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

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.