senate Bill S6817A

2011-2012 Legislative Session

Provides that a private third party may contract with a property owner to pay real property taxes in exchange for transfer of liens on the property to the transferee

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 12, 2012 print number 6817c
amend and recommit to finance
Jun 04, 2012 print number 6817b
amend and recommit to finance
May 02, 2012 reported and committed to finance
Apr 11, 2012 print number 6817a
amend (t) and recommit to local government
Mar 26, 2012 referred to local government

Votes

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May 2, 2012 - Local Government committee Vote

S6817A
5
0
committee
5
Aye
0
Nay
3
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Local Government Committee Vote: May 2, 2012

Bill Amendments

Original
A
B
C (Active)
Original
A
B
C (Active)

Co-Sponsors

S6817 - Bill Details

See Assembly Version of this Bill:
A9990
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Add Art 9 Title 4-B §§977 - 977-g, RPT L; amd §§6403 & 6406, Ins L

S6817 - Bill Texts

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Provides that a private third party may contract with a property owner to pay real property taxes in exchange for transfer of liens on the property to the transferee.

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BILL NUMBER:S6817

TITLE OF BILL:
An act
to amend the real property tax law, in relation to local
government liens and payment
contracts

PURPOSE OR GENERAL IDEA OF BILL:
Under this bill, a property owner may authorize a third party to pay
the owner's property taxes. In exchange for the third party paying
the taxing district the full amount of taxes and associated penalties
and interest, the tax collector transfers the tax lien to the third
party payor. The property owner then repays the transferee over time
under agreed-upon, more flexible terms. This bill accomplishes two
important purposes: (1) increases local government tax collections
and (2) allows property owners flexibility in meeting the burden of
paying their property taxes.

Under this bill, a local government will receive funds that it might
otherwise have to wait on or recover through an in rem foreclosure
action. This legislation will help local governments across the state
that are struggling to balance their budgets and seeking to minimize
foreclosures.

The legislation also benefits New York property owners because it
gives property owners the opportunity to pay their taxes over time.
Property owners could obtain manageable repayment agreements instead
of having to make a single lump sum payment - a meaningful benefit in
this difficult economy. These benefits accrue to both homeowners who
want to keep their homes and commercial property owners who want to
keep their business properties, preserve jobs, and expand their
businesses with cash on hand.

The bill also provides various protections for homeowners and
commercial property owners, including a maximum allowable interest
rate, pre-enforcement notice requirements, change of servicer notice,
annual notice to borrower with status of account, and a lien
repayment and release option.
These provisions are much more consumer-oriented and protective than
current options. For example, a taxing district currently has the
option to conduct an in rem foreclosure on a tax-delinquent property
a much speedier process.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 is the Legislative intent of the bill.

Section 2 Establishes Title 4-B of the Real Property Tax Law relating
to Lien Payment Contracts

Section 3 is the effective date.

STATEMENT IN SUPPORT:

Local governments rely heavily on property taxes to fund their
services, but property owners have found it increasingly difficult to
comply with the strict statutory requirements for paying their taxes.
The result is that local governments must rely on increased
foreclosures or bulk lien sales to collect their taxes. The property
owners thus are faced with either the possibility of foreclosure or
repaying an unknown third party.

This bill does not create any new liens or obligations for property
owners; instead, it gives them the option of authorizing the transfer
of their existing tax liens from the public entity to a private one.
The owner will have the ability to negotiate and approve the
repayment terms before the transferee ever makes the payment to the
tax collector and the transferee will not be allowed to add on
excessive fees, costs, or interest to the amount the owner owes. The
legislation would have no effect on local governments' ability to
utilize bulk tax lien sales.

The result will be increased tax collections, fewer lien foreclosures,
and increased financial flexibility for New York property owners.

PRIOR LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None to the state but improved tax collections for tax districts.

EFFECTIVE DATE:
This act shall become effective on the ninetieth day after it becomes
law.

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

                                  6817

                            I N  S E N A T E

                             March 26, 2012
                               ___________

Introduced  by  Sen. MAZIARZ -- 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 local  govern-
  ment liens and payment contracts

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

  Section 1.  Legislative  intent.  The  legislature  finds  that  local
governments  are struggling under the weight of increased costs, reduced
revenues and increased stresses on their respective budgets. The  legis-
lature  also  finds that property owners are struggling under the weight
of high property taxes and other local government assessments  and  need
assistance  in  paying  those amounts in order to prevent foreclosure or
the sale of the liens to third parties  involuntarily.  The  legislature
finds  that it is in the best interests of the residents of the state of
New York and the local governments to allow property owners to voluntar-
ily enter into agreements with  private  entities  whereby  the  private
parties  assume  the  position  of the local governments for assessments
such as property taxes and water and sewer charges. Currently,  property
owners  are required to pay these assessments in full. Allowing property
owners to increase the payment term will help alleviate the pressure  on
these already financially stressed residents and business owners.  More-
over,  local  governments  will  increase  their revenue collections and
spend less on actions such as tax lien sales and  lien  foreclosures  to
collect  unpaid liens, because the lien payors will pay the liens to the
local governments in full, all at once.
  S 2. Article 9 of the real property tax law is amended by adding a new
title 4-B to read as follows:
                                 TITLE 4-B
                         LIEN PAYMENT CONTRACTS
SECTION 977. DEFINITIONS.
        977-A. LIEN TRANSFER.
        977-B. LIEN TRANSFER AUTHORIZATION.
        977-C. LIEN TRANSFER CERTIFICATE.
        977-D. LIEN PAYMENT CONTRACT.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15093-01-2

S. 6817                             2

        977-E. ENFORCEMENT.
        977-F. LIEN REPAYMENT AND RELEASE.
        977-G. COLLECTION OF LIEN INFORMATION.
  S  977.  DEFINITIONS.  AS USED IN THIS TITLE THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  1. "TAXING DISTRICT" SHALL MEAN ANY LOCAL GOVERNMENT  ENTITY,  INCLUD-
ING,  ANY  CITY,  TOWN,  VILLAGE,  COUNTY,  SCHOOL  DISTRICT  OR SPECIAL
DISTRICT, THAT IMPOSES TAXES, SPECIAL AD VALOREM LEVIES, WATER OR  SEWER
CHARGES OR SPECIAL ASSESSMENTS ON REAL PROPERTY.
  2.  "LIEN  PAYMENT"  MEANS  THE  AMOUNT  OF MONEY ADVANCED TO A TAXING
DISTRICT ON BEHALF OF A PROPERTY OWNER IN CONSIDERATION FOR THE TRANSFER
OF LIENS FOR PROPERTY TAXES OR WATER OR SEWER  CHARGES  ON  THE  OWNER'S
REAL PROPERTY PURSUANT TO A LIEN TRANSFER AUTHORIZATION AND LIEN PAYMENT
CONTRACT.
  3.  "LIEN  TRANSFER AUTHORIZATION" SHALL HAVE THE MEANING AS SET FORTH
IN SECTION NINE HUNDRED SEVENTY-SEVEN-B OF THIS TITLE.
  4. "LIEN TRANSFER CERTIFICATE" SHALL HAVE THE MEANING AS SET FORTH  IN
SECTION NINE HUNDRED SEVENTY-SEVEN-C OF THIS TITLE.
  5.  "LIEN  PAYMENT CONTRACT" SHALL MEAN A WRITTEN CONTRACT BETWEEN THE
TRANSFEREE AND THE PROPERTY OWNER AS SET FORTH IN SECTION  NINE  HUNDRED
SEVENTY-SEVEN-D OF THIS TITLE.
  6.  "REFEREE'S  DEED" SHALL MEAN THE DEED ISSUED TO THE PURCHASER AT A
FORECLOSURE SALE AT THE COURTHOUSE STEPS.
  7. "TRANSFEREE" MEANS A PERSON WHO ADVANCES MONEY DIRECTLY TO A TAXING
DISTRICT AT THE REQUEST OF A PROPERTY OWNER  IN  CONSIDERATION  FOR  THE
TRANSFER OF LIENS ON THE OWNER'S REAL PROPERTY.
  S  977-A. LIEN TRANSFER. 1. A PROPERTY OWNER MAY EXECUTE A DOCUMENT AS
DETAILED HEREIN IN THE  FORM  OF  A  LIEN  TRANSFER  AUTHORIZATION  THAT
CONSENTS  TO AND AUTHORIZES THE TRANSFER OF A TAXING DISTRICT'S LIENS ON
THE OWNER'S REAL PROPERTY TO A TRANSFEREE WHEN  THE  TRANSFEREE  TENDERS
THE LIEN PAYMENT TO THE TAXING DISTRICT ON BEHALF OF THE PROPERTY OWNER.
  2. WITHIN THIRTY DAYS OF RECEIPT BY THE TAXING DISTRICT OF THE PROPER-
TY  OWNER'S  LIEN  TRANSFER  AUTHORIZATION AND THE LIEN PAYMENT FROM THE
TRANSFEREE, THE TAXING DISTRICT SHALL EXECUTE A  LIEN  TRANSFER  CERTIF-
ICATE ACKNOWLEDGING THAT THE REAL PROPERTY LIENS ON THE SUBJECT PROPERTY
ARE  TRANSFERRED  TO  THE  TRANSFEREE.  THE LIEN TRANSFER CERTIFICATE AS
DETAILED IN SECTION NINE HUNDRED SEVENTY-SEVEN-C  OF  THIS  TITLE  SHALL
CERTIFY  THAT  THE TAXING DISTRICT RECEIVED THE PROPERTY OWNER'S WRITTEN
AUTHORIZATION TO TRANSFER THE LIENS; THAT THE TRANSFEREE PAID  THE  LIEN
PAYMENT;  AND  THAT  THE  TAXING DISTRICT'S LIENS ARE TRANSFERRED TO THE
TRANSFEREE IN THE AMOUNTS LISTED IN THE LIEN TRANSFER CERTIFICATE.
  3. IN ADDITION TO THE RIGHTS PROVIDED UNDER THE LIEN PAYMENT CONTRACT,
THE TRANSFEREE AND ITS HEIRS AND ASSIGNS, SHALL  BE  SUBROGATED  TO  AND
HAVE  ALL  OF THE RIGHTS, REMEDIES AND PRIORITIES AS THE TAXING DISTRICT
UNDER APPLICABLE STATE OR FEDERAL LAW, SUBJECT ONLY  TO  THE  TERMS  AND
CONDITIONS  OF  THIS  SECTION  AND  THE  LIEN PAYMENT CONTRACT. THE LIEN
TRANSFER CERTIFICATE MAY NOT PERMIT THE TRANSFEREE TO ACT UPON THE  LIEN
REPRESENTED  BY  THE LIEN TRANSFER CERTIFICATE EXCEPT FOR ACTIONS NECES-
SARY TO DEFEND OR ENFORCE THE LIEN OR TO COLLECT  THE  AMOUNTS  OWED  AS
PROVIDED FOR IN THE LIEN TRANSFER CERTIFICATE, THE LIEN PAYMENT CONTRACT
AND THIS SECTION.
  4.  THE  LIEN  TRANSFER  CERTIFICATE  SHALL  BE RECORDED IN ANY COUNTY
CLERKS' OFFICE WHERE THE PROPERTY IS SITUATED AND THE  TRANSFEREE  SHALL
PAY  ANY  STATUTORY FEE FOR SAID RECORDING.  FAILURE TO COMPLY WITH THIS
PROVISION HAS NO EFFECT ON THE VALIDITY OF THE TRANSFERRED LIEN  OR  THE
ENFORCEABILITY OF THE LIEN PAYMENT CONTRACT.

S. 6817                             3

  S  977-B.  LIEN  TRANSFER  AUTHORIZATION.  1. A DOCUMENT BY A PROPERTY
OWNER AUTHORIZING THE TRANSFER  OF  LIENS  MUST  CONTAIN  THE  FOLLOWING
INFORMATION AND BE IN SUBSTANTIALLY THE FOLLOWING FORM:
  LIEN TRANSFER AUTHORIZATION PURSUANT TO REAL PROPERTY TAX LAW SECTION
                                  977-B
PROPERTY OWNER:
PARCEL IDENTIFICATION:
YEARS:
AMOUNT  DUE: (INCLUDE AMOUNT OF ORIGINAL LIEN PLUS ALL ASSOCIATED PENAL-
TIES, INTEREST, COSTS AND FEES)
ACCOUNT NUMBER OR IDENTIFICATION CODE:
     I (NAME OF OWNER(S) OR OWNER'S  AUTHORIZED  REPRESENTATIVE)  OWN(S)
THE  REAL  PROPERTY  LOCATED  IN  THE  COUNTY  OF  (INSERT COUNTY NAME),
("TAXING DISTRICT") WITH THE STREET ADDRESS KNOWN AS AND AS  MORE  FULLY
DESCRIBED  BY  ITS  LEGAL  DESCRIPTION  AS:  (INSERT  STREET  AND  LEGAL
ADDRESSES). PURSUANT TO SECTION 977-B OF THE REAL PROPERTY  TAX  LAW,  I
HEREBY AUTHORIZE THE TREASURER (TAX COLLECTOR, COMPTROLLER, REAL PROPER-
TY  DIRECTOR)  TO TRANSFER THE LIEN(S) HELD ON THE PROPERTY LISTED ABOVE
TO (NAME OF PERSON OR ENTITY) ("TRANSFEREE"). I HEREBY AUTHORIZE  TRANS-
FEREE  TO  ADVANCE FUNDS IN CONSIDERATION FOR THE TRANSFER OF THE TAXING
DISTRICT'S LIEN(S) IN AN AMOUNT EQUAL TO THE LIEN BALANCE, INCLUDING ALL
TAXES, PENALTIES, INTEREST, COLLECTION  COSTS  AND  OTHER  LIEN  CHARGES
IMPOSED  BY THE TAXING DISTRICT ON THE REAL PROPERTY DESCRIBED ABOVE FOR
THE YEARS AS LISTED HEREIN:   (LIST  TAX  YEARS,  TAX  AMOUNTS  AND  TAX
CERTIFICATE NUMBER(S)).
     I  FURTHER AUTHORIZE AND DIRECT THE TAXING DISTRICT TO ISSUE A LIEN
RECEIPT WITH THE TAXING DISTRICT'S SEAL TO THE TRANSFEREE AND TO CERTIFY
1) RECEIPT OF PAYMENT FROM THE TRANSFEREE ON BEHALF OF THE OWNER; AND 2)
TRANSFER OF THE LIEN(S) ON THE OWNER'S PROPERTY TO THE TRANSFEREE.
_______________________________
(OWNER(S) OR AUTHORIZED REPRESENTATIVE)
SUBSCRIBED AND SWORN TO BEFORE ME
ON THIS, THE ____ DAY OF __________,
20____ BY (INSERT NAME OF SIGNER.)
__________________________________
NOTARY PUBLIC, STATE OF NEW YORK
DATE SIGNED (INSERT NOTARY'S SEAL)
  2. IF THE PROPERTY OWNER AUTHORIZES THE TRANSFER OF LIENS FOR MULTIPLE
YEARS OR FOR  MULTIPLE  PROPERTY  LIENS  ASSESSED  BY  THE  SAME  TAXING
DISTRICT,  THE  AUTHORIZATION  FOR ALL OF THE LIENS MAY BE COMBINED INTO
ONE FORM.
  S 977-C. LIEN TRANSFER CERTIFICATE. 1. A  CERTIFIED  STATEMENT  ISSUED
UNDER THIS SECTION BY A TAXING DISTRICT FOR THE PURPOSE OF MEMORIALIZING
THE TRANSFER OF A LIEN SHALL CONTAIN THE FOLLOWING INFORMATION AND SHALL
BE IN SUBSTANTIALLY THE FOLLOWING FORM:
     LIEN TRANSFER CERTIFICATE PURSUANT TO SECTION 977-C OF THE REAL
                            PROPERTY TAX LAW
PROPERTY   DESCRIPTION:  (INSERT  PHYSICAL  ADDRESS  AS  WELL  AS  LEGAL
DESCRIPTION)
TAX OR PROPERTY ACCOUNT NUMBER:
YEAR(S) OF LIEN ASSESSMENT: (INSERT YEAR(S) OF LIENS TRANSFERRED)
TAXING DISTRICT(S):
AMOUNTS PAID: (AMOUNT OF LIEN AND ANY LIEN CERTIFICATE(S) TRANSFERRED)
TAX CERTIFICATE NUMBER: TRANSFEREE: (INSERT NAME OF TRANSFEREE)
     I, (INSERT NAME), (TITLE, E.G.,  TREASURER,  TAX  COLLECTOR,  COMP-
TROLLER,  REAL PROPERTY DIRECTOR) FOR (TAXING DISTRICT(S), E.G., COUNTY,

