senate Bill S7665

Relates to bids by the city of Buffalo for foreclosed property

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Sponsor

Bill Status


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

  • 27 / May / 2014
    • REFERRED TO LOCAL GOVERNMENT

Summary

Relates to bids by the city of Buffalo for foreclosed property.

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Bill Details

Versions:
S7665
Legislative Cycle:
2013-2014
Current Committee:
Senate Local Government
Law Section:
Real Property Tax Law
Laws Affected:
Amd ยง1120, RPT L

Sponsor Memo

BILL NUMBER:S7665

TITLE OF BILL: An act to amend the real property tax law, in relation
to bids by the city of Buffalo for foreclosed property

PURPOSE: To give the City of Buffalo preferred bid power at In Rem
Foreclosure Auctions.

SUMMARY OF PROVISIONS: This bill authorizes the City of Buffalo to
tender a bid at certain public sales in an amount equal to the total
amount of all municipal claims and liens which were the basis for the
judgment.Upon tendering such bid, the property shall be deemed sold to
the City, and the obligation of the City to perform in accordance with
such agreement shall be deemed to be in full satisfaction of the
municipal claim which was the basis for the judgment. The City takes
absolute title to the property sold, free and discharged of all tax
and municipal claims, liens, mortgaged, charges and estates of
whatever kind.

JUSTIFICATION: The City of Buffalo forecloses on several thousand
tax-delinquent properties each year through its In Rem Tax Foreclosure
process. Unfortunately, many properties are transferred from one
negligent landlord to another because the City has no preferred bid
status at its annual In Rem Foreclosure Auction. As with any other
interested party, the City must place the highest bid on a given
property in order to purchase it.

As a result of the City's inability to step into a position in front
of all other bidders to acquire problem properties at the auction,
certain neglected properties continue to cycle through ownership by
various unscrupulous landlords, who may even be relatives of the
delinquent owner who was originally foreclosed upon. This cycle
stymies productive reuse of the property and revitalization of the
surround neighborhood.

The City would benefit from being granted the same power that land
banks, such as the Buffalo Erie Niagara Land Improvement Corporation
(BENLIC), have. The Land Bank Act (Article 16 of the New York State
Not-For-Profit Corporation Law) empowers land banks to win a bid by
default at a public sale and in certain other circumstances, provided
that no municipality tenders a bid and that the land bank's bid is
greater than, or equivalent to, the total amount of all municipal
claims and liens which were the basis for the judgment.

This bill would provide a significant financial benefits for the City
of Buffalo:

* The City of Buffalo contains an estimated 20,000 vacant parcels and
5,000 vacant structures.Vacant and abandoned properties represent lost
revenue for the tax base, as well as huge expenses in the form of
health hazards, attracting illicit activity and demolition costs.
Last fiscal year the City contracted out an estimated 220 property
demolitions, at an average cost of more than $19,000 each.

* At the City's In Rem Foreclosure Auction in 2012, approximately
3,200 properties were listed. Since the City did not have preferred


bid power, it lost the occasion to pursue dozens of economic and
community development opportunities.

* The Land Bank Act specifically states that land banks' "super bid"
powers do not apply when a municipality tenders a bid on the property
in question.Therefore, BENLIC would not be adversely affected by
authorizing the City of Buffalo to exercise preferred bids in the
limited context of the City's own annual In Rem Foreclosure Auction.
Additionally, the City and its residents would stand to benefit
immensely as "problem properties" could be efficiently removed from
their previous cycle of neglect and finally turned over to
conscientious property owners.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: None to New York state.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  7665

                            I N  S E N A T E

                              May 27, 2014
                               ___________

Introduced  by Sen. GRISANTI -- 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  bids  by  the
  city of Buffalo for foreclosed property

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

  Section 1. Section 1120 of the real property tax  law  is  amended  by
adding a new subdivision 3 to read as follows:
  3.  AT  A  PUBLIC  SALE  PURSUANT  TO THE PROVISIONS OF SECTION ELEVEN
HUNDRED SIXTY-SIX OF THIS ARTICLE OR SALE PURSUANT TO THE PROVISIONS  OF
A COUNTY CHARTER, CITY CHARTER, ADMINISTRATIVE CODE, OR SPECIAL LAW WHEN
APPLICABLE  UNDER  SECTION ELEVEN HUNDRED FOUR OF THIS ARTICLE, THE CITY
OF BUFFALO MAY TENDER A BID AT SUCH SALE IN AN AMOUNT EQUAL TO THE TOTAL
AMOUNT OF ALL MUNICIPAL CLAIMS AND LIENS WHICH WERE THE  BASIS  FOR  THE
JUDGMENT.  IN THE EVENT OF SUCH TENDER BY THE CITY OF BUFFALO, THE PROP-
ERTY SHALL BE DEEMED SOLD TO THE CITY OF BUFFALO REGARDLESS OF ANY  BIDS
BY  ANY  OTHER  THIRD  PARTIES. THE OBLIGATION OF THE CITY OF BUFFALO TO
PERFORM IN ACCORDANCE WITH SUCH AGREEMENT SHALL BE DEEMED TO BE IN  FULL
SATISFACTION  OF  THE  MUNICIPAL CLAIM WHICH WAS THE BASIS FOR THE JUDG-
MENT. THE CITY OF BUFFALO, AS PURCHASER AT  SUCH  PUBLIC  SALE  OR  SALE
PURSUANT  TO  THE PROVISIONS OF A COUNTY CHARTER, CITY CHARTER, ADMINIS-
TRATIVE CODE, OR  SPECIAL  LAW  WHEN  APPLICABLE  UNDER  SECTION  ELEVEN
HUNDRED FOUR OF THIS ARTICLE, SHALL TAKE AND FOREVER THEREAFTER HAVE, AN
ABSOLUTE  TITLE TO THE PROPERTY SOLD, FREE AND DISCHARGED OF ALL TAX AND
MUNICIPAL CLAIMS, LIENS, MORTGAGES,  CHARGES  AND  ESTATES  OF  WHATEVER
KIND.  THE  DEED  TO THE CITY OF BUFFALO SHALL BE EXECUTED, ACKNOWLEDGED
AND DELIVERED WITHIN THIRTY DAYS OF THE SALE. ALL CITY OF BUFFALO DISPO-
SITIONS OF PROPERTY ACQUIRED PURSUANT TO THIS SUBDIVISION  SHALL  COMPLY
WITH THE LAWS OF THE CITY OF BUFFALO REGARDING DISPOSITION OF REAL PROP-
ERTY.
  S 2. This act shall take effect immediately.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15305-01-4

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