What's happening
This bill entitles former owners of residential or farm property to surplus proceeds from tax foreclosure sales and requires notification of such surplus.
Why it matters
Protects Equity for Former Owners. By entitling former owners of residential or farm property to surplus proceeds after a tax foreclosure sale, the bill ensures that individuals do not lose all their remaining property value after settling tax debts and associated fees, addressing concerns of fairness and financial security.
Establishes Trust and Retention Period. Surplus proceeds are to be held in trust by the county treasurer or commissioner of finance for at least three years, allowing former owners time to claim their funds and reducing the risk of unclaimed property being absorbed by local governments.
Mandates Clear Notification. Municipalities must notify former owners when their foreclosed property generated surplus proceeds, and provide clear instructions on how to claim these funds, which helps prevent uninformed loss and increases transparency in the foreclosure process.
Applies Statewide, Standardizing Practice. The law applies to all counties, cities, towns, and villages across New York, creating uniform standards and protections for property owners facing tax foreclosure, regardless of locality.
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Who cares
Headline styles
Return Surplus to Homeowners
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to local government
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8455
IN SENATE
May 8, 2018
Introduced by Sen. JACOBS -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the real property tax law, in relation to surplus proceeds from tax lien foreclosures
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1166 of the real property tax law is amended by adding a new subdivision 3 to read as follows:
3. (a) A former owner of residential or farm property, as defined in this article, shall be entitled to any surplus proceeds which result from the sale of such real property acquired by a tax entity through tax foreclosure proceedings. The term "surplus" shall mean the amount that is left after the property has been auctioned and all outstanding taxes, issues, payments for county tax and utility liens and administrative and other fees have been paid.
(b) In the event that a sale authorized under this section shall result in a surplus as to any piece or parcel of land offered at such sale, the enforcing officer shall report the fact of such surplus to the court which shall direct the enforcing officer to deposit such surplus in trust with the county treasurer or commissioner of finance for the benefit of whomsoever may be entitled to such surplus pursuant to this subdivision. Such surplus shall be retained for a period of at least three years.
(c) A municipality shall notify a property owner when the owner's property netted a surplus at a tax foreclosure auction that was held on or after the effective date of this subdivision. The notification shall be made as directed by the court and shall state the possible existence of a surplus, how to obtain the surplus and the steps the homeowner must take to obtain the surplus.
(d) Notwithstanding subdivision two of section eleven hundred four of this article, the provisions of this subdivision shall apply to all counties, cities, towns and villages in this state.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15744-01-8
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to surplus proceeds from tax lien foreclosures
Purpose
This bill entitles former owners of property to any surplus proceeds that result from the sale of property acquired by a tax entity through foreclosure proceedings
Summary of provisions
Section 1. Amends section 1166 of the real property tax law by adding a new subdivision 3 which provides that any tax entity who has acquired real property through tax foreclosure and which sale results in a surplus of funds shall make such surplus available to the former owner, this section further provides a definition for "surplus", and a means for such surplus to be claimed
Section 2. Is the enacting clause
Justification
Residents, who are in areas for taxes need to be held accountable, and if necessary, forfeit real property to settle outstanding payments. However, it is unfair that some municipalities have chosen through local option to retain one-hundred percent of the sale of a property obtained through a tax foreclosure, even when such sale results in a surplus. The municipality is entitled to taxes owed, and any cost associated with collecting such, but should be entitled to no more.
Legislative history
This is a new bill
Fiscal implications
None to the state
Effective date
This act shall take effect immediately
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.