S. 6817                             4

CITY, VILLAGE, TOWN), CERTIFY THAT I HAVE  RECEIVED  AUTHORIZATION  FROM
THE  OWNER(S)  OF  THE  PROPERTY  OR  PROPERTIES LISTED ABOVE (OR ON THE
ATTACHED EXHIBIT) TO TRANSFER  THE  LIEN(S)  TO  THE  TRANSFEREE  LISTED
ABOVE; THAT TRANSFEREE HAS TENDERED THE AMOUNTS PAID TO THE NAMED TAXING
DISTRICTS  ON  THE  PROPERTY  AS  CONSIDERATION  FOR  A  TRANSFER OF THE
LIEN(S); AND THAT THE LIEN(S) HELD BY TAXING DISTRICTS ON  THE  PROPERTY
FOR  THE  YEARS  LISTED  ABOVE  ARE  HEREBY TRANSFERRED TO TRANSFEREE IN
ACCORDANCE WITH REAL PROPERTY TAX LAW SECTION 977-C.  I  HAVE  ISSUED  A
RECEIPT  TO TRANSFEREE IN CONJUNCTION WITH THIS CERTIFICATION REFLECTING
THE PAYMENT FOR THE TRANSFER IN THE AMOUNT OF TAXES,  PENALTIES,  INTER-
EST, AND COLLECTION COSTS DUE.
__________________________________________
(SIGNATURE  OF  TREASURER  (TAX  COLLECTOR,  COMPTROLLER,  REAL PROPERTY
DIRECTOR)
SEAL OF TAXING DISTRICT                    DATE: ____________
(IF NO SEAL OF OFFICE CAN BE PROVIDED, SIGNATURE SHOULD BE NOTARIZED.)
  2. IF A PROPERTY OWNER AUTHORIZES THE TRANSFER OF PROPERTY  LIENS  FOR
MULTIPLE  YEARS  OR FOR MULTIPLE LIENS ASSESSED OR COLLECTED BY THE SAME
TAXING DISTRICT, THE STATEMENT CERTIFYING  THE  TRANSFER  OF  THE  LIENS
SHALL BE COMBINED INTO ONE FORM.
  3.  A  TAXING DISTRICT MAY CHARGE A REASONABLE FEE NOT TO EXCEED TWEN-
TY-FIVE DOLLARS FOR EACH STATEMENT CERTIFYING THE TRANSFER OF THE  LIENS
ON PROPERTY.
  S  977-D.  LIEN PAYMENT CONTRACT. 1. A PROPERTY OWNER MAY ENTER INTO A
LIEN PAYMENT CONTRACT WITH A TRANSFEREE. THE LIEN PAYMENT CONTRACT SHALL
SET FORTH SUCH TERMS AND CONDITIONS TO  WHICH  THE  TRANSFEREE  AND  THE
PROPERTY  OWNER  MAY AGREE REGARDING THE PAYMENT OF THE TRANSFERRED LIEN
TO THE TRANSFEREE.
  2. THE TRANSFERRED LIEN SHALL SECURE ALL AMOUNTS OWED AS PERMITTED  BY
THE LIEN PAYMENT CONTRACT AND THIS SECTION.
  3.  ANY  FEES  TO EFFECT THE TRANSFER OF A LIEN OR TO SERVICE A TRANS-
FERRED LIEN MAY, AT THE PROPERTY OWNER'S REQUEST AND WRITTEN CONSENT, BE
INCLUDED IN AND MADE A PART OF THE AMOUNTS OWED UNDER THE  LIEN  PAYMENT
CONTRACT.  IF THE SUBJECT PROPERTY IS OWNED AND OCCUPIED BY THE PROPERTY
OWNER AS THE OWNER'S PRINCIPAL RESIDENCE, ADDITIONAL CHARGES  TO  EFFECT
THE  TRANSFER  SHALL  BE  LIMITED  AS FOLLOWS: AN APPLICATION FEE NOT TO
EXCEED TWO HUNDRED FIFTY DOLLARS, FEES FOR TITLE CHARGES NOT  TO  EXCEED
FOUR  HUNDRED  DOLLARS,  REASONABLE AND CUSTOMARY ATTORNEY'S FEES NOT TO
EXCEED ONE THOUSAND DOLLARS AND REASONABLE AND CUSTOMARY  CLOSING  COSTS
NOT  TO  EXCEED FIVE HUNDRED DOLLARS. ALL COSTS AND FEES ASSOCIATED WITH
ENFORCING THE RIGHTS OF THE TRANSFEREE  UNDER  THE  TERMS  OF  THE  LIEN
PAYMENT CONTRACT AND THIS SECTION ALSO MAY BE INCLUDED IN THE AMOUNT DUE
UNDER  THE LIEN PAYMENT CONTRACT AND MAY BE LIMITED BY A COURT OF COMPE-
TENT JURISDICTION. THE LIEN PAYMENT CONTRACT MAY ALSO  PROVIDE  THAT  IN
THE EVENT THAT THE PROPERTY OWNER INITIATES A BANKRUPTCY PROCEEDING, THE
TRANSFEREE  SHALL  BE ENTITLED TO RECOVER ALL FEES AND COSTS INCURRED IN
PROTECTING ITS RIGHTS IN THE PROCEEDING.
  4. THE TRANSFEREE MAY COLLECT INTEREST ON THE AMOUNTS OWED  UNDER  THE
LIEN  PAYMENT  CONTRACT  AT  THE  RATE OF INTEREST CHARGED ON DELINQUENT
LIENS BY THE TAXING DISTRICT THAT TRANSFERRED THE LIEN, EXCEPT THE  RATE
OF  INTEREST  COLLECTED  BY  THE  TRANSFEREE  SHALL  NOT  EXCEED ONE AND
ONE-HALF PERCENT PER MONTH REGARDLESS OF THE INTEREST  RATE  CHARGED  ON
THE  DELINQUENT  LIENS BY THE TAXING DISTRICT THAT TRANSFERRED THE LIEN.
THE AMOUNT OWED MAY INCLUDE TAXES, PENALTIES, INTEREST, FEES  AND  COSTS
AS  AGREED  TO BETWEEN THE PROPERTY OWNER AND THE TRANSFEREE IN THE LIEN
PAYMENT CONTRACT, BUT MAY NOT INCLUDE FUNDS  ADVANCED  TO  THE  PROPERTY

S. 6817                             5

OWNER FOR ANY OTHER PURPOSE. IF THE PROPERTY OWNER OWNS AND OCCUPIES THE
SUBJECT  PROPERTY  AS  THE OWNER'S PRINCIPAL RESIDENCE, THE LIEN PAYMENT
CONTRACT MAY NOT CONTAIN A PENALTY FOR EARLY PAYMENT OF THE AMOUNTS OWED
UNDER THE LIEN PAYMENT CONTRACT.
  5. NOTHING CONTAINED IN THIS SECTION SHALL BE DEEMED TO CREATE A MORT-
GAGE,  NOTE OR OTHER INSTRUMENT OR LIEN GOVERNED BY ANY STATE OR FEDERAL
LAW REGULATING MORTGAGE AGREEMENTS, NOR SHALL THE AMOUNT OWED UNDER  THE
LIEN  PAYMENT CONTRACT BE CONSIDERED DEBT FOR PERSONAL, FAMILY OR HOUSE-
HOLD PURPOSES. THE LIEN PAYMENT CONTRACT SHALL BE DEEMED A CONTRACT  FOR
THE  PAYMENT  OF  AMOUNTS OWING TO LOCAL TAXING DISTRICTS AND ASSOCIATED
OBLIGATIONS AND SHALL BE GOVERNED BY THIS TITLE AND  GENERAL  PRINCIPLES
OF  CONTRACT  LAW,  EXCEPT  FOR THE FORECLOSURE OF THE TRANSFERRED LIEN,
WHICH IS SUBJECT TO THE RULES AND REGULATIONS GOVERNING  MORTGAGE  FORE-
CLOSURES AS DETAILED IN THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  6.  ONCE A YEAR, BUT NO LATER THAN THE FIRST OF FEBRUARY OF EACH YEAR,
THE TRANSFEREE SHALL PROVIDE A STATEMENT  OF  ACCOUNT  TO  THE  PROPERTY
OWNER.  EACH  STATEMENT OF ACCOUNT SHALL INCLUDE NAME, ADDRESS AND TELE-
PHONE NUMBER OF THE SERVICER OF THE LIEN  PAYMENT  CONTRACT;  THE  TOTAL
AMOUNT  PAID  IN  THE  PRIOR CALENDAR YEAR; THE TOTAL AMOUNT OF INTEREST
PAID FOR THAT YEAR; AND THE AMOUNT REMAINING TO BE PAID UNDER  THE  LIEN
PAYMENT CONTRACT.
  7.  IF THE PERSON OR ENTITY SERVICING THE LIEN PAYMENT CONTRACT CHANG-
ES, THE TRANSFEREE SHALL SEND WRITTEN NOTICE TO THE  PROPERTY  OWNER  OF
THE  NAME,  ADDRESS AND TELEPHONE NUMBER OF THE NEW LIEN SERVICER WITHIN
TEN BUSINESS DAYS OF THE CHANGE IN ADMINISTRATION.
  S 977-E. ENFORCEMENT. 1. THE TRANSFEREE MAY FILE AN ACTION TO  ENFORCE
THE  TERMS  AND  CONDITIONS OF THE TRANSFERRED LIEN AND THE LIEN PAYMENT
CONTRACT, THE TRANSFEREE SHALL ENFORCE SAID CONTRACT PURSUANT TO ARTICLE
THIRTEEN OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  2. THE TRANSFEREE IS ENTITLED  TO  RECOVER  REASONABLE  AND  CUSTOMARY
COSTS  AND  FEES TO FORECLOSE OR ENFORCE THE TRANSFERRED LIEN. THE COSTS
AND FEES MUST BE APPROVED BY A COURT OF COMPETENT JURISDICTION  AND  THE
PROPERTY  TAX  PAYOR MAY BE REQUIRED TO SUBMIT PROOF OF THEIR INCURRENCE
TO THE COURT. RECOVERABLE FEES AND COSTS MAY INCLUDE:
  (A) ATTORNEY'S FEES;
  (B) CHARGES TO VERIFY OWNERSHIP OF THE PROPERTY, NOT  TO  EXCEED  FOUR
HUNDRED DOLLARS;
  (C)  FEES  FOR RECORDING NOTICES AND DOCUMENTS RELATED TO THE FORECLO-
SURE;
  (D) COSTS OF PROVIDING NOTICE, INCLUDING SERVICE OF PROCESS AND ADVER-
TISEMENT; AND
  (E) OTHER FEES AND COSTS LEGALLY REQUIRED TO FORECLOSE OR  TO  ENFORCE
THE TRANSFERRED LIEN.
  3.  A  FORECLOSURE  OF  A LIEN TRANSFERRED AS PROVIDED BY SECTION NINE
HUNDRED SEVENTY-SEVEN-A OF THIS TITLE MAY NOT BE INSTITUTED  WITHIN  ONE
YEAR  FROM THE LATEST DATE ON WHICH THE LIEN IS RECORDED IN ALL COUNTIES
IN WHICH THE PROPERTY IS  LOCATED,  UNLESS  THE  LIEN  PAYMENT  CONTRACT
BETWEEN THE OWNER OF THE PROPERTY AND THE TRANSFEREE PROVIDES OTHERWISE.
  4.  NOTHING  IN THIS SECTION SHALL BE DEEMED TO AFFECT THE RIGHTS OF A
TAXING DISTRICT UNDER ARTICLE ELEVEN OF THIS CHAPTER.
  S 977-F. LIEN REPAYMENT AND RELEASE. 1. THE PROPERTY OWNER MAY  OBTAIN
A  RELEASE  OF  THE TRANSFERRED LIEN BY PAYING THE TRANSFEREE THE AMOUNT
DUE UNDER THE LIEN PAYMENT CONTRACT AT ANY  TIME  AFTER  THE  TRANSFEREE
FILES  A  LIS PENDENS IN CONNECTION WITH A FORECLOSURE PROCEEDING OF THE
SUBJECT PROPERTY.

S. 6817                             6

  2. A PRIOR RECORDED FIRST LIEN MORTGAGEE MAY OBTAIN A RELEASE  OF  THE
TRANSFERRED  LIEN BY PAYING THE TRANSFEREE THE AMOUNT DUE UNDER THE LIEN
PAYMENT CONTRACT:
  (A) AT ANY TIME AFTER THE TRANSFEREE FILES A LIS PENDENS IN CONNECTION
WITH A FORECLOSURE PROCEEDING OF THE SUBJECT PROPERTY;
  (B)  UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT STATING THAT THE PROP-
ERTY OWNER IS NINETY DAYS OR MORE  DELINQUENT  IN  THE  PAYMENT  OF  THE
OWNER'S FIRST LIEN MORTGAGE;
  (C) UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT FROM THE PROPERTY OWNER
AUTHORIZING THE PAYMENT AND RELEASE; OR
  (D) AT THE TRANSFEREE'S DISCRETION.
  3.  IF  A  TRANSFEREE  FORECLOSES  ON A TRANSFERRED LIEN, THE PROPERTY
OWNER OR THE SERVICER OF A PRIOR RECORDED FIRST LIEN MORTGAGE  IS  ENTI-
TLED  TO  COMPEL CONVEYANCE OF THE FORECLOSED PROPERTY FROM THE OWNER AT
THE TIME OF CONVEYANCE BY PAYING THE OWNER AT THE TIME OF CONVEYANCE:
  (A) ONE HUNDRED TWENTY PERCENT OF THE AMOUNT PAID BY THE PURCHASER  AT
THE FORECLOSURE SALE; AND
  (B)  THE  AMOUNT  REASONABLY SPENT BY THE PURCHASER IN CONNECTION WITH
THE MAINTENANCE AND SAFE KEEPING OF THE PROPERTY PLUS THE LEGAL JUDGMENT
RATE OF RETURN ON THAT AMOUNT. THE PROPERTY PURCHASER SHALL BE  ENTITLED
TO  RECOVER  ONLY THOSE MAINTENANCE AND SAFE KEEPING COSTS FOR WHICH THE
PURCHASER CAN PROVIDE WRITTEN PROOF.
  4. THE RIGHT OF REPAYMENT AND CONVEYANCE PROVIDED BY THIS SECTION  MAY
BE EXERCISED NOT LATER THAN THE ONE HUNDRED EIGHTIETH DAY AFTER THE DATE
ON  WHICH  THE REFEREE'S DEED IS FILED IN THE OFFICE OF THE COUNTY CLERK
OF THE COUNTY WHERE THE PROPERTY IS SITUATED.
  S 977-G. COLLECTION OF  LIEN  INFORMATION.  1.  TWICE  ANNUALLY,  EACH
TAXING DISTRICT SHALL PROVIDE THE SUPERINTENDENT OF FINANCIAL SERVICES A
REPORT, IN SPREADSHEET OR COMMA DELIMITED ELECTRONIC FORMAT, OF ALL REAL
PROPERTY  ACCOUNTS  IN  SAID  TAXING  DISTRICT THAT HAVE UNPAID PROPERTY
TAXES. THE REPORTS SHALL BE DUE ON OR AROUND JANUARY FIRST  AND  OCTOBER
FIRST.  THE  JANUARY  REPORT SHALL CONTAIN A LISTING OF ALL TAX ACCOUNTS
THAT SHOW REAL PROPERTY TAXES DUE. THE OCTOBER REPORT  SHALL  CONTAIN  A
LISTING  OF  ALL  TAX ACCOUNTS THAT SHOW REAL PROPERTY TAXES DELINQUENT.
FOR EACH ACCOUNT, SAID LISTINGS SHALL INCLUDE THE DATA FROM THE TAX ROLL
OF THE TAXING DISTRICT,  INCLUDING  BUT  NOT  LIMITED  TO  THE  PROPERTY
OWNER'S  NAME  AND  ADDRESS,  THE  PROPERTY ADDRESS, THE PROPERTY PARCEL
IDENTIFIER, THE PROPERTY TYPE CLASSIFICATION CODE (FOR EXAMPLE, AGRICUL-
TURAL, RESIDENTIAL, COMMERCIAL OR VACANT LAND), THE  ASSESSED  VALUE  OF
THE  REAL PROPERTY AND THE IMPROVEMENTS THEREON, THE EXEMPTIONS, IF ANY,
ON THE PROPERTY AND THE YEAR(S) AND AMOUNT DUE OR DELINQUENT.
  2. THE SUPERINTENDENT OF  FINANCIAL  SERVICES  SHALL  CONSOLIDATE  THE
REPORTS  FROM  ALL  TAXING  DISTRICTS.  THE  SUPERINTENDENT OF FINANCIAL
SERVICES SHALL MAKE THE CONSOLIDATED REPORT AVAILABLE TO ANY PERSON UPON
REQUEST, IN SPREADSHEET OR  COMMA  DELIMITED  ELECTRONIC  FORMAT,  AT  A
REASONABLE PRICE NOT TO EXCEED FIVE HUNDRED DOLLARS.
  3.  THE SUPERINTENDENT OF FINANCIAL SERVICES SHALL PROMULGATE RULES TO
IMPLEMENT THIS SECTION.
  S 3. This act shall take effect on the ninetieth day  after  it  shall
have become a law.

