Authorizes certain cities and villages to expedite foreclosure on substantially physically distressed and unoccupied residential, commercial or industrial properties

A. This expedited tax lien foreclosure proceeding will only apply to properties that are determined to be in "substantial physical distress". Under the criteria, the property must first, be in a rapid state of decay. Second, the property while dilapidated or in a structurally fragile state, could be economically secured and stabilized and ultimately restored. Third, if the building is allowed to continue to deteriorate, it would irreparably hinder future efforts to restore such building's historic, architectural or structural features.

B. Before such an expedited tax lien procedure could be used, the eligible city or village would need to conduct a public hearing and find that 9 criteria had been satisfied. Among the 9 criteria include that:

- the property is deemed to be in "substantial physical distress" as defined in A. above.

- the extent of the physical deterioration of the property must be examined.

- that the building is a danger to the public health, safety or welfare.

- the ability and willingness of the property owner to pay past due taxes and make repairs to secure and stabilize the structure.

- the historic, architectural, environmental or cultural significance of the property.

- the importance and urgency of the municipal interest in taking title to the property to preserve the historical, architectural or cultural character of the surrounding neighborhood.

Section 2: Amends Real Property Tax Law section 1110(2) to make a technical change to the law to give the municipality freedom not to accept title to the property in question if the property satisfies certain criteria.

Section 3: Effective Date.

Existing law

Under current law, municipalities must wait approximately 2 years for commercial property and 3 or 4 years for residential or farm properties before they can begin to take action to foreclose on a property to collect tax liens. In practice, this means that in certain situations, particularly with architecturally significant or otherwise historic or older structures, these valuable properties structurally degrade beyond the point where they can be economically secured and stabilized so that they can have any future viable use.

Justification

Under current law, municipalities must wait for a long period of time to foreclose on an architecturally significant or otherwise historic residential, commercial or industrial property that is currently unoccupied. Therefore, when the municipality ultimately obtains title, the building is often beyond repair due to neglect. However, if the municipality were allowed to step in at an earlier date, the older building could be stabilized in an economically reasonable fashion and ultimately rehabilitated for reuse. There are historical, citizens and other residents organizations that are anxious to quickly take title to certain unoccupied residential, commercial and industrial properties and rehabilitate them in a timely fashion for immediate reuse.

This bill will give municipalities and certain civic organizations the tools they need to quickly secure unoccupied buildings and rehabilitate them and bring them back on to the tax rolls. The alternative is to allow these structures to decay beyond the point of rehabilitation. Then the only choice a municipality has is to incur further expense to demolish these buildings and hope to find a buyer for small parcels of vacant urban land in neighborhoods that may not be attractive for such investors.

Legislative history

S.6229-A of 2004, Passed Senate in 2004, S.2353 of 2005/2006, S.428 of 2007/2008

Fiscal implications

None for the State of New York.

Local fiscal implications

This bill will aid municipalities in their efforts to collect real property tax revenue in a timely manner and allow municipalities to take title to properties that can be rehabilitated and returned to the tax rolls.

Effective date

Immediate.