senate Bill S4532

Relates to notices filed of the payment of mortgage recording tax on an instrument not entitled to be recorded

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 08 / Apr / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 21 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 21 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1645
  • 21 / Jun / 2013
    • SUBSTITUTED BY A4855

Summary

Relates to notices filed of the payment of mortgage recording tax on an instrument not entitled to be recorded; provides that such filing does not give notice of interest in real property.

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Bill Details

See Assembly Version of this Bill:
A4855
Versions:
S4532
Legislative Cycle:
2013-2014
Law Section:
Tax Law
Laws Affected:
Amd ยง258-a, Tax L

Sponsor Memo

BILL NUMBER:S4532

TITLE OF BILL: An act to amend the tax law, in relation to the
treatment of notices filed of the payment of mortgage recording tax on
an instrument not entitled to be recorded

PURPOSE: To clarify that a notice filed under Tax Law, including a
notice recorded under the authority of section 258-a, does not
constitute notice to a bona fide purchaser of an interest in real
property.

SUMMARY OF PROVISIONS: Section 1 of the bill amends section 258-a of
the tax law by amending that section to provide that the filing or
recording of a notice of payment of tax is Ineffective to give notice
under Article 9 of the real property law of an estate or interest in
the real property affected by the instrument on which tax is being
raid or to create a duty or inquiry with regard thereto. This
amendment would take effect immediately and shall apply to notices now
or hereafter filed or recorded under section 258-a

JUSTIFICATION: Under Tax Law Section 256-a, when mortgage recording
tax is being paid on an instrument not entitled to be recorded, but
which is not lost or destroyed, the tax may be paid to the recording
officer. A copy of the instrument upon which tax is paid "shall be
filed with the recording officer and preserved among his mortgage tax
records." If, however, the unrecorded instrument has been lost or
destroyed the State Department of Taxation and Finance determines the
amount of tax due and "by order authorize the recording officer to
receive and receipt for the tax as fully and with the same force and
affect, as far as this article is concerned, as if the instrument has
been duly recorded and the tax thereon paid." Section 258-a does not
require a recording officer to record a Section 258-a notice.
Accordingly, the section does not deal with issues of actual or
constructive notice to a bona fide purchaser if a Section 258-a notice
is recorded.

However, if a Section 258-a notice is recorded, as has recently been
done in a number of counties, the holder of the related, unrecorded
instrument may assert the priority of its lien claiming that an
otherwise bona fide purchaser for value has, by reason of the
recording of the Section 258-a notice, actual or constructive notice
of the instrument to which the notice relates. In addition to the
litigation that is likely to ensue until the courts rule on whether
the recording of a Section 258-a notice is notice under the Recording
Act or even appropriate to record, the recording of a Section 258-a
notice will impact the marketability of the title to real property
against which Section 258-a notices are recorded.

LEGISLATIVE HISTORY:; This is a new bill.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediately and shall apply to notices now or
hereafter filed.


view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4532

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 8, 2013
                               ___________

Introduced  by Sen. FLANAGAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to  the  treatment  of  notices
  filed  of  the  payment of mortgage recording tax on an instrument not
  entitled to be recorded

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1. Section 258-a of the tax law, as amended by chapter 218 of
the laws of 1930, is amended to read as follows:
  S 258-a. Payment of tax on instruments  not  recorded.  An  instrument
taxable under this article but which is not entitled to be recorded, may
nevertheless  be  presented  to  the  recording officer of the county in
which the real property or any part thereof affected by said  instrument
is situated, and there may be paid to such officer the amount of the tax
which  would  be  payable  under  this  article on the recording of such
instrument if the same were entitled to be recorded. Such officer  shall
receive  such  amount  and  such  payment  shall have the same force and
effect, so far as this article is concerned, as if such  instrument  had
been duly recorded and the tax thereon paid. It shall be the duty of the
recording  officer  to  indorse  upon  the  instrument a receipt for the
amount of the tax so paid. A copy of each instrument upon which the  tax
is  paid as above provided shall be filed with the recording officer and
preserved among his mortgage tax records.
  Where an unrecorded instrument subject to  the  tax  imposed  by  this
article  has  been lost or destroyed, the tax commission, upon presenta-
tion of proper proofs, may determine the taxable amount of such  instru-
ment and by order authorize the recording officer to receive and receipt
for such tax as fully and with the same force and effect, so far as this
article  is  concerned,  as if the instrument had been duly recorded and
the tax thereon paid.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08352-01-3

S. 4532                             2

  THE FILING OR RECORDING OF A NOTICE OF THE PAYMENT OF TAX  UNDER  THIS
SECTION  IS  INEFFECTIVE  TO  GIVE NOTICE UNDER ARTICLE NINE OF THE REAL
PROPERTY LAW OF ANY ESTATE OR INTEREST IN THE REAL PROPERTY AFFECTED  BY
THE INSTRUMENT ON WHICH TAX IS BEING PAID OR TO CREATE A DUTY OF INQUIRY
WITH REGARD THERETO.
  S  2.  This  act  shall take effect immediately and shall apply to all
notices filed prior to and on and after such effective date.

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