Co-Sponsors

S6817A - Bill Details

See Assembly Version of this Bill:
A9990
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Add Art 9 Title 4-B §§977 - 977-g, RPT L; amd §§6403 & 6406, Ins L

S6817A - Bill Texts

view summary

Provides that a private third party may contract with a property owner to pay real property taxes in exchange for transfer of liens on the property to the transferee.

view sponsor memo
BILL NUMBER:S6817A

TITLE OF BILL:
An act
to amend the insurance law and the
real property tax law, in relation to local
government liens and payment
contracts

PURPOSE OR GENERAL IDEA OF BILL:
Under this bill, a property owner may authorize a third party to pay
the owner's property taxes. In exchange for the third party paying
the taxing district the full amount of taxes and associated penalties
and interest, the tax collector transfers the tax lien to the third
party payor. The property owner then repays the transferee over time
under agreed-upon, more flexible terms. This bill accomplishes two
important purposes: (1) increases local government tax collections
and (2) allows property owners flexibility in meeting the burden of
paying their property taxes.

Under this bill, a local government will receive funds that it might
otherwise have to wait on or recover through an in rem foreclosure
action. This legislation will help local governments across the state
that are struggling to balance their budgets and seeking to minimize
foreclosures.

The legislation also benefits New York property owners because it
gives property owners the opportunity to pay their taxes over time.
Property owners could obtain manageable repayment agreements instead
of having to make a single lump sum payment - a meaningful benefit in
this difficult economy. These benefits accrue to both homeowners who
want to keep their homes and commercial property owners who want to
keep their business properties, preserve jobs, and expand their
businesses with cash on hand.

The bill also provides various protections for homeowners and
commercial property owners, including a maximum allowable interest
rate, pre-enforcement notice requirements, change of servicer notice,
annual notice to borrower with status of account, and a lien
repayment and release option. These provisions are much more
consumer-oriented and protective than current options. For example, a
taxing district currently has the option to conduct an in rem
foreclosure on a tax-delinquent property a much speedier process.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 is the Legislative intent of the bill.
Section 2 and 3 relate to the powers of title insurance Corporations.
Section 4 Establishes Title 4-B of the Real property Tax Law relating
to Lien Payment Contracts
Section 5 is the effective date.

STATEMENT IN SUPPORT:
Local governments rely heavily on property taxes to fund their
services, but property owners have found it increasingly difficult to
comply with the strict statutory requirements for paying their taxes.
The result is that local governments must rely on increased
foreclosures or bulk lien sales to collect their taxes. The property
owners thus are faced with
either the possibility of foreclosure or repaying an unknown third
party.

This bill does not create any new liens or obligations for property
owners; instead, it gives them the option of authorizing the transfer
of their existing tax liens from the public entity to a private one.
The owner will have the ability to negotiate and approve the
repayment terms before the transferee ever makes the payment to the
tax collector and the transferee will not be allowed to add on
excessive fees, costs, or interest to the amount the owner owes. The
legislation would have no effect on local governments' ability to
utilize bulk tax lien sales.

The result will be increased tax collections, fewer lien foreclosures,
and increased financial flexibility for New York property owners.

PRIOR LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None to the state but improved tax collections for tax districts.

EFFECTIVE DATE:
This act shall become effective on the ninetieth day after it becomes
law.

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

                                 6817--A

                            I N  S E N A T E

                             March 26, 2012
                               ___________

Introduced by Sens. MAZIARZ, NOZZOLIO -- read twice and ordered printed,
  and  when printed to be committed to the Committee on Local Government
  -- committee discharged, bill amended, ordered  reprinted  as  amended
  and recommitted to said committee

AN  ACT  to  amend  the  insurance law and the real property tax law, in
  relation to local government liens and payment contracts

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

  Section  1.  Legislative  intent.  The  legislature  finds  that local
governments are struggling under the weight of increased costs,  reduced
revenues  and increased stresses on their respective budgets. The legis-
lature also finds that property owners are struggling under  the  weight
of  high  property taxes and other local government assessments and need
assistance in paying those amounts in order to  prevent  foreclosure  or
the  sale  of  the liens to third parties involuntarily. The legislature
finds that it is in the best interests of the residents of the state  of
New York and the local governments to allow property owners to voluntar-
ily  enter  into  agreements  with  private entities whereby the private
parties assume the position of the  local  governments  for  assessments
such  as property taxes and water and sewer charges. Currently, property
owners are required to pay these assessments in full. Allowing  property
owners  to increase the payment term will help alleviate the pressure on
these already financially stressed residents and business owners.  More-
over, local governments will  increase  their  revenue  collections  and
spend  less  on  actions such as tax lien sales and lien foreclosures to
collect unpaid liens, because the lien payors will pay the liens to  the
local governments in full, all at once.
  S  2.  Paragraph  5 of subsection (b) of section 6403 of the insurance
law is amended to read as follows:
  (5) To invest in or acquire for resale, (i) obligations secured  by  a
mortgage  (including any part of an issue of such obligations) which are
insured or committed to be insured by the Federal Housing Administrator,
or (ii) debentures lawfully issued by the Federal Housing Administrator,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15093-02-2

S. 6817--A                          2

OR LOANS SECURED BY LIENS ON REAL PROPERTY ISSUED  BY  A  COUNTY,  CITY,
TOWN OR VILLAGE IN NEW YORK STATE.
  S  3.  Paragraph  2 of subsection (b) of section 6406 of the insurance
law is amended to read as follows:
  (2) Any such corporation may invest in loans secured by  mortgages  on
real  property  guaranteed  as  to  principal  or interest by the United
States OR SECURED BY A LIEN ON REAL PROPERTY.
  S 4. Article 9 of the real property tax law is amended by adding a new
title 4-B to read as follows:
                                 TITLE 4-B
                         LIEN PAYMENT CONTRACTS
SECTION 977. DEFINITIONS.
        977-A. LIEN TRANSFER.
        977-B. LIEN TRANSFER AUTHORIZATION.
        977-C. LIEN TRANSFER CERTIFICATE.
        977-D. LIEN PAYMENT CONTRACT.
        977-E. ENFORCEMENT.
        977-F. LIEN REPAYMENT AND RELEASE.
        977-G. COLLECTION OF LIEN INFORMATION.
  S 977. DEFINITIONS. AS USED IN THIS TITLE THE  FOLLOWING  TERMS  SHALL
HAVE THE FOLLOWING MEANINGS:
  1.  "TAXING  DISTRICT" SHALL MEAN ANY LOCAL GOVERNMENT ENTITY, INCLUD-
ING, ANY  CITY,  TOWN,  VILLAGE,  COUNTY,  SCHOOL  DISTRICT  OR  SPECIAL
DISTRICT,  THAT IMPOSES TAXES, SPECIAL AD VALOREM LEVIES, WATER OR SEWER
CHARGES OR SPECIAL ASSESSMENTS ON REAL PROPERTY.
  2. "LIEN PAYMENT" MEANS THE AMOUNT  OF  MONEY  ADVANCED  TO  A  TAXING
DISTRICT ON BEHALF OF A PROPERTY OWNER IN CONSIDERATION FOR THE TRANSFER
OF  LIENS  FOR  PROPERTY  TAXES OR WATER OR SEWER CHARGES ON THE OWNER'S
REAL PROPERTY PURSUANT TO A LIEN TRANSFER AUTHORIZATION AND LIEN PAYMENT
CONTRACT.
  3. "LIEN TRANSFER AUTHORIZATION" SHALL HAVE THE MEANING AS  SET  FORTH
IN SECTION NINE HUNDRED SEVENTY-SEVEN-B OF THIS TITLE.
  4.  "LIEN TRANSFER CERTIFICATE" SHALL HAVE THE MEANING AS SET FORTH IN
SECTION NINE HUNDRED SEVENTY-SEVEN-C OF THIS TITLE.
  5. "LIEN PAYMENT CONTRACT" SHALL MEAN A WRITTEN CONTRACT  BETWEEN  THE
TRANSFEREE  AND  THE PROPERTY OWNER AS SET FORTH IN SECTION NINE HUNDRED
SEVENTY-SEVEN-D OF THIS TITLE.
  6. "REFEREE'S DEED" SHALL MEAN THE DEED ISSUED TO THE PURCHASER  AT  A
FORECLOSURE SALE AT THE COURTHOUSE STEPS.
  7. "TRANSFEREE" MEANS A PERSON WHO ADVANCES MONEY DIRECTLY TO A TAXING
DISTRICT  AT  THE  REQUEST  OF A PROPERTY OWNER IN CONSIDERATION FOR THE
TRANSFER OF LIENS ON THE OWNER'S REAL PROPERTY.
  S 977-A. LIEN TRANSFER. 1. A PROPERTY OWNER MAY EXECUTE A DOCUMENT  AS
DETAILED  HEREIN  IN  THE  FORM  OF  A  LIEN TRANSFER AUTHORIZATION THAT
CONSENTS TO AND AUTHORIZES THE TRANSFER OF A TAXING DISTRICT'S LIENS  ON
THE  OWNER'S  REAL  PROPERTY TO A TRANSFEREE WHEN THE TRANSFEREE TENDERS
THE LIEN PAYMENT TO THE TAXING DISTRICT ON BEHALF OF THE PROPERTY OWNER.
  2. WITHIN THIRTY DAYS OF RECEIPT BY THE TAXING DISTRICT OF THE PROPER-
TY OWNER'S LIEN TRANSFER AUTHORIZATION AND THE  LIEN  PAYMENT  FROM  THE
TRANSFEREE,  THE  TAXING  DISTRICT SHALL EXECUTE A LIEN TRANSFER CERTIF-
ICATE ACKNOWLEDGING THAT THE REAL PROPERTY LIENS ON THE SUBJECT PROPERTY
ARE TRANSFERRED TO THE TRANSFEREE.  THE  LIEN  TRANSFER  CERTIFICATE  AS
DETAILED  IN  SECTION  NINE  HUNDRED SEVENTY-SEVEN-C OF THIS TITLE SHALL
CERTIFY THAT THE TAXING DISTRICT RECEIVED THE PROPERTY  OWNER'S  WRITTEN
AUTHORIZATION  TO  TRANSFER THE LIENS; THAT THE TRANSFEREE PAID THE LIEN

S. 6817--A                          3

PAYMENT; AND THAT THE TAXING DISTRICT'S LIENS  ARE  TRANSFERRED  TO  THE
TRANSFEREE IN THE AMOUNTS LISTED IN THE LIEN TRANSFER CERTIFICATE.
  3. IN ADDITION TO THE RIGHTS PROVIDED UNDER THE LIEN PAYMENT CONTRACT,
THE  TRANSFEREE  AND  ITS  HEIRS AND ASSIGNS, SHALL BE SUBROGATED TO AND
HAVE ALL OF THE RIGHTS, REMEDIES AND PRIORITIES AS THE  TAXING  DISTRICT
UNDER  APPLICABLE  STATE  OR  FEDERAL LAW, SUBJECT ONLY TO THE TERMS AND
CONDITIONS OF THIS SECTION AND  THE  LIEN  PAYMENT  CONTRACT.  THE  LIEN
TRANSFER  CERTIFICATE MAY NOT PERMIT THE TRANSFEREE TO ACT UPON THE LIEN
REPRESENTED BY THE LIEN TRANSFER CERTIFICATE EXCEPT FOR  ACTIONS  NECES-
SARY  TO  DEFEND  OR  ENFORCE THE LIEN OR TO COLLECT THE AMOUNTS OWED AS
PROVIDED FOR IN THE LIEN TRANSFER CERTIFICATE, THE LIEN PAYMENT CONTRACT
AND THIS SECTION.
  4. THE LIEN TRANSFER CERTIFICATE  SHALL  BE  RECORDED  IN  ANY  COUNTY
CLERKS'  OFFICE  WHERE THE PROPERTY IS SITUATED AND THE TRANSFEREE SHALL
PAY ANY STATUTORY FEE FOR SAID RECORDING.  FAILURE TO COMPLY  WITH  THIS
PROVISION  HAS  NO EFFECT ON THE VALIDITY OF THE TRANSFERRED LIEN OR THE
ENFORCEABILITY OF THE LIEN PAYMENT CONTRACT.
  S 977-B. LIEN TRANSFER AUTHORIZATION. 1.  A  DOCUMENT  BY  A  PROPERTY
OWNER  AUTHORIZING  THE  TRANSFER  OF  LIENS  MUST CONTAIN THE FOLLOWING
INFORMATION AND BE IN SUBSTANTIALLY THE FOLLOWING FORM:
  LIEN TRANSFER AUTHORIZATION PURSUANT TO REAL PROPERTY TAX LAW SECTION
                                  977-B
PROPERTY OWNER:
PARCEL IDENTIFICATION:
YEARS:
AMOUNT DUE: (INCLUDE AMOUNT OF ORIGINAL LIEN PLUS ALL ASSOCIATED  PENAL-
TIES, INTEREST, COSTS AND FEES)
ACCOUNT NUMBER OR IDENTIFICATION CODE:
     I  (NAME  OF  OWNER(S) OR OWNER'S AUTHORIZED REPRESENTATIVE) OWN(S)
THE REAL PROPERTY  LOCATED  IN  THE  COUNTY  OF  (INSERT  COUNTY  NAME),
("TAXING  DISTRICT")  WITH THE STREET ADDRESS KNOWN AS AND AS MORE FULLY
DESCRIBED  BY  ITS  LEGAL  DESCRIPTION  AS:  (INSERT  STREET  AND  LEGAL
ADDRESSES).  PURSUANT  TO  SECTION 977-B OF THE REAL PROPERTY TAX LAW, I
HEREBY AUTHORIZE THE TREASURER (TAX COLLECTOR, COMPTROLLER, REAL PROPER-
TY DIRECTOR) TO TRANSFER THE LIEN(S) HELD ON THE PROPERTY  LISTED  ABOVE
TO  (NAME OF PERSON OR ENTITY) ("TRANSFEREE"). I HEREBY AUTHORIZE TRANS-
FEREE TO ADVANCE FUNDS IN CONSIDERATION FOR THE TRANSFER OF  THE  TAXING
DISTRICT'S LIEN(S) IN AN AMOUNT EQUAL TO THE LIEN BALANCE, INCLUDING ALL
TAXES,  PENALTIES,  INTEREST,  COLLECTION  COSTS  AND OTHER LIEN CHARGES
IMPOSED BY THE TAXING DISTRICT ON THE REAL PROPERTY DESCRIBED ABOVE  FOR
THE  YEARS  AS  LISTED  HEREIN:    (LIST  TAX YEARS, TAX AMOUNTS AND TAX
CERTIFICATE NUMBER(S)).
     I FURTHER AUTHORIZE AND DIRECT THE TAXING DISTRICT TO ISSUE A  LIEN
RECEIPT WITH THE TAXING DISTRICT'S SEAL TO THE TRANSFEREE AND TO CERTIFY
1) RECEIPT OF PAYMENT FROM THE TRANSFEREE ON BEHALF OF THE OWNER; AND 2)
TRANSFER OF THE LIEN(S) ON THE OWNER'S PROPERTY TO THE TRANSFEREE.
_______________________________
(OWNER(S) OR AUTHORIZED REPRESENTATIVE)
SUBSCRIBED AND SWORN TO BEFORE ME
ON THIS, THE ____ DAY OF __________,
20____ BY (INSERT NAME OF SIGNER.)
__________________________________
NOTARY PUBLIC, STATE OF NEW YORK
DATE SIGNED (INSERT NOTARY'S SEAL)
  2. IF THE PROPERTY OWNER AUTHORIZES THE TRANSFER OF LIENS FOR MULTIPLE
YEARS  OR  FOR  MULTIPLE  PROPERTY  LIENS  ASSESSED  BY  THE SAME TAXING

S. 6817--A                          4

DISTRICT, THE AUTHORIZATION FOR ALL OF THE LIENS MAY  BE  COMBINED  INTO
ONE FORM.
  S  977-C.  LIEN  TRANSFER CERTIFICATE. 1. A CERTIFIED STATEMENT ISSUED
UNDER THIS SECTION BY A TAXING DISTRICT FOR THE PURPOSE OF MEMORIALIZING
THE TRANSFER OF A LIEN SHALL CONTAIN THE FOLLOWING INFORMATION AND SHALL
BE IN SUBSTANTIALLY THE FOLLOWING FORM:
     LIEN TRANSFER CERTIFICATE PURSUANT TO SECTION 977-C OF THE REAL
                            PROPERTY TAX LAW
PROPERTY  DESCRIPTION:  (INSERT  PHYSICAL  ADDRESS  AS  WELL  AS   LEGAL
DESCRIPTION)
TAX OR PROPERTY ACCOUNT NUMBER:
YEAR(S) OF LIEN ASSESSMENT: (INSERT YEAR(S) OF LIENS TRANSFERRED)
TAXING DISTRICT(S):
AMOUNTS PAID: (AMOUNT OF LIEN AND ANY LIEN CERTIFICATE(S) TRANSFERRED)
TAX CERTIFICATE NUMBER: TRANSFEREE: (INSERT NAME OF TRANSFEREE)
     I,  (INSERT  NAME),  (TITLE,  E.G., TREASURER, TAX COLLECTOR, COMP-
TROLLER, REAL PROPERTY DIRECTOR) FOR (TAXING DISTRICT(S), E.G.,  COUNTY,
CITY,  VILLAGE,  TOWN),  CERTIFY THAT I HAVE RECEIVED AUTHORIZATION FROM
THE OWNER(S) OF THE PROPERTY OR  PROPERTIES  LISTED  ABOVE  (OR  ON  THE
ATTACHED  EXHIBIT)  TO  TRANSFER  THE  LIEN(S)  TO THE TRANSFEREE LISTED
ABOVE; THAT TRANSFEREE HAS TENDERED THE AMOUNTS PAID TO THE NAMED TAXING
DISTRICTS ON THE  PROPERTY  AS  CONSIDERATION  FOR  A  TRANSFER  OF  THE
LIEN(S);  AND  THAT THE LIEN(S) HELD BY TAXING DISTRICTS ON THE PROPERTY
FOR THE YEARS LISTED ABOVE  ARE  HEREBY  TRANSFERRED  TO  TRANSFEREE  IN
ACCORDANCE  WITH  REAL  PROPERTY  TAX LAW SECTION 977-C. I HAVE ISSUED A
RECEIPT TO TRANSFEREE IN CONJUNCTION WITH THIS CERTIFICATION  REFLECTING
THE  PAYMENT  FOR THE TRANSFER IN THE AMOUNT OF TAXES, PENALTIES, INTER-
EST, AND COLLECTION COSTS DUE.
__________________________________________
(SIGNATURE OF  TREASURER  (TAX  COLLECTOR,  COMPTROLLER,  REAL  PROPERTY
DIRECTOR)
SEAL OF TAXING DISTRICT                    DATE: ____________
(IF NO SEAL OF OFFICE CAN BE PROVIDED, SIGNATURE SHOULD BE NOTARIZED.)
  2.  IF  A PROPERTY OWNER AUTHORIZES THE TRANSFER OF PROPERTY LIENS FOR
MULTIPLE YEARS OR FOR MULTIPLE LIENS ASSESSED OR COLLECTED BY  THE  SAME
TAXING  DISTRICT,  THE  STATEMENT  CERTIFYING  THE TRANSFER OF THE LIENS
SHALL BE COMBINED INTO ONE FORM.
  3. A TAXING DISTRICT MAY CHARGE A REASONABLE FEE NOT TO  EXCEED  TWEN-
TY-FIVE  DOLLARS FOR EACH STATEMENT CERTIFYING THE TRANSFER OF THE LIENS
ON PROPERTY.
  S 977-D. LIEN PAYMENT CONTRACT. 1. A PROPERTY OWNER MAY ENTER  INTO  A
LIEN PAYMENT CONTRACT WITH A TRANSFEREE. THE LIEN PAYMENT CONTRACT SHALL
SET  FORTH  SUCH  TERMS  AND  CONDITIONS TO WHICH THE TRANSFEREE AND THE
PROPERTY OWNER MAY AGREE REGARDING THE PAYMENT OF THE  TRANSFERRED  LIEN
TO THE TRANSFEREE.
  2.  THE TRANSFERRED LIEN SHALL SECURE ALL AMOUNTS OWED AS PERMITTED BY
THE LIEN PAYMENT CONTRACT AND THIS SECTION.
  3. ANY FEES TO EFFECT THE TRANSFER OF A LIEN OR TO  SERVICE  A  TRANS-
FERRED LIEN MAY, AT THE PROPERTY OWNER'S REQUEST AND WRITTEN CONSENT, BE
INCLUDED  IN  AND MADE A PART OF THE AMOUNTS OWED UNDER THE LIEN PAYMENT
CONTRACT. IF THE SUBJECT PROPERTY IS OWNED AND OCCUPIED BY THE  PROPERTY
OWNER  AS  THE OWNER'S PRINCIPAL RESIDENCE, ADDITIONAL CHARGES TO EFFECT
THE TRANSFER SHALL BE LIMITED AS FOLLOWS:  AN  APPLICATION  FEE  NOT  TO
EXCEED  TWO  HUNDRED FIFTY DOLLARS, FEES FOR TITLE CHARGES NOT TO EXCEED
FOUR HUNDRED DOLLARS, REASONABLE AND CUSTOMARY ATTORNEY'S  FEES  NOT  TO
EXCEED  ONE  THOUSAND DOLLARS AND REASONABLE AND CUSTOMARY CLOSING COSTS

S. 6817--A                          5

NOT TO EXCEED FIVE HUNDRED DOLLARS. ALL COSTS AND FEES  ASSOCIATED  WITH
ENFORCING  THE  RIGHTS  OF  THE  TRANSFEREE  UNDER THE TERMS OF THE LIEN
PAYMENT CONTRACT AND THIS SECTION ALSO MAY BE INCLUDED IN THE AMOUNT DUE
UNDER  THE LIEN PAYMENT CONTRACT AND MAY BE LIMITED BY A COURT OF COMPE-
TENT JURISDICTION. THE LIEN PAYMENT CONTRACT MAY ALSO  PROVIDE  THAT  IN
THE EVENT THAT THE PROPERTY OWNER INITIATES A BANKRUPTCY PROCEEDING, THE
TRANSFEREE  SHALL  BE ENTITLED TO RECOVER ALL FEES AND COSTS INCURRED IN
PROTECTING ITS RIGHTS IN THE PROCEEDING.
  4. THE TRANSFEREE MAY COLLECT INTEREST ON THE AMOUNTS OWED  UNDER  THE
LIEN  PAYMENT  CONTRACT  AT  THE  RATE OF INTEREST CHARGED ON DELINQUENT
LIENS BY THE TAXING DISTRICT THAT TRANSFERRED THE LIEN, EXCEPT THE  RATE
OF  INTEREST  COLLECTED  BY  THE  TRANSFEREE  SHALL  NOT  EXCEED ONE AND
ONE-HALF PERCENT PER MONTH REGARDLESS OF THE INTEREST  RATE  CHARGED  ON
THE  DELINQUENT  LIENS BY THE TAXING DISTRICT THAT TRANSFERRED THE LIEN.
THE AMOUNT OWED MAY INCLUDE TAXES, PENALTIES, INTEREST, FEES  AND  COSTS
AS  AGREED  TO BETWEEN THE PROPERTY OWNER AND THE TRANSFEREE IN THE LIEN
PAYMENT CONTRACT, BUT MAY NOT INCLUDE FUNDS  ADVANCED  TO  THE  PROPERTY
OWNER FOR ANY OTHER PURPOSE. IF THE PROPERTY OWNER OWNS AND OCCUPIES THE
SUBJECT  PROPERTY  AS  THE OWNER'S PRINCIPAL RESIDENCE, THE LIEN PAYMENT
CONTRACT MAY NOT CONTAIN A PENALTY FOR EARLY PAYMENT OF THE AMOUNTS OWED
UNDER THE LIEN PAYMENT CONTRACT.
  5. NOTHING CONTAINED IN THIS SECTION SHALL BE DEEMED TO CREATE A MORT-
GAGE, NOTE OR OTHER INSTRUMENT OR LIEN GOVERNED BY ANY STATE OR  FEDERAL
LAW  REGULATING MORTGAGE AGREEMENTS, NOR SHALL THE AMOUNT OWED UNDER THE
LIEN PAYMENT CONTRACT BE CONSIDERED DEBT FOR PERSONAL, FAMILY OR  HOUSE-
HOLD  PURPOSES. THE LIEN PAYMENT CONTRACT SHALL BE DEEMED A CONTRACT FOR
THE PAYMENT OF AMOUNTS OWING TO LOCAL TAXING  DISTRICTS  AND  ASSOCIATED
OBLIGATIONS  AND  SHALL BE GOVERNED BY THIS TITLE AND GENERAL PRINCIPLES
OF CONTRACT LAW, EXCEPT FOR THE FORECLOSURE  OF  THE  TRANSFERRED  LIEN,
WHICH  IS  SUBJECT TO THE RULES AND REGULATIONS GOVERNING MORTGAGE FORE-
CLOSURES AS DETAILED IN THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  6. ONCE A YEAR, BUT NO LATER THAN THE FIRST OF FEBRUARY OF EACH  YEAR,
THE  TRANSFEREE  SHALL  PROVIDE  A  STATEMENT OF ACCOUNT TO THE PROPERTY
OWNER. EACH STATEMENT OF ACCOUNT SHALL INCLUDE NAME, ADDRESS  AND  TELE-
PHONE  NUMBER  OF  THE  SERVICER OF THE LIEN PAYMENT CONTRACT; THE TOTAL
AMOUNT PAID IN THE PRIOR CALENDAR YEAR; THE  TOTAL  AMOUNT  OF  INTEREST
PAID  FOR  THAT YEAR; AND THE AMOUNT REMAINING TO BE PAID UNDER THE LIEN
PAYMENT CONTRACT.
  7. IF THE PERSON OR ENTITY SERVICING THE LIEN PAYMENT CONTRACT  CHANG-
ES,  THE  TRANSFEREE  SHALL SEND WRITTEN NOTICE TO THE PROPERTY OWNER OF
THE NAME, ADDRESS AND TELEPHONE NUMBER OF THE NEW LIEN  SERVICER  WITHIN
TEN BUSINESS DAYS OF THE CHANGE IN ADMINISTRATION.
  S  977-E. ENFORCEMENT. 1. THE TRANSFEREE MAY FILE AN ACTION TO ENFORCE
THE TERMS AND CONDITIONS OF THE TRANSFERRED LIEN AND  THE  LIEN  PAYMENT
CONTRACT, THE TRANSFEREE SHALL ENFORCE SAID CONTRACT PURSUANT TO ARTICLE
THIRTEEN OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  2.  THE  TRANSFEREE  IS  ENTITLED  TO RECOVER REASONABLE AND CUSTOMARY
COSTS AND FEES TO FORECLOSE OR ENFORCE THE TRANSFERRED LIEN.  THE  COSTS
AND  FEES  MUST BE APPROVED BY A COURT OF COMPETENT JURISDICTION AND THE
PROPERTY TAX PAYOR MAY BE REQUIRED TO SUBMIT PROOF OF  THEIR  INCURRENCE
TO THE COURT. RECOVERABLE FEES AND COSTS MAY INCLUDE:
  (A) ATTORNEY'S FEES;
  (B)  CHARGES  TO  VERIFY OWNERSHIP OF THE PROPERTY, NOT TO EXCEED FOUR
HUNDRED DOLLARS;
  (C) FEES FOR RECORDING NOTICES AND DOCUMENTS RELATED TO  THE  FORECLO-
SURE;

S. 6817--A                          6

  (D) COSTS OF PROVIDING NOTICE, INCLUDING SERVICE OF PROCESS AND ADVER-
TISEMENT; AND
  (E)  OTHER  FEES AND COSTS LEGALLY REQUIRED TO FORECLOSE OR TO ENFORCE
THE TRANSFERRED LIEN.
  3. A FORECLOSURE OF A LIEN TRANSFERRED AS  PROVIDED  BY  SECTION  NINE
HUNDRED  SEVENTY-SEVEN-A  OF THIS TITLE MAY NOT BE INSTITUTED WITHIN ONE
YEAR FROM THE LATEST DATE ON WHICH THE LIEN IS RECORDED IN ALL  COUNTIES
IN  WHICH  THE  PROPERTY  IS  LOCATED,  UNLESS THE LIEN PAYMENT CONTRACT
BETWEEN THE OWNER OF THE PROPERTY AND THE TRANSFEREE PROVIDES OTHERWISE.
  4. NOTHING IN THIS SECTION SHALL BE DEEMED TO AFFECT THE RIGHTS  OF  A
TAXING DISTRICT UNDER ARTICLE ELEVEN OF THIS CHAPTER.
  S  977-F. LIEN REPAYMENT AND RELEASE. 1. THE PROPERTY OWNER MAY OBTAIN
A RELEASE OF THE TRANSFERRED LIEN BY PAYING THE  TRANSFEREE  THE  AMOUNT
DUE  UNDER  THE  LIEN  PAYMENT CONTRACT AT ANY TIME AFTER THE TRANSFEREE
FILES A LIS PENDENS IN CONNECTION WITH A FORECLOSURE PROCEEDING  OF  THE
SUBJECT PROPERTY.
  2.  A  PRIOR RECORDED FIRST LIEN MORTGAGEE MAY OBTAIN A RELEASE OF THE
TRANSFERRED LIEN BY PAYING THE TRANSFEREE THE AMOUNT DUE UNDER THE  LIEN
PAYMENT CONTRACT:
  (A) AT ANY TIME AFTER THE TRANSFEREE FILES A LIS PENDENS IN CONNECTION
WITH A FORECLOSURE PROCEEDING OF THE SUBJECT PROPERTY;
  (B)  UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT STATING THAT THE PROP-
ERTY OWNER IS NINETY DAYS OR MORE  DELINQUENT  IN  THE  PAYMENT  OF  THE
OWNER'S FIRST LIEN MORTGAGE;
  (C) UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT FROM THE PROPERTY OWNER
AUTHORIZING THE PAYMENT AND RELEASE; OR
  (D) AT THE TRANSFEREE'S DISCRETION.
  3.  IF  A  TRANSFEREE  FORECLOSES  ON A TRANSFERRED LIEN, THE PROPERTY
OWNER OR THE SERVICER OF A PRIOR RECORDED FIRST LIEN MORTGAGE  IS  ENTI-
TLED  TO  COMPEL CONVEYANCE OF THE FORECLOSED PROPERTY FROM THE OWNER AT
THE TIME OF CONVEYANCE BY PAYING THE OWNER AT THE TIME OF CONVEYANCE:
  (A) ONE HUNDRED TWENTY PERCENT OF THE AMOUNT PAID BY THE PURCHASER  AT
THE FORECLOSURE SALE; AND
  (B)  THE  AMOUNT  REASONABLY SPENT BY THE PURCHASER IN CONNECTION WITH
THE MAINTENANCE AND SAFE KEEPING OF THE PROPERTY PLUS THE LEGAL JUDGMENT
RATE OF RETURN ON THAT AMOUNT. THE PROPERTY PURCHASER SHALL BE  ENTITLED
TO  RECOVER  ONLY THOSE MAINTENANCE AND SAFE KEEPING COSTS FOR WHICH THE
PURCHASER CAN PROVIDE WRITTEN PROOF.
  4. THE RIGHT OF REPAYMENT AND CONVEYANCE PROVIDED BY THIS SECTION  MAY
BE EXERCISED NOT LATER THAN THE ONE HUNDRED EIGHTIETH DAY AFTER THE DATE
ON  WHICH  THE REFEREE'S DEED IS FILED IN THE OFFICE OF THE COUNTY CLERK
OF THE COUNTY WHERE THE PROPERTY IS SITUATED.
  S 977-G. COLLECTION OF  LIEN  INFORMATION.  1.  TWICE  ANNUALLY,  EACH
TAXING DISTRICT SHALL PROVIDE THE SUPERINTENDENT OF FINANCIAL SERVICES A
REPORT, IN SPREADSHEET OR COMMA DELIMITED ELECTRONIC FORMAT, OF ALL REAL
PROPERTY  ACCOUNTS  IN  SAID  TAXING  DISTRICT THAT HAVE UNPAID PROPERTY
TAXES. THE REPORTS SHALL BE DUE ON OR AROUND JANUARY FIRST  AND  OCTOBER
FIRST.  THE  JANUARY  REPORT SHALL CONTAIN A LISTING OF ALL TAX ACCOUNTS
THAT SHOW REAL PROPERTY TAXES DUE. THE OCTOBER REPORT  SHALL  CONTAIN  A
LISTING  OF  ALL  TAX ACCOUNTS THAT SHOW REAL PROPERTY TAXES DELINQUENT.
FOR EACH ACCOUNT, SAID LISTINGS SHALL INCLUDE THE DATA FROM THE TAX ROLL
OF THE TAXING DISTRICT,  INCLUDING  BUT  NOT  LIMITED  TO  THE  PROPERTY
OWNER'S  NAME  AND  ADDRESS,  THE  PROPERTY ADDRESS, THE PROPERTY PARCEL
IDENTIFIER, THE PROPERTY TYPE CLASSIFICATION CODE (FOR EXAMPLE, AGRICUL-
TURAL, RESIDENTIAL, COMMERCIAL OR VACANT LAND), THE  ASSESSED  VALUE  OF

S. 6817--A                          7

THE  REAL PROPERTY AND THE IMPROVEMENTS THEREON, THE EXEMPTIONS, IF ANY,
ON THE PROPERTY AND THE YEAR(S) AND AMOUNT DUE OR DELINQUENT.
  2.  THE  SUPERINTENDENT  OF  FINANCIAL  SERVICES SHALL CONSOLIDATE THE
REPORTS FROM ALL  TAXING  DISTRICTS.  THE  SUPERINTENDENT  OF  FINANCIAL
SERVICES SHALL MAKE THE CONSOLIDATED REPORT AVAILABLE TO ANY PERSON UPON
REQUEST,  IN  SPREADSHEET  OR  COMMA  DELIMITED  ELECTRONIC FORMAT, AT A
REASONABLE PRICE NOT TO EXCEED FIVE HUNDRED DOLLARS.
  3. THE SUPERINTENDENT OF FINANCIAL SERVICES SHALL PROMULGATE RULES  TO
IMPLEMENT THIS SECTION.
  S  5.  This  act shall take effect on the ninetieth day after it shall
have become a law.

Co-Sponsors

S6817B - Bill Details

See Assembly Version of this Bill:
A9990
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Add Art 9 Title 4-B §§977 - 977-g, RPT L; amd §§6403 & 6406, Ins L

S6817B - Bill Texts

view summary

Provides that a private third party may contract with a property owner to pay real property taxes in exchange for transfer of liens on the property to the transferee.

view sponsor memo
BILL NUMBER:S6817B

TITLE OF BILL:
An act
to amend the insurance law and the
real property tax law, in relation to local
government liens and payment
contracts

PURPOSE OR GENERAL IDEA OF BILL:
Under this bill, a property owner may authorize a third party to pay
the owner's property taxes. In exchange for the third party paying
the taxing district the full amount of taxes and associated penalties
and interest, the tax collector transfers the tax lien to the third
party payor. The property owner then repays the transferee over time
under agreed-upon, more flexible terms. This bill accomplishes two
important purposes: (1) increases local government tax collections
and (2) allows property owners flexibility in meeting the burden of
paying their property taxes.

Under this bill, a local government will receive funds that it might
otherwise have to wait on or recover through an in rem
foreclosure action. This legislation will help local governments
across the state that are struggling to balance their budgets and
seeking to minimize foreclosures.

The legislation also benefits New York property owners because it
gives property owners the opportunity to pay their taxes over time.
Property owners could obtain manageable repayment agreements instead
of having to make a single lump sum payment - a meaningful benefit in
this difficult economy. These benefits accrue to both homeowners who
want to keep their homes and commercial property owners who want to
keep their business properties, preserve jobs, and expand their
businesses with cash on hand.

The bill also provides various protections for homeowners and
commercial property owners, including a maximum allowable interest
rate, pre-enforcement notice requirements, change of servicer notice,
annual notice to borrower with status of account, and a lien
repayment and release option. These provisions are much more
consumer-oriented and protective than current options. For example,
a taxing district currently has the option to conduct an in rem
foreclosure on a tax-delinquent property a much speedier process.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 is the Legislative intent of the bill.
Section 2 and 3 relate to the powers of title insurance Corporations.
Section 4 Establishes Title 4-B of the Real property Tax Law relating
to Lien Payment Contracts Section 5 is the effective date.

STATEMENT IN SUPPORT:

Local governments rely heavily on property taxes to fund their
services, but property owners have found it increasingly difficult to
comply with the strict statutory requirements for paying their taxes.
The result is that local governments must rely on increased
foreclosures or bulk lien sales to collect their taxes. The property
owners thus are faced with either the possibility of foreclosure or
repaying an unknown third party.
This bill does not create any new liens or obligations for property
owners; instead, it gives them the option of authorizing the transfer
of their existing tax liens from the public entity to a private one.
The owner will have the ability to negotiate and approve the repayment
terms before the transferee ever makes the payment to the tax
collector and the transferee will not be allowed to add on excessive
fees, costs, or interest to the amount the owner owes. The
legislation would have no effect on local governments' ability to
utilize bulk tax lien sales.

The result will be increased tax collections, fewer lien foreclosures,
and increased financial flexibility for New York property owners.

PRIOR LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None to the state but improved tax collections for tax districts.

EFFECTIVE DATE:
This act shall become effective on the ninetieth day after it becomes
law.

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

                                 6817--B

                            I N  S E N A T E

                             March 26, 2012
                               ___________

Introduced  by Sens. MAZIARZ, NOZZOLIO, PARKER -- read twice and ordered
  printed, and when printed to be committed to the  Committee  on  Local
  Government -- committee discharged, bill amended, ordered reprinted as
  amended  and  recommitted to said committee -- reported favorably from
  said committee and committed to the Committee on Finance --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the  insurance law and the real property tax law, in
  relation to local government liens and payment contracts

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

  Section  1.  Legislative  intent.  The  legislature  finds  that local
governments are struggling under the weight of increased costs,  reduced
revenues  and increased stresses on their respective budgets. The legis-
lature also finds that property owners are struggling under  the  weight
of  high  property taxes and other local government assessments and need
assistance in paying those amounts in order to  prevent  foreclosure  or
the  sale  of  the liens to third parties involuntarily. The legislature
finds that it is in the best interests of the residents of the state  of
New York and the local governments to allow property owners to voluntar-
ily  enter  into  agreements  with  private entities whereby the private
parties assume the position of the  local  governments  for  assessments
such  as property taxes and water and sewer charges. Currently, property
owners are required to pay these assessments in full. Allowing  property
owners  to increase the payment term will help alleviate the pressure on
these already financially stressed residents and business owners.  More-
over, local governments will  increase  their  revenue  collections  and
spend  less  on  actions such as tax lien sales and lien foreclosures to
collect unpaid liens, because the lien payors will pay the liens to  the
local governments in full, all at once.
  S  2.  Paragraph  5 of subsection (b) of section 6403 of the insurance
law is amended to read as follows:
  (5) To invest in or acquire for resale, (i) obligations secured  by  a
mortgage  (including any part of an issue of such obligations) which are

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15093-04-2

S. 6817--B                          2

insured or committed to be insured by the Federal Housing Administrator,
or (ii) debentures lawfully issued by the Federal Housing Administrator,
OR LOANS SECURED BY LIENS ON REAL PROPERTY ISSUED  BY  A  COUNTY,  CITY,
TOWN OR VILLAGE IN NEW YORK STATE.
  S  3.  Paragraph  2 of subsection (b) of section 6406 of the insurance
law is amended to read as follows:
  (2) Any such corporation may invest in loans secured by  mortgages  on
real  property  guaranteed  as  to  principal  or interest by the United
States OR SECURED BY A LIEN ON REAL PROPERTY.
  S 4. Article 9 of the real property tax law is amended by adding a new
title 4-B to read as follows:
                                 TITLE 4-B
                         LIEN PAYMENT CONTRACTS
SECTION 977. DEFINITIONS.
        977-A. LIEN TRANSFER.
        977-B. LIEN TRANSFER AUTHORIZATION.
        977-C. LIEN TRANSFER CERTIFICATE.
        977-D. LIEN PAYMENT CONTRACT.
        977-E. ENFORCEMENT.
        977-F. LIEN REPAYMENT AND RELEASE.
        977-G. COLLECTION OF LIEN INFORMATION.
  S 977. DEFINITIONS. AS USED IN THIS TITLE THE  FOLLOWING  TERMS  SHALL
HAVE THE FOLLOWING MEANINGS:
  1.  "TAXING  DISTRICT" SHALL MEAN ANY LOCAL GOVERNMENT ENTITY, INCLUD-
ING, ANY  CITY,  TOWN,  VILLAGE,  COUNTY,  SCHOOL  DISTRICT  OR  SPECIAL
DISTRICT,  THAT IMPOSES TAXES, SPECIAL AD VALOREM LEVIES, WATER OR SEWER
CHARGES OR SPECIAL ASSESSMENTS ON REAL PROPERTY.
  2. "LIEN PAYMENT" MEANS THE AMOUNT  OF  MONEY  ADVANCED  TO  A  TAXING
DISTRICT ON BEHALF OF A PROPERTY OWNER IN CONSIDERATION FOR THE TRANSFER
OF  LIENS  FOR  PROPERTY  TAXES OR WATER OR SEWER CHARGES ON THE OWNER'S
REAL PROPERTY PURSUANT TO A LIEN TRANSFER AUTHORIZATION AND LIEN PAYMENT
CONTRACT.
  3. "LIEN TRANSFER AUTHORIZATION" SHALL HAVE THE MEANING AS  SET  FORTH
IN SECTION NINE HUNDRED SEVENTY-SEVEN-B OF THIS TITLE.
  4.  "LIEN TRANSFER CERTIFICATE" SHALL HAVE THE MEANING AS SET FORTH IN
SECTION NINE HUNDRED SEVENTY-SEVEN-C OF THIS TITLE.
  5. "LIEN PAYMENT CONTRACT" SHALL MEAN A WRITTEN CONTRACT  BETWEEN  THE
TRANSFEREE  AND  THE PROPERTY OWNER AS SET FORTH IN SECTION NINE HUNDRED
SEVENTY-SEVEN-D OF THIS TITLE.
  6. "REFEREE'S DEED" SHALL MEAN THE DEED ISSUED TO THE PURCHASER  AT  A
FORECLOSURE SALE AT THE COURTHOUSE STEPS.
  7. "TRANSFEREE" MEANS A PERSON WHO ADVANCES MONEY DIRECTLY TO A TAXING
DISTRICT  AT  THE  REQUEST  OF A PROPERTY OWNER IN CONSIDERATION FOR THE
TRANSFER OF LIENS ON THE OWNER'S REAL PROPERTY.
  S 977-A. LIEN TRANSFER. 1. A PROPERTY OWNER MAY EXECUTE A DOCUMENT  AS
DETAILED  HEREIN  IN  THE  FORM  OF  A  LIEN TRANSFER AUTHORIZATION THAT
CONSENTS TO AND AUTHORIZES THE TRANSFER OF A TAXING DISTRICT'S LIENS  ON
THE  OWNER'S  REAL  PROPERTY TO A TRANSFEREE WHEN THE TRANSFEREE TENDERS
THE LIEN PAYMENT TO THE TAXING DISTRICT ON BEHALF OF THE PROPERTY OWNER.
THE TAXING DISTRICT SHALL NOTATE IN ITS RECORDS INDICATING THE ENTITY TO
WHICH THE TAX LIEN IS BEING TRANSFERRED TO INCLUDE THE NAME, ADDRESS AND
PHONE NUMBER OF SAID ENTITY.
  2. WITHIN THIRTY DAYS OF RECEIPT BY THE TAXING DISTRICT OF THE PROPER-
TY OWNER'S LIEN TRANSFER AUTHORIZATION AND THE  LIEN  PAYMENT  FROM  THE
TRANSFEREE,  THE  TAXING  DISTRICT SHALL EXECUTE A LIEN TRANSFER CERTIF-
ICATE ACKNOWLEDGING THAT THE REAL PROPERTY LIENS ON THE SUBJECT PROPERTY

S. 6817--B                          3

ARE TRANSFERRED TO THE TRANSFEREE.  THE  LIEN  TRANSFER  CERTIFICATE  AS
DETAILED  IN  SECTION  NINE  HUNDRED SEVENTY-SEVEN-C OF THIS TITLE SHALL
CERTIFY THAT THE TAXING DISTRICT RECEIVED THE PROPERTY  OWNER'S  WRITTEN
AUTHORIZATION  TO  TRANSFER THE LIENS; THAT THE TRANSFEREE PAID THE LIEN
PAYMENT; AND THAT THE TAXING DISTRICT'S LIENS  ARE  TRANSFERRED  TO  THE
TRANSFEREE IN THE AMOUNTS LISTED IN THE LIEN TRANSFER CERTIFICATE.
  3. IN ADDITION TO THE RIGHTS PROVIDED UNDER THE LIEN PAYMENT CONTRACT,
THE  TRANSFEREE  AND  ITS  HEIRS AND ASSIGNS, SHALL BE SUBROGATED TO AND
HAVE ALL OF THE RIGHTS, REMEDIES AND PRIORITIES AS THE  TAXING  DISTRICT
UNDER  APPLICABLE  STATE  OR  FEDERAL LAW, SUBJECT ONLY TO THE TERMS AND
CONDITIONS OF THIS SECTION AND  THE  LIEN  PAYMENT  CONTRACT.  THE  LIEN
TRANSFER  CERTIFICATE MAY NOT PERMIT THE TRANSFEREE TO ACT UPON THE LIEN
REPRESENTED BY THE LIEN TRANSFER CERTIFICATE EXCEPT FOR  ACTIONS  NECES-
SARY  TO  DEFEND  OR  ENFORCE THE LIEN OR TO COLLECT THE AMOUNTS OWED AS
PROVIDED FOR IN THE LIEN TRANSFER CERTIFICATE, THE LIEN PAYMENT CONTRACT
AND THIS SECTION.  NOTHING IN THIS SECTION SHALL BE CONSTRUED TO  CHANGE
THE  PRIORITIES  OF  THE  LIENS BEING TRANSFERRED OR THE PRIORITY OF ANY
OTHER LIEN AGAINST SUCH PROPERTY.
  4. THE LIEN TRANSFER CERTIFICATE  SHALL  BE  RECORDED  IN  ANY  COUNTY
CLERKS'  OFFICE  WHERE THE PROPERTY IS SITUATED AND THE TRANSFEREE SHALL
PAY ANY STATUTORY FEE FOR SAID RECORDING.  FAILURE TO COMPLY  WITH  THIS
PROVISION  HAS  NO EFFECT ON THE VALIDITY OF THE TRANSFERRED LIEN OR THE
ENFORCEABILITY OF THE LIEN PAYMENT CONTRACT.  IN THOSE TAXING  DISTRICTS
THAT  USE  A GRANTOR/GRANTEE INDEX SYSTEM THE COUNTY CLERK'S OR THE CITY
REGISTER'S OFFICE SHALL CREATE A NEW INDEX FOR THE RECORDING OF TAX LIEN
TRANSFER CERTIFICATES AND IN THOSE TAXING JURISDICTIONS THAT USE A BLOCK
INDEXING SYSTEM, THE COUNTY CLERK'S  OR  CITY  REGISTER'S  OFFICE  SHALL
CREATE A NEW INDEX TO BE RECORDED AGAINST THE BLOCK AND LOT.
  S  977-B.  LIEN  TRANSFER  AUTHORIZATION.  1. A DOCUMENT BY A PROPERTY
OWNER AUTHORIZING THE TRANSFER  OF  LIENS  MUST  CONTAIN  THE  FOLLOWING
INFORMATION AND BE IN SUBSTANTIALLY THE FOLLOWING FORM:
  LIEN TRANSFER AUTHORIZATION PURSUANT TO REAL PROPERTY TAX LAW SECTION
                                  977-B
PROPERTY OWNER:
PARCEL IDENTIFICATION:
YEARS:
AMOUNT  DUE: (INCLUDE AMOUNT OF ORIGINAL LIEN PLUS ALL ASSOCIATED PENAL-
TIES, INTEREST, COSTS AND FEES)
ACCOUNT NUMBER OR IDENTIFICATION CODE:
     I (NAME OF OWNER(S) OR OWNER'S  AUTHORIZED  REPRESENTATIVE)  OWN(S)
THE  REAL  PROPERTY  LOCATED  IN  THE  COUNTY  OF  (INSERT COUNTY NAME),
("TAXING DISTRICT") WITH THE STREET ADDRESS KNOWN AS AND AS  MORE  FULLY
DESCRIBED  BY  ITS  LEGAL  DESCRIPTION  AS:  (INSERT  STREET  AND  LEGAL
ADDRESSES). PURSUANT TO SECTION 977-B OF THE REAL PROPERTY  TAX  LAW,  I
HEREBY AUTHORIZE THE TREASURER (TAX COLLECTOR, COMPTROLLER, REAL PROPER-
TY  DIRECTOR)  TO TRANSFER THE LIEN(S) HELD ON THE PROPERTY LISTED ABOVE
TO (NAME OF PERSON OR ENTITY) ("TRANSFEREE"). I HEREBY AUTHORIZE  TRANS-
FEREE  TO  ADVANCE FUNDS IN CONSIDERATION FOR THE TRANSFER OF THE TAXING
DISTRICT'S LIEN(S) IN AN AMOUNT EQUAL TO THE LIEN BALANCE, INCLUDING ALL
TAXES, PENALTIES, INTEREST, COLLECTION  COSTS  AND  OTHER  LIEN  CHARGES
IMPOSED  BY THE TAXING DISTRICT ON THE REAL PROPERTY DESCRIBED ABOVE FOR
THE YEARS AS LISTED HEREIN:   (LIST  TAX  YEARS,  TAX  AMOUNTS  AND  TAX
CERTIFICATE NUMBER(S)).
     I  FURTHER AUTHORIZE AND DIRECT THE TAXING DISTRICT TO ISSUE A LIEN
RECEIPT WITH THE TAXING DISTRICT'S SEAL TO THE TRANSFEREE AND TO CERTIFY

S. 6817--B                          4

1) RECEIPT OF PAYMENT FROM THE TRANSFEREE ON BEHALF OF THE OWNER; AND 2)
TRANSFER OF THE LIEN(S) ON THE OWNER'S PROPERTY TO THE TRANSFEREE.
_______________________________
(OWNER(S) OR AUTHORIZED REPRESENTATIVE)
SUBSCRIBED AND SWORN TO BEFORE ME
ON THIS, THE ____ DAY OF __________,
20____ BY (INSERT NAME OF SIGNER.)
__________________________________
NOTARY PUBLIC, STATE OF NEW YORK
DATE SIGNED (INSERT NOTARY'S SEAL)
  2. IF THE PROPERTY OWNER AUTHORIZES THE TRANSFER OF LIENS FOR MULTIPLE
YEARS  OR  FOR  MULTIPLE  PROPERTY  LIENS  ASSESSED  BY  THE SAME TAXING
DISTRICT, THE AUTHORIZATION FOR ALL OF THE LIENS MAY  BE  COMBINED  INTO
ONE FORM.
  S  977-C.  LIEN  TRANSFER CERTIFICATE. 1. A CERTIFIED STATEMENT ISSUED
UNDER THIS SECTION BY A TAXING DISTRICT FOR THE PURPOSE OF MEMORIALIZING
THE TRANSFER OF A LIEN SHALL CONTAIN THE FOLLOWING INFORMATION AND SHALL
BE IN SUBSTANTIALLY THE FOLLOWING FORM:
     LIEN TRANSFER CERTIFICATE PURSUANT TO SECTION 977-C OF THE REAL
                            PROPERTY TAX LAW
PROPERTY  DESCRIPTION:  (INSERT  PHYSICAL  ADDRESS  AS  WELL  AS   LEGAL
DESCRIPTION)
TAX OR PROPERTY ACCOUNT NUMBER:
YEAR(S) OF LIEN ASSESSMENT: (INSERT YEAR(S) OF LIENS TRANSFERRED)
TAXING DISTRICT(S):
AMOUNTS PAID: (AMOUNT OF LIEN AND ANY LIEN CERTIFICATE(S) TRANSFERRED)
TAX CERTIFICATE NUMBER: TRANSFEREE: (INSERT NAME OF TRANSFEREE)
     I,  (INSERT  NAME),  (TITLE,  E.G., TREASURER, TAX COLLECTOR, COMP-
TROLLER, REAL PROPERTY DIRECTOR) FOR (TAXING DISTRICT(S), E.G.,  COUNTY,
CITY,  VILLAGE,  TOWN),  CERTIFY THAT I HAVE RECEIVED AUTHORIZATION FROM
THE OWNER(S) OF THE PROPERTY OR  PROPERTIES  LISTED  ABOVE  (OR  ON  THE
ATTACHED  EXHIBIT)  TO  TRANSFER  THE  LIEN(S)  TO THE TRANSFEREE LISTED
ABOVE; THAT TRANSFEREE HAS TENDERED THE AMOUNTS PAID TO THE NAMED TAXING
DISTRICTS ON THE  PROPERTY  AS  CONSIDERATION  FOR  A  TRANSFER  OF  THE
LIEN(S);  AND  THAT THE LIEN(S) HELD BY TAXING DISTRICTS ON THE PROPERTY
FOR THE YEARS LISTED ABOVE  ARE  HEREBY  TRANSFERRED  TO  TRANSFEREE  IN
ACCORDANCE  WITH  REAL  PROPERTY  TAX LAW SECTION 977-C. I HAVE ISSUED A
RECEIPT TO TRANSFEREE IN CONJUNCTION WITH THIS CERTIFICATION  REFLECTING
THE  PAYMENT  FOR THE TRANSFER IN THE AMOUNT OF TAXES, PENALTIES, INTER-
EST, AND COLLECTION COSTS DUE.
__________________________________________
(SIGNATURE OF  TREASURER  (TAX  COLLECTOR,  COMPTROLLER,  REAL  PROPERTY
DIRECTOR)
SEAL OF TAXING DISTRICT                    DATE: ____________
(IF NO SEAL OF OFFICE CAN BE PROVIDED, SIGNATURE SHOULD BE NOTARIZED.)
  2.  IF  A PROPERTY OWNER AUTHORIZES THE TRANSFER OF PROPERTY LIENS FOR
MULTIPLE YEARS OR FOR MULTIPLE LIENS ASSESSED OR COLLECTED BY  THE  SAME
TAXING  DISTRICT,  THE  STATEMENT  CERTIFYING  THE TRANSFER OF THE LIENS
SHALL BE COMBINED INTO ONE FORM.
  3. A TAXING DISTRICT MAY CHARGE A REASONABLE FEE NOT TO  EXCEED  TWEN-
TY-FIVE  DOLLARS FOR EACH STATEMENT CERTIFYING THE TRANSFER OF THE LIENS
ON PROPERTY.
  S 977-D. LIEN PAYMENT CONTRACT. 1. A PROPERTY OWNER MAY ENTER  INTO  A
LIEN PAYMENT CONTRACT WITH A TRANSFEREE. THE LIEN PAYMENT CONTRACT SHALL
SET  FORTH  SUCH  TERMS  AND  CONDITIONS TO WHICH THE TRANSFEREE AND THE

S. 6817--B                          5

PROPERTY OWNER MAY AGREE REGARDING THE PAYMENT OF THE  TRANSFERRED  LIEN
TO THE TRANSFEREE.
  2.  THE TRANSFERRED LIEN SHALL SECURE ALL AMOUNTS OWED AS PERMITTED BY
THE LIEN PAYMENT CONTRACT AND THIS SECTION.
  3. ANY FEES TO EFFECT THE TRANSFER OF A LIEN OR TO  SERVICE  A  TRANS-
FERRED LIEN MAY, AT THE PROPERTY OWNER'S REQUEST AND WRITTEN CONSENT, BE
INCLUDED  IN  AND MADE A PART OF THE AMOUNTS OWED UNDER THE LIEN PAYMENT
CONTRACT. IF THE SUBJECT PROPERTY IS OWNED AND OCCUPIED BY THE  PROPERTY
OWNER  AS  THE OWNER'S PRINCIPAL RESIDENCE, ADDITIONAL CHARGES TO EFFECT
THE TRANSFER SHALL BE LIMITED AS FOLLOWS:  AN  APPLICATION  FEE  NOT  TO
EXCEED  TWO  HUNDRED FIFTY DOLLARS, FEES FOR TITLE CHARGES NOT TO EXCEED
FOUR HUNDRED DOLLARS, REASONABLE AND CUSTOMARY ATTORNEY'S  FEES  NOT  TO
EXCEED  ONE  THOUSAND DOLLARS AND REASONABLE AND CUSTOMARY CLOSING COSTS
NOT TO EXCEED FIVE HUNDRED DOLLARS. ALL COSTS AND FEES  ASSOCIATED  WITH
ENFORCING  THE  RIGHTS  OF  THE  TRANSFEREE  UNDER THE TERMS OF THE LIEN
PAYMENT CONTRACT AND THIS SECTION ALSO MAY BE INCLUDED IN THE AMOUNT DUE
UNDER THE LIEN PAYMENT CONTRACT AND MAY BE LIMITED BY A COURT OF  COMPE-
TENT  JURISDICTION.  THE  LIEN PAYMENT CONTRACT MAY ALSO PROVIDE THAT IN
THE EVENT THAT THE PROPERTY OWNER INITIATES A BANKRUPTCY PROCEEDING, THE
TRANSFEREE SHALL BE ENTITLED TO RECOVER ALL FEES AND COSTS  INCURRED  IN
PROTECTING ITS RIGHTS IN THE PROCEEDING.
  4.  THE  TRANSFEREE MAY COLLECT INTEREST ON THE AMOUNTS OWED UNDER THE
LIEN PAYMENT CONTRACT AT THE RATE  OF  INTEREST  CHARGED  ON  DELINQUENT
LIENS  BY THE TAXING DISTRICT THAT TRANSFERRED THE LIEN, EXCEPT THE RATE
OF INTEREST COLLECTED  BY  THE  TRANSFEREE  SHALL  NOT  EXCEED  ONE  AND
ONE-HALF  PERCENT  PER  MONTH REGARDLESS OF THE INTEREST RATE CHARGED ON
THE DELINQUENT LIENS BY THE TAXING DISTRICT THAT TRANSFERRED  THE  LIEN.
THE  AMOUNT  OWED MAY INCLUDE TAXES, PENALTIES, INTEREST, FEES AND COSTS
AS AGREED TO BETWEEN THE PROPERTY OWNER AND THE TRANSFEREE IN  THE  LIEN
PAYMENT  CONTRACT,  BUT  MAY  NOT INCLUDE FUNDS ADVANCED TO THE PROPERTY
OWNER FOR ANY OTHER PURPOSE. IF THE PROPERTY OWNER OWNS AND OCCUPIES THE
SUBJECT PROPERTY AS THE OWNER'S PRINCIPAL RESIDENCE,  THE  LIEN  PAYMENT
CONTRACT MAY NOT CONTAIN A PENALTY FOR EARLY PAYMENT OF THE AMOUNTS OWED
UNDER THE LIEN PAYMENT CONTRACT.
  5. NOTHING CONTAINED IN THIS SECTION SHALL BE DEEMED TO CREATE A MORT-
GAGE,  NOTE OR OTHER INSTRUMENT OR LIEN GOVERNED BY ANY STATE OR FEDERAL
LAW REGULATING MORTGAGE AGREEMENTS, NOR SHALL THE AMOUNT OWED UNDER  THE
LIEN  PAYMENT CONTRACT BE CONSIDERED DEBT FOR PERSONAL, FAMILY OR HOUSE-
HOLD PURPOSES. THE LIEN PAYMENT CONTRACT SHALL BE DEEMED A CONTRACT  FOR
THE  PAYMENT  OF  AMOUNTS OWING TO LOCAL TAXING DISTRICTS AND ASSOCIATED
OBLIGATIONS AND SHALL BE GOVERNED BY THIS TITLE AND  GENERAL  PRINCIPLES
OF  CONTRACT  LAW,  EXCEPT  FOR THE FORECLOSURE OF THE TRANSFERRED LIEN,
WHICH IS SUBJECT TO THE RULES AND REGULATIONS GOVERNING  MORTGAGE  FORE-
CLOSURES AS DETAILED IN THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  6.  ONCE A YEAR, BUT NO LATER THAN THE FIRST OF FEBRUARY OF EACH YEAR,
THE TRANSFEREE SHALL PROVIDE A STATEMENT  OF  ACCOUNT  TO  THE  PROPERTY
OWNER.  EACH  STATEMENT OF ACCOUNT SHALL INCLUDE NAME, ADDRESS AND TELE-
PHONE NUMBER OF THE SERVICER OF THE LIEN  PAYMENT  CONTRACT;  THE  TOTAL
AMOUNT  PAID  IN  THE  PRIOR CALENDAR YEAR; THE TOTAL AMOUNT OF INTEREST
PAID FOR THAT YEAR; AND THE AMOUNT REMAINING TO BE PAID UNDER  THE  LIEN
PAYMENT CONTRACT.
  7.  IF THE PERSON OR ENTITY SERVICING THE LIEN PAYMENT CONTRACT CHANG-
ES, THE TRANSFEREE SHALL SEND WRITTEN NOTICE TO THE  PROPERTY  OWNER  OF
THE  NAME,  ADDRESS AND TELEPHONE NUMBER OF THE NEW LIEN SERVICER WITHIN
TEN BUSINESS DAYS OF THE CHANGE IN ADMINISTRATION.

S. 6817--B                          6

  S 977-E. ENFORCEMENT. 1. THE TRANSFEREE MAY FILE AN ACTION TO  ENFORCE
THE  TERMS  AND  CONDITIONS OF THE TRANSFERRED LIEN AND THE LIEN PAYMENT
CONTRACT, THE TRANSFEREE SHALL ENFORCE SAID CONTRACT PURSUANT TO ARTICLE
THIRTEEN OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  2.  THE  TRANSFEREE  IS  ENTITLED  TO RECOVER REASONABLE AND CUSTOMARY
COSTS AND FEES TO FORECLOSE OR ENFORCE THE TRANSFERRED LIEN.  THE  COSTS
AND  FEES  MUST BE APPROVED BY A COURT OF COMPETENT JURISDICTION AND THE
PROPERTY TAX PAYOR MAY BE REQUIRED TO SUBMIT PROOF OF  THEIR  INCURRENCE
TO THE COURT. RECOVERABLE FEES AND COSTS MAY INCLUDE:
  (A) ATTORNEY'S FEES;
  (B)  CHARGES  TO  VERIFY OWNERSHIP OF THE PROPERTY, NOT TO EXCEED FOUR
HUNDRED DOLLARS;
  (C) FEES FOR RECORDING NOTICES AND DOCUMENTS RELATED TO  THE  FORECLO-
SURE;
  (D) COSTS OF PROVIDING NOTICE, INCLUDING SERVICE OF PROCESS AND ADVER-
TISEMENT; AND
  (E)  OTHER  FEES AND COSTS LEGALLY REQUIRED TO FORECLOSE OR TO ENFORCE
THE TRANSFERRED LIEN.
  3. A FORECLOSURE OF A LIEN TRANSFERRED AS  PROVIDED  BY  SECTION  NINE
HUNDRED  SEVENTY-SEVEN-A  OF THIS TITLE MAY NOT BE INSTITUTED WITHIN ONE
YEAR FROM THE LATEST DATE ON WHICH THE LIEN IS RECORDED IN ALL  COUNTIES
IN  WHICH  THE  PROPERTY  IS  LOCATED,  UNLESS THE LIEN PAYMENT CONTRACT
BETWEEN THE OWNER OF THE PROPERTY AND THE TRANSFEREE PROVIDES OTHERWISE.
  4. NOTHING IN THIS SECTION SHALL BE DEEMED TO AFFECT THE RIGHTS  OF  A
TAXING DISTRICT UNDER ARTICLE ELEVEN OF THIS CHAPTER.
  S  977-F. LIEN REPAYMENT AND RELEASE. 1. THE PROPERTY OWNER MAY OBTAIN
A RELEASE OF THE TRANSFERRED LIEN BY PAYING THE  TRANSFEREE  THE  AMOUNT
DUE  UNDER  THE  LIEN  PAYMENT CONTRACT AT ANY TIME AFTER THE TRANSFEREE
FILES A LIS PENDENS IN CONNECTION WITH A FORECLOSURE PROCEEDING  OF  THE
SUBJECT PROPERTY.
  2.  A  PRIOR RECORDED FIRST LIEN MORTGAGEE MAY OBTAIN A RELEASE OF THE
TRANSFERRED LIEN BY PAYING THE TRANSFEREE THE AMOUNT DUE UNDER THE  LIEN
PAYMENT CONTRACT:
  (A) AT ANY TIME AFTER THE TRANSFEREE FILES A LIS PENDENS IN CONNECTION
WITH A FORECLOSURE PROCEEDING OF THE SUBJECT PROPERTY;
  (B)  UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT STATING THAT THE PROP-
ERTY OWNER IS NINETY DAYS OR MORE  DELINQUENT  IN  THE  PAYMENT  OF  THE
OWNER'S FIRST LIEN MORTGAGE;
  (C) UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT FROM THE PROPERTY OWNER
AUTHORIZING THE PAYMENT AND RELEASE; OR
  (D) AT THE TRANSFEREE'S DISCRETION.
  3.  IF  A  TRANSFEREE  FORECLOSES  ON A TRANSFERRED LIEN, THE PROPERTY
OWNER OR THE SERVICER OF A PRIOR RECORDED FIRST LIEN MORTGAGE  IS  ENTI-
TLED  TO  COMPEL CONVEYANCE OF THE FORECLOSED PROPERTY FROM THE OWNER AT
THE TIME OF CONVEYANCE BY PAYING THE OWNER AT THE TIME OF CONVEYANCE:
  (A) ONE HUNDRED TWENTY PERCENT OF THE AMOUNT PAID BY THE PURCHASER  AT
THE FORECLOSURE SALE; AND
  (B)  THE  AMOUNT  REASONABLY SPENT BY THE PURCHASER IN CONNECTION WITH
THE MAINTENANCE AND SAFE KEEPING OF THE PROPERTY PLUS THE LEGAL JUDGMENT
RATE OF RETURN ON THAT AMOUNT. THE PROPERTY PURCHASER SHALL BE  ENTITLED
TO  RECOVER  ONLY THOSE MAINTENANCE AND SAFE KEEPING COSTS FOR WHICH THE
PURCHASER CAN PROVIDE WRITTEN PROOF.
  4. THE RIGHT OF REPAYMENT AND CONVEYANCE PROVIDED BY THIS SECTION  MAY
BE EXERCISED NOT LATER THAN THE ONE HUNDRED EIGHTIETH DAY AFTER THE DATE
ON  WHICH  THE REFEREE'S DEED IS FILED IN THE OFFICE OF THE COUNTY CLERK
OF THE COUNTY WHERE THE PROPERTY IS SITUATED.

S. 6817--B                          7

  S 977-G. COLLECTION OF  LIEN  INFORMATION.  1.  TWICE  ANNUALLY,  EACH
TAXING  DISTRICT  SHALL PROVIDE TO THE COMMISSIONER A REPORT, IN SPREAD-
SHEET OR  COMMA  DELIMITED  ELECTRONIC  FORMAT,  OF  ALL  REAL  PROPERTY
ACCOUNTS  IN  SAID  TAXING DISTRICT THAT HAVE UNPAID PROPERTY TAXES. THE
REPORTS  SHALL  BE DUE ON OR AROUND JANUARY FIRST AND OCTOBER FIRST. THE
JANUARY REPORT SHALL CONTAIN A LISTING OF ALL  TAX  ACCOUNTS  THAT  SHOW
REAL  PROPERTY  TAXES DUE. THE OCTOBER REPORT SHALL CONTAIN A LISTING OF
ALL TAX ACCOUNTS THAT SHOW REAL  PROPERTY  TAXES  DELINQUENT.  FOR  EACH
ACCOUNT,  SAID  LISTINGS SHALL INCLUDE THE DATA FROM THE TAX ROLL OF THE
TAXING DISTRICT, INCLUDING BUT NOT LIMITED TO THE PROPERTY OWNER'S  NAME
AND  ADDRESS,  THE PROPERTY ADDRESS, THE PROPERTY PARCEL IDENTIFIER, THE
PROPERTY TYPE CLASSIFICATION CODE (FOR EXAMPLE,  AGRICULTURAL,  RESIDEN-
TIAL, COMMERCIAL OR VACANT LAND), THE ASSESSED VALUE OF THE REAL PROPER-
TY AND THE IMPROVEMENTS THEREON, THE EXEMPTIONS, IF ANY, ON THE PROPERTY
AND THE YEAR(S) AND AMOUNT DUE OR DELINQUENT.
  2.  THE  SUPERINTENDENT  OF  FINANCIAL  SERVICES SHALL CONSOLIDATE THE
REPORTS FROM ALL  TAXING  DISTRICTS.  THE  SUPERINTENDENT  OF  FINANCIAL
SERVICES SHALL MAKE THE CONSOLIDATED REPORT AVAILABLE TO ANY PERSON UPON
REQUEST,  IN  SPREADSHEET  OR  COMMA  DELIMITED  ELECTRONIC FORMAT, AT A
REASONABLE PRICE NOT TO EXCEED FIVE HUNDRED DOLLARS.
  3. THE SUPERINTENDENT OF FINANCIAL SERVICES SHALL PROMULGATE RULES  TO
IMPLEMENT THIS SECTION.
  S  5.  This  act shall take effect on the ninetieth day after it shall
have become a law.

Co-Sponsors

S6817C (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A9990
Current Committee:
Law Section:
Insurance Law
Laws Affected:
Add Art 9 Title 4-B §§977 - 977-g, RPT L; amd §§6403 & 6406, Ins L

S6817C (ACTIVE) - Bill Texts

view summary

Provides that a private third party may contract with a property owner to pay real property taxes in exchange for transfer of liens on the property to the transferee.

view sponsor memo
BILL NUMBER:S6817C

TITLE OF BILL:
An act to amend the insurance law and the real property tax law, in
relation to local government liens and payment contracts

PURPOSE OR GENERAL IDEA OF BILL:
Under this bill, a property owner may authorize a third party to pay
the owner's property taxes. In exchange for the third party paying the
taxing district the full amount of taxes and associated penalties and
interest, the tax collector transfers the tax lien to the third party
payor. The property owner then repays the transferee over time under
agreed-upon, more flexible terms. This bill accomplishes two important
purposes: (1) increases local government tax collections and (2)
allows property owners flexibility in meeting the burden of paying
their property taxes.

Under this bill, a local government will receive funds that it might
otherwise have to wait on or recover through an in rem foreclosure
action. This legislation will help local governments across the state
that are struggling to balance their budgets and seeking to minimize
foreclosures.

The legislation also benefits New York property owners because it
gives property owners the opportunity to pay their taxes over time.
Property owners could obtain manageable repayment agreements instead
of having to make a single lump sum payment - a meaningful benefit in
this difficult economy. These benefits accrue to both homeowners who
want to keep their homes and commercial property owners who want to
keep their business properties, preserve jobs, and expand their
businesses with cash on hand.

The bill also provides various protections for homeowners and
commercial property owners, including a maximum allowable interest
rate, pre-enforcement notice requirements, change of servicer notice,
annual notice to borrower with status of account, and a lien repayment
and release option. These provisions are much more consumer-oriented
and protective than current options. For example, a taxing district
currently has the option to conduct an in rem foreclosure on a
tax-delinquent property a much speedier process.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 is the Legislative intent of the bill.
Section 2 and 3 relate to the powers of title insurance Corporations.
Section 4 Establishes Title 4-B of the Real property Tax Law
relating to Lien Payment Contracts
Section 5 is the effective date.

STATEMENT IN SUPPORT:
Local governments rely heavily on property taxes to fund their
services, but property owners have found it increasingly difficult to
comply with the strict statutory requirements for paying their taxes.
The result is that local governments must rely on increased
foreclosures or bulk lien sales to collect their taxes. The property
owners thus are faced with either the possibility of foreclosure or
repaying an unknown third party. This bill does not create any new


liens or obligations for property owners; instead, it gives them the
option of authorizing the transfer of their existing tax liens from
the public entity to a private one.
The owner will have the ability to negotiate and approve the repayment
terms before the transferee ever makes the payment to the tax
collector and the transferee will not be allowed to add on excessive
fees, costs, or interest to the amount the owner owes. The
legislation would have no effect on local governments' ability to
utilize bulk tax lien sales.

The result will be increased tax collections, fewer lien foreclosures,
and increased financial flexibility for New York property owners.

PRIOR LEGISLATIVE HISTORY:
New Bill.

FISCAL IMPLICATIONS:
None to the state but improved tax collections for tax districts.

EFFECTIVE DATE:
This act shall become effective on the ninetieth day after it becomes

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

                                 6817--C

                            I N  S E N A T E

                             March 26, 2012
                               ___________

Introduced  by Sens. MAZIARZ, NOZZOLIO, PARKER -- read twice and ordered
  printed, and when printed to be committed to the  Committee  on  Local
  Government -- committee discharged, bill amended, ordered reprinted as
  amended  and  recommitted to said committee -- reported favorably from
  said committee and committed to the Committee on Finance --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee  --  committee  discharged,  bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the insurance law and the  real  property  tax  law,  in
  relation to local government liens and payment contracts

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

  Section 1.  Legislative  intent.  The  legislature  finds  that  local
governments  are struggling under the weight of increased costs, reduced
revenues and increased stresses on their respective budgets. The  legis-
lature  also  finds that property owners are struggling under the weight
of high property taxes and other local government assessments  and  need
assistance  in  paying  those amounts in order to prevent foreclosure or
the sale of the liens to third parties  involuntarily.  The  legislature
finds  that it is in the best interests of the residents of the state of
New York and the local governments to allow property owners to voluntar-
ily enter into agreements with  private  entities  whereby  the  private
parties  assume  the  position  of the local governments for assessments
such as property taxes and water and sewer charges. Currently,  property
owners  are required to pay these assessments in full. Allowing property
owners to increase the payment term will help alleviate the pressure  on
these already financially stressed residents and business owners.  More-
over,  local  governments  will  increase  their revenue collections and
spend less on actions such as tax lien sales and  lien  foreclosures  to
collect  unpaid liens, because the lien payors will pay the liens to the
local governments in full, all at once.
  S 2. Paragraph 5 of subsection (b) of section 6403  of  the  insurance
law is amended to read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15093-06-2

S. 6817--C                          2

  (5)  To  invest in or acquire for resale, (i) obligations secured by a
mortgage (including any part of an issue of such obligations) which  are
insured or committed to be insured by the Federal Housing Administrator,
or (ii) debentures lawfully issued by the Federal Housing Administrator,
OR  LOANS  SECURED  BY  LIENS ON REAL PROPERTY ISSUED BY A COUNTY, CITY,
TOWN OR VILLAGE IN NEW YORK STATE.
  S 3. Paragraph 2 of subsection (b) of section 6406  of  the  insurance
law is amended to read as follows:
  (2)  Any  such corporation may invest in loans secured by mortgages on
real property guaranteed as to  principal  or  interest  by  the  United
States OR SECURED BY A LIEN ON REAL PROPERTY.
  S 4. Article 9 of the real property tax law is amended by adding a new
title 4-B to read as follows:
                                 TITLE 4-B
                         LIEN PAYMENT CONTRACTS
SECTION 977. DEFINITIONS.
        977-A. LIEN TRANSFER.
        977-B. LIEN TRANSFER AUTHORIZATION.
        977-C. LIEN TRANSFER CERTIFICATE.
        977-D. LIEN PAYMENT CONTRACT.
        977-E. ENFORCEMENT.
        977-F. LIEN REPAYMENT AND RELEASE.
        977-G. COLLECTION OF LIEN INFORMATION.
  S  977.  DEFINITIONS.  AS USED IN THIS TITLE THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  1. "TAXING DISTRICT" SHALL MEAN ANY LOCAL GOVERNMENT  ENTITY,  INCLUD-
ING,  ANY  CITY,  TOWN,  VILLAGE,  COUNTY,  SCHOOL  DISTRICT  OR SPECIAL
DISTRICT, THAT IMPOSES TAXES, SPECIAL AD VALOREM LEVIES, WATER OR  SEWER
CHARGES OR SPECIAL ASSESSMENTS ON REAL PROPERTY.
  2.  "LIEN  PAYMENT"  MEANS  THE  AMOUNT  OF MONEY ADVANCED TO A TAXING
DISTRICT ON BEHALF OF A PROPERTY OWNER IN CONSIDERATION FOR THE TRANSFER
OF LIENS FOR PROPERTY TAXES OR WATER OR SEWER  CHARGES  ON  THE  OWNER'S
REAL PROPERTY PURSUANT TO A LIEN TRANSFER AUTHORIZATION AND LIEN PAYMENT
CONTRACT.
  3.  "LIEN  TRANSFER AUTHORIZATION" SHALL HAVE THE MEANING AS SET FORTH
IN SECTION NINE HUNDRED SEVENTY-SEVEN-B OF THIS TITLE.
  4. "LIEN TRANSFER CERTIFICATE" SHALL HAVE THE MEANING AS SET FORTH  IN
SECTION NINE HUNDRED SEVENTY-SEVEN-C OF THIS TITLE.
  5.  "LIEN  PAYMENT CONTRACT" SHALL MEAN A WRITTEN CONTRACT BETWEEN THE
TRANSFEREE AND THE PROPERTY OWNER AS SET FORTH IN SECTION  NINE  HUNDRED
SEVENTY-SEVEN-D OF THIS TITLE.
  6.  "REFEREE'S  DEED" SHALL MEAN THE DEED ISSUED TO THE PURCHASER AT A
FORECLOSURE SALE AT THE COURTHOUSE STEPS.
  7. "TRANSFEREE" MEANS A PERSON WHO ADVANCES MONEY DIRECTLY TO A TAXING
DISTRICT AT THE REQUEST OF A PROPERTY OWNER  IN  CONSIDERATION  FOR  THE
TRANSFER OF LIENS ON THE OWNER'S REAL PROPERTY.
  S  977-A. LIEN TRANSFER. 1. A PROPERTY OWNER MAY EXECUTE A DOCUMENT AS
DETAILED HEREIN IN THE  FORM  OF  A  LIEN  TRANSFER  AUTHORIZATION  THAT
CONSENTS  TO AND AUTHORIZES THE TRANSFER OF A TAXING DISTRICT'S LIENS ON
THE OWNER'S REAL PROPERTY TO A TRANSFEREE WHEN  THE  TRANSFEREE  TENDERS
THE LIEN PAYMENT TO THE TAXING DISTRICT ON BEHALF OF THE PROPERTY OWNER.
THE TAXING DISTRICT SHALL NOTATE IN ITS RECORDS INDICATING THE ENTITY TO
WHICH THE TAX LIEN IS BEING TRANSFERRED TO INCLUDE THE NAME, ADDRESS AND
PHONE NUMBER OF SAID ENTITY.
  2. WITHIN THIRTY DAYS OF RECEIPT BY THE TAXING DISTRICT OF THE PROPER-
TY  OWNER'S  LIEN  TRANSFER  AUTHORIZATION AND THE LIEN PAYMENT FROM THE

