S T A T E O F N E W Y O R K
2013-2014 Regular Sessions
I N S E N A T E
May 6, 2013
Introduced by Sen. BONACIC -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
AN ACT to authorize the city of Middletown to enter into a contract to
sell or pledge as collateral for a loan some or all of the delinquent
liens held by such city to a private party or engage a private party
to collect some or all of the delinquent tax liens held by it
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Notwithstanding any provision of any general, special or
local law to the contrary, the city of Middletown may enter into a
contract to sell some or all of the delinquent tax liens held by it to a
private party, subject to the following conditions:
(a) The consideration to be paid for a sale of the delinquent tax
liens held by it may be more or less than the face amount of the tax
(b) Property owners shall be given at least 30 days advance notice of
sale in the same form and manner as is provided by subdivision 2 of
section 1190 of the real property tax law. Failure to provide such
notice or the failure of the addressee to receive the same shall not in
any way affect the validity of any sale of a tax lien or tax liens or
the validity of the taxes or interest prescribed by law with respect
(c) The city of Middletown shall set the terms and conditions of the
contract of sale or loan.
(d) The tax lien purchaser must 30 days prior to the commencement of
any foreclosure action provide to the city of Middletown a list of liens
to be foreclosed. The city of Middletown may, at its sole option and
discretion, repurchase a lien or liens on the foreclosure list from the
tax lien purchaser. The repurchase price shall be the amount of the lien
or liens plus any accrued interest and collection fees incurred by the
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
S. 5022 2
tax lien purchaser through the date of repurchase. The tax lien purchas-
er shall provide the foreclosure list to the city of Middletown, along
with the applicable repurchase price of each lien, by certified mail,
and the city of Middletown shall have 30 days from receipt to notify the
tax lien purchaser of its option to purchase one or more of the liens.
If the city of Middletown opts to purchase the lien, it shall provide
payment within 30 days of receipt of the repurchase price of said lien
or liens. If the city of Middletown shall fail to repurchase the lien or
liens the tax lien purchaser shall have the right to commence a foreclo-
sure action immediately upon notice from the city of Middletown of its
refusal or at the expiration of the 30 day review period whichever
(e) The sale of a tax lien pursuant to this act shall not operate to
shorten the otherwise applicable redemption period or change the other-
wise applicable interest rate.
(f) Upon the expiration of the redemption period prescribed by law,
the purchaser of a delinquent tax lien, or its successors or assigns,
may foreclose the lien as in an action to foreclose a mortgage as
provided in section 1194 of the real property tax law. The procedure in
such action shall be the procedure prescribed by article 13 of the real
property actions and proceedings law for the foreclosure of mortgages.
At any time following the commencement of an action to foreclose a lien,
the amount required to redeem the lien, or the amount received upon sale
of a property, shall include reasonable and necessary collection costs,
attorneys' fees, legal costs, allowances, and disbursements.
(g) The provisions of title 5 of article 11 of the real property tax
law shall apply so far as is practicable to a contract for the sale of
tax liens pursuant to this act.
S 2. Notwithstanding any provision of any general, special or local
law to the contrary, the city of Middletown may enter into a contract to
pledge as collateral for a loan some or all of the delinquent tax liens
held by it to a third party or engage a third party to collect some or
all of the delinquent tax liens held by it subject to the following
(a) Any loan provided under this section shall bear an interest rate
to be determined by the city of Middletown.
(b) Any contract for the collection of delinquent tax liens the fee
paid by the city of Middletown shall not exceed 10% of the outstanding
balance of the tax lien being collected and said fee shall be borne by
the delinquent taxpayer.
S 3. This act shall take effect immediately.