand dollars. Such payment shall be made in cash
44 or by certified or bank check. Within such four-month period, such
45 interested person may also request an installment agreement from the
46 enforcing officer. Such agreement shall require, in addition to full
47 payment of the penalty specified in this subdivision at the time such
48 agreement is entered into, the payment at such time of a first install-
49 ment equal to fifty percent of all taxes, assessments and other legal
50 charges, and the lawful interest thereon, then owing on such parcel, and
51 the payment of the balance of such taxes, assessments and other legal
52 charges and interest in four equal quarterly installments together with
53 all current taxes, assessments and other legal charges that accrue
54 during such period. Upon receipt of payment in full of the amount speci-
55 fied in the first sentence of this subdivision, the enforcing officer
56 shall direct the attorney for the tax district to prepare and cause to
A. 5862 5
1 be entered an order discontinuing the in rem tax foreclosure action as
2 to said property, cancelling the notice of pendency of such action as to
3 said property and vacating and setting aside the final judgment. Upon
4 the execution of an installment agreement and payment of the amounts due
5 at the time such agreement is executed as provided in this subdivision,
6 the enforcing officer shall direct the attorney for the tax district to
7 prepare and cause to be entered an order vacating and setting aside the
8 final judgment. The entry of either such order shall restore all
9 parties, including owners, mortgagees and any and all lienors, receivers
10 and administrators and encumbrancers, to the status they held immediate-
11 ly before such final judgment was entered. Where the enforcing officer
12 approves an application requesting an installment agreement pursuant to
13 this subdivision, the order vacating and setting aside the final judg-
14 ment shall provide that in the event of any default as to the payment of
15 either quarterly installments or current taxes, assessments or other
16 legal charges during the term of such agreement, all payments under said
17 agreement shall be forfeited and the attorney for the tax district,
18 immediately upon notification by the enforcing officer of such default,
19 shall cause to be entered as to such property a supplemental judgment of
20 foreclosure in the in rem action which authorizes the enforcing officer
21 to prepare, execute and cause to be recorded a deed conveying either to
22 the tax district or to a third party full and complete title to such
23 lands. Upon the entry of such supplemental judgment, the provisions of
24 subdivision three of this section shall apply in the same manner as such
25 subdivision would have applied had no payment been made nor installment
26 agreement executed during the four-month period specified in this subdi-
27 vision.
28 5. Every deed given pursuant to the provisions of this section shall
29 be presumptive evidence that the action and all proceedings therein and
30 all proceedings prior thereto from and including the assessment of the
31 lands affected and all notices required by law were regular and in
32 accordance with all provisions of law relating thereto. After four
33 months from the date of entry of the final judgment authorizing the
34 award of possession of any parcel of residential real property pursuant
35 to the provisions of this section, the presumption shall be conclusive.
36 No action to set aside such deed may be maintained unless the action is
37 commenced and a notice of pendency of the action is filed in the office
38 of the proper county clerk prior to the time that the presumption
39 becomes conclusive as aforesaid. Should any lawsuit or proceeding be
40 commenced to set aside a deed conveying to a third party a parcel of
41 residential real property pursuant to the provisions of this section,
42 such third party shall send to the attorney for the tax district within
43 ten days of their receipt a copy of any papers served on such third
44 party in such lawsuit or proceeding.
45 6. If the enforcing officer does not execute a deed conveying to the
46 tax district or to a third party a parcel of residential real property
47 within eight months after the entry of final judgment authorizing the
48 award of possession of such parcel pursuant to subdivision two of this
49 section, the enforcing officer shall direct the attorney for the tax
50 district to prepare and cause to be entered an order discontinuing the
51 in rem foreclosure action as to said property, canceling the notice of
52 pendency of such action as to said property and vacating and setting
53 aside said final judgment. The entry of such order shall restore all
54 parties, including owners, mortgagees and any and all lienors, receivers
55 and administrators and encumbrancers, to the status they held immediate-
56 ly before such final judgment was entered.
A. 5862 6
1 7. If the enforcing officer directs the attorney for the tax district,
2 pursuant to subdivision six of this section, to prepare and cause to be
3 entered an order discontinuing the in rem foreclosure action with
4 respect to a parcel of residential real property determined to be
5 distressed pursuant to section eleven hundred forty-two of this article,
6 the head of the department of housing shall evaluate the parcel deter-
7 mined to be distressed and take such action as he or she deems appropri-
8 ate under the programs, existing at the time of such evaluation, that
9 are designed to encourage the rehabilitation and preservation of exist-
10 ing housing, and shall monitor or cause to be monitored the status of
11 the property. The head of the department of housing shall maintain a
12 register of properties determined to be distressed.
13 § 1136-b. Governing body review of conveyance to a third party. The
14 enforcing officer shall, prior to the execution of a deed conveying full
15 and complete title of any parcel of residential real property to a third
16 party pursuant to subdivision three of section eleven hundred thirty-
17 six-a of this title, notify the governing body of the tax district in
18 which such residential real property is situated of the proposed convey-
19 ance. Within forty-five days of such notification, the governing body
20 may act by local law disapproving the proposed conveyance. In the event
21 the governing body does not act by local law within such forty-five day
22 period, the governing body shall be deemed to have approved the proposed
23 conveyance. During such forty-five day period or, if the governing body
24 acts by local law pursuant to this section, during the period of time
25 from the notification of the governing body to the presentation to the
26 chief executive officer of such tax district of such local law, the
27 eight-month period provided in subdivision three of section eleven
28 hundred thirty-six-a of this title shall be tolled.
29 § 3. This act shall take effect on the one hundred eightieth day after
30 it shall have become a law; provided, however, that effective immediate-
31 ly, the addition, amendment and/or repeal of any rule or regulation
32 necessary for the implementation of this act on its effective date are
33 authorized and directed to be made and completed on or before such
34 effective date.