S. 6817--C                          3

TRANSFEREE, THE TAXING DISTRICT SHALL EXECUTE A  LIEN  TRANSFER  CERTIF-
ICATE ACKNOWLEDGING THAT THE REAL PROPERTY LIENS ON THE SUBJECT PROPERTY
ARE  TRANSFERRED  TO  THE  TRANSFEREE.  THE LIEN TRANSFER CERTIFICATE AS
DETAILED  IN  SECTION  NINE  HUNDRED SEVENTY-SEVEN-C OF THIS TITLE SHALL
CERTIFY THAT THE TAXING DISTRICT RECEIVED THE PROPERTY  OWNER'S  WRITTEN
AUTHORIZATION  TO  TRANSFER THE LIENS; THAT THE TRANSFEREE PAID THE LIEN
PAYMENT; AND THAT THE TAXING DISTRICT'S LIENS  ARE  TRANSFERRED  TO  THE
TRANSFEREE IN THE AMOUNTS LISTED IN THE LIEN TRANSFER CERTIFICATE.
  3. IN ADDITION TO THE RIGHTS PROVIDED UNDER THE LIEN PAYMENT CONTRACT,
THE  TRANSFEREE  AND  ITS  HEIRS AND ASSIGNS, SHALL BE SUBROGATED TO AND
HAVE ALL OF THE RIGHTS, REMEDIES AND PRIORITIES AS THE  TAXING  DISTRICT
UNDER  APPLICABLE  STATE  OR  FEDERAL LAW, SUBJECT ONLY TO THE TERMS AND
CONDITIONS OF THIS SECTION AND  THE  LIEN  PAYMENT  CONTRACT.  THE  LIEN
TRANSFER  CERTIFICATE MAY NOT PERMIT THE TRANSFEREE TO ACT UPON THE LIEN
REPRESENTED BY THE LIEN TRANSFER CERTIFICATE EXCEPT FOR  ACTIONS  NECES-
SARY  TO  DEFEND  OR  ENFORCE THE LIEN OR TO COLLECT THE AMOUNTS OWED AS
PROVIDED FOR IN THE LIEN TRANSFER CERTIFICATE, THE LIEN PAYMENT CONTRACT
AND THIS SECTION.  NOTHING IN THIS SECTION SHALL BE CONSTRUED TO  CHANGE
THE  PRIORITIES  OF  THE  LIENS BEING TRANSFERRED OR THE PRIORITY OF ANY
OTHER LIEN AGAINST SUCH PROPERTY.
  4. THE LIEN TRANSFER CERTIFICATE  SHALL  BE  RECORDED  IN  ANY  COUNTY
CLERKS'  OFFICE  WHERE THE PROPERTY IS SITUATED AND THE TRANSFEREE SHALL
PAY ANY STATUTORY FEE FOR SAID RECORDING.  FAILURE TO COMPLY  WITH  THIS
PROVISION  HAS  NO EFFECT ON THE VALIDITY OF THE TRANSFERRED LIEN OR THE
ENFORCEABILITY OF THE LIEN PAYMENT CONTRACT.  IN THOSE TAXING  DISTRICTS
THAT  USE  A GRANTOR/GRANTEE INDEX SYSTEM THE COUNTY CLERK'S OR THE CITY
REGISTER'S OFFICE SHALL CREATE A NEW INDEX FOR THE RECORDING OF TAX LIEN
TRANSFER CERTIFICATES AND IN THOSE TAXING JURISDICTIONS THAT USE A BLOCK
INDEXING SYSTEM, THE COUNTY CLERK'S  OR  CITY  REGISTER'S  OFFICE  SHALL
CREATE A NEW INDEX TO BE RECORDED AGAINST THE BLOCK AND LOT.
  S  977-B.  LIEN  TRANSFER  AUTHORIZATION.  1. A DOCUMENT BY A PROPERTY
OWNER AUTHORIZING THE TRANSFER  OF  LIENS  MUST  CONTAIN  THE  FOLLOWING
INFORMATION AND BE IN SUBSTANTIALLY THE FOLLOWING FORM:
  LIEN TRANSFER AUTHORIZATION PURSUANT TO REAL PROPERTY TAX LAW SECTION
                                  977-B
PROPERTY OWNER:
PARCEL IDENTIFICATION:
YEARS:
AMOUNT  DUE: (INCLUDE AMOUNT OF ORIGINAL LIEN PLUS ALL ASSOCIATED PENAL-
TIES, INTEREST, COSTS AND FEES)
ACCOUNT NUMBER OR IDENTIFICATION CODE:
     I (NAME OF OWNER(S) OR OWNER'S  AUTHORIZED  REPRESENTATIVE)  OWN(S)
THE  REAL  PROPERTY  LOCATED  IN  THE  COUNTY  OF  (INSERT COUNTY NAME),
("TAXING DISTRICT") WITH THE STREET ADDRESS KNOWN AS AND AS  MORE  FULLY
DESCRIBED  BY  ITS  LEGAL  DESCRIPTION  AS:  (INSERT  STREET  AND  LEGAL
ADDRESSES). PURSUANT TO SECTION 977-B OF THE REAL PROPERTY  TAX  LAW,  I
HEREBY AUTHORIZE THE TREASURER (TAX COLLECTOR, COMPTROLLER, REAL PROPER-
TY  DIRECTOR)  TO TRANSFER THE LIEN(S) HELD ON THE PROPERTY LISTED ABOVE
TO (NAME OF PERSON OR ENTITY) ("TRANSFEREE"). I HEREBY AUTHORIZE  TRANS-
FEREE  TO  ADVANCE FUNDS IN CONSIDERATION FOR THE TRANSFER OF THE TAXING
DISTRICT'S LIEN(S) IN AN AMOUNT EQUAL TO THE LIEN BALANCE, INCLUDING ALL
TAXES, PENALTIES, INTEREST, COLLECTION  COSTS  AND  OTHER  LIEN  CHARGES
IMPOSED  BY THE TAXING DISTRICT ON THE REAL PROPERTY DESCRIBED ABOVE FOR
THE YEARS AS LISTED HEREIN:   (LIST  TAX  YEARS,  TAX  AMOUNTS  AND  TAX
CERTIFICATE NUMBER(S)).

S. 6817--C                          4

     I  FURTHER AUTHORIZE AND DIRECT THE TAXING DISTRICT TO ISSUE A LIEN
RECEIPT WITH THE TAXING DISTRICT'S SEAL TO THE TRANSFEREE AND TO CERTIFY
1) RECEIPT OF PAYMENT FROM THE TRANSFEREE ON BEHALF OF THE OWNER; AND 2)
TRANSFER OF THE LIEN(S) ON THE OWNER'S PROPERTY TO THE TRANSFEREE.
_______________________________
(OWNER(S) OR AUTHORIZED REPRESENTATIVE)
SUBSCRIBED AND SWORN TO BEFORE ME
ON THIS, THE ____ DAY OF __________,
20____ BY (INSERT NAME OF SIGNER.)
__________________________________
NOTARY PUBLIC, STATE OF NEW YORK
DATE SIGNED (INSERT NOTARY'S SEAL)
  2. IF THE PROPERTY OWNER AUTHORIZES THE TRANSFER OF LIENS FOR MULTIPLE
YEARS  OR  FOR  MULTIPLE  PROPERTY  LIENS  ASSESSED  BY  THE SAME TAXING
DISTRICT, THE AUTHORIZATION FOR ALL OF THE LIENS MAY  BE  COMBINED  INTO
ONE FORM.
  S  977-C.  LIEN  TRANSFER CERTIFICATE. 1. A CERTIFIED STATEMENT ISSUED
UNDER THIS SECTION BY A TAXING DISTRICT FOR THE PURPOSE OF MEMORIALIZING
THE TRANSFER OF A LIEN SHALL CONTAIN THE FOLLOWING INFORMATION AND SHALL
BE IN SUBSTANTIALLY THE FOLLOWING FORM:
     LIEN TRANSFER CERTIFICATE PURSUANT TO SECTION 977-C OF THE REAL
                            PROPERTY TAX LAW
PROPERTY  DESCRIPTION:  (INSERT  PHYSICAL  ADDRESS  AS  WELL  AS   LEGAL
DESCRIPTION)
TAX OR PROPERTY ACCOUNT NUMBER:
YEAR(S) OF LIEN ASSESSMENT: (INSERT YEAR(S) OF LIENS TRANSFERRED)
TAXING DISTRICT(S):
AMOUNTS PAID: (AMOUNT OF LIEN AND ANY LIEN CERTIFICATE(S) TRANSFERRED)
TAX CERTIFICATE NUMBER: TRANSFEREE: (INSERT NAME OF TRANSFEREE)
     I,  (INSERT  NAME),  (TITLE,  E.G., TREASURER, TAX COLLECTOR, COMP-
TROLLER, REAL PROPERTY DIRECTOR) FOR (TAXING DISTRICT(S), E.G.,  COUNTY,
CITY,  VILLAGE,  TOWN),  CERTIFY THAT I HAVE RECEIVED AUTHORIZATION FROM
THE OWNER(S) OF THE PROPERTY OR  PROPERTIES  LISTED  ABOVE  (OR  ON  THE
ATTACHED  EXHIBIT)  TO  TRANSFER  THE  LIEN(S)  TO THE TRANSFEREE LISTED
ABOVE; THAT TRANSFEREE HAS TENDERED THE AMOUNTS PAID TO THE NAMED TAXING
DISTRICTS ON THE  PROPERTY  AS  CONSIDERATION  FOR  A  TRANSFER  OF  THE
LIEN(S);  AND  THAT THE LIEN(S) HELD BY TAXING DISTRICTS ON THE PROPERTY
FOR THE YEARS LISTED ABOVE  ARE  HEREBY  TRANSFERRED  TO  TRANSFEREE  IN
ACCORDANCE  WITH  REAL  PROPERTY  TAX LAW SECTION 977-C. I HAVE ISSUED A
RECEIPT TO TRANSFEREE IN CONJUNCTION WITH THIS CERTIFICATION  REFLECTING
THE  PAYMENT  FOR THE TRANSFER IN THE AMOUNT OF TAXES, PENALTIES, INTER-
EST, AND COLLECTION COSTS DUE.
__________________________________________
(SIGNATURE OF  TREASURER  (TAX  COLLECTOR,  COMPTROLLER,  REAL  PROPERTY
DIRECTOR)
SEAL OF TAXING DISTRICT                    DATE: ____________
(IF NO SEAL OF OFFICE CAN BE PROVIDED, SIGNATURE SHOULD BE NOTARIZED.)
  2.  IF  A PROPERTY OWNER AUTHORIZES THE TRANSFER OF PROPERTY LIENS FOR
MULTIPLE YEARS OR FOR MULTIPLE LIENS ASSESSED OR COLLECTED BY  THE  SAME
TAXING  DISTRICT,  THE  STATEMENT  CERTIFYING  THE TRANSFER OF THE LIENS
SHALL BE COMBINED INTO ONE FORM.
  3. A TAXING DISTRICT MAY CHARGE A REASONABLE FEE NOT TO  EXCEED  TWEN-
TY-FIVE  DOLLARS FOR EACH STATEMENT CERTIFYING THE TRANSFER OF THE LIENS
ON PROPERTY.
  S 977-D. LIEN PAYMENT CONTRACT. 1. A PROPERTY OWNER MAY ENTER  INTO  A
LIEN PAYMENT CONTRACT WITH A TRANSFEREE. THE LIEN PAYMENT CONTRACT SHALL

S. 6817--C                          5

SET  FORTH  SUCH  TERMS  AND  CONDITIONS TO WHICH THE TRANSFEREE AND THE
PROPERTY OWNER MAY AGREE REGARDING THE PAYMENT OF THE  TRANSFERRED  LIEN
TO THE TRANSFEREE.
  2.  THE TRANSFERRED LIEN SHALL SECURE ALL AMOUNTS OWED AS PERMITTED BY
THE LIEN PAYMENT CONTRACT AND THIS SECTION.
  3. ANY FEES TO EFFECT THE TRANSFER OF A LIEN OR TO  SERVICE  A  TRANS-
FERRED LIEN MAY, AT THE PROPERTY OWNER'S REQUEST AND WRITTEN CONSENT, BE
INCLUDED  IN  AND MADE A PART OF THE AMOUNTS OWED UNDER THE LIEN PAYMENT
CONTRACT. IF THE SUBJECT PROPERTY IS OWNED AND OCCUPIED BY THE  PROPERTY
OWNER  AS  THE OWNER'S PRINCIPAL RESIDENCE, ADDITIONAL CHARGES TO EFFECT
THE TRANSFER SHALL BE LIMITED AS FOLLOWS:  AN  APPLICATION  FEE  NOT  TO
EXCEED  TWO  HUNDRED FIFTY DOLLARS, FEES FOR TITLE CHARGES NOT TO EXCEED
FOUR HUNDRED DOLLARS, REASONABLE AND CUSTOMARY ATTORNEY'S  FEES  NOT  TO
EXCEED  ONE  THOUSAND DOLLARS AND REASONABLE AND CUSTOMARY CLOSING COSTS
NOT TO EXCEED FIVE HUNDRED DOLLARS. ALL COSTS AND FEES  ASSOCIATED  WITH
ENFORCING  THE  RIGHTS  OF  THE  TRANSFEREE  UNDER THE TERMS OF THE LIEN
PAYMENT CONTRACT AND THIS SECTION ALSO MAY BE INCLUDED IN THE AMOUNT DUE
UNDER THE LIEN PAYMENT CONTRACT AND MAY BE LIMITED BY A COURT OF  COMPE-
TENT  JURISDICTION.  THE  LIEN PAYMENT CONTRACT MAY ALSO PROVIDE THAT IN
THE EVENT THAT THE PROPERTY OWNER INITIATES A BANKRUPTCY PROCEEDING, THE
TRANSFEREE SHALL BE ENTITLED TO RECOVER ALL FEES AND COSTS  INCURRED  IN
PROTECTING ITS RIGHTS IN THE PROCEEDING.
  4.  THE  TRANSFEREE MAY COLLECT INTEREST ON THE AMOUNTS OWED UNDER THE
LIEN PAYMENT CONTRACT AT THE RATE  OF  INTEREST  CHARGED  ON  DELINQUENT
LIENS  BY THE TAXING DISTRICT THAT TRANSFERRED THE LIEN, EXCEPT THE RATE
OF INTEREST COLLECTED  BY  THE  TRANSFEREE  SHALL  NOT  EXCEED  ONE  AND
ONE-HALF  PERCENT  PER  MONTH REGARDLESS OF THE INTEREST RATE CHARGED ON
THE DELINQUENT LIENS BY THE TAXING DISTRICT THAT TRANSFERRED  THE  LIEN.
THE  AMOUNT  OWED MAY INCLUDE TAXES, PENALTIES, INTEREST, FEES AND COSTS
AS AGREED TO BETWEEN THE PROPERTY OWNER AND THE TRANSFEREE IN  THE  LIEN
PAYMENT  CONTRACT,  BUT  MAY  NOT INCLUDE FUNDS ADVANCED TO THE PROPERTY
OWNER FOR ANY OTHER PURPOSE. IF THE PROPERTY OWNER OWNS AND OCCUPIES THE
SUBJECT PROPERTY AS THE OWNER'S PRINCIPAL RESIDENCE,  THE  LIEN  PAYMENT
CONTRACT MAY NOT CONTAIN A PENALTY FOR EARLY PAYMENT OF THE AMOUNTS OWED
UNDER THE LIEN PAYMENT CONTRACT.
  5. NOTHING CONTAINED IN THIS SECTION SHALL BE DEEMED TO CREATE A MORT-
GAGE,  NOTE OR OTHER INSTRUMENT OR LIEN GOVERNED BY ANY STATE OR FEDERAL
LAW REGULATING MORTGAGE AGREEMENTS, NOR SHALL THE AMOUNT OWED UNDER  THE
LIEN  PAYMENT CONTRACT BE CONSIDERED DEBT FOR PERSONAL, FAMILY OR HOUSE-
HOLD PURPOSES. THE LIEN PAYMENT CONTRACT SHALL BE DEEMED A CONTRACT  FOR
THE  PAYMENT  OF  AMOUNTS OWING TO LOCAL TAXING DISTRICTS AND ASSOCIATED
OBLIGATIONS AND SHALL BE GOVERNED BY THIS TITLE AND  GENERAL  PRINCIPLES
OF  CONTRACT  LAW,  EXCEPT  FOR THE FORECLOSURE OF THE TRANSFERRED LIEN,
WHICH IS SUBJECT TO THE RULES AND REGULATIONS GOVERNING  MORTGAGE  FORE-
CLOSURES AS DETAILED IN THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  6.  ONCE A YEAR, BUT NO LATER THAN THE FIRST OF FEBRUARY OF EACH YEAR,
THE TRANSFEREE SHALL PROVIDE A STATEMENT  OF  ACCOUNT  TO  THE  PROPERTY
OWNER.  EACH  STATEMENT OF ACCOUNT SHALL INCLUDE NAME, ADDRESS AND TELE-
PHONE NUMBER OF THE SERVICER OF THE LIEN  PAYMENT  CONTRACT;  THE  TOTAL
AMOUNT  PAID  IN  THE  PRIOR CALENDAR YEAR; THE TOTAL AMOUNT OF INTEREST
PAID FOR THAT YEAR; AND THE AMOUNT REMAINING TO BE PAID UNDER  THE  LIEN
PAYMENT CONTRACT.
  7.  IF THE PERSON OR ENTITY SERVICING THE LIEN PAYMENT CONTRACT CHANG-
ES, THE TRANSFEREE SHALL SEND WRITTEN NOTICE TO THE  PROPERTY  OWNER  OF
THE  NAME,  ADDRESS AND TELEPHONE NUMBER OF THE NEW LIEN SERVICER WITHIN
TEN BUSINESS DAYS OF THE CHANGE IN ADMINISTRATION.

S. 6817--C                          6

  S 977-E. ENFORCEMENT. 1. THE TRANSFEREE MAY FILE AN ACTION TO  ENFORCE
THE  TERMS  AND  CONDITIONS OF THE TRANSFERRED LIEN AