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

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.

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.

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

This legislation will permit certain "surplus" funds - amounts received when a property is sold at local tax foreclosure in excess of the amount of the municipality's tax lien - to be retained by the City of Buffalo.

Currently, the City of Buffalo is struggling financially, to such a degree that the State Legislature authorized a control board to oversee their fiscal condition. By permitting the City to retain "surplus" funds described previously, the state would in effect assist the City by providing sorely needed new revenues. These new revenues would enable the City to avoid, or at least minimize, the need for new taxes in order to meet their financial obligations. This bill will enhance the ability of the City of Buffalo to more quickly address redevelopment and preservation issues.

Legislative history

2004: Similar bill. (S.5806-B/A.9482) Passed Assembly 6/22/04 2005-06: S.2983/A.5936 No action. 2007-08: S.2804 Referred to Local Government FISCAL IMPLICATIONS :

To be determined.

Local fiscal implications

Positive for the City of Buffalo.

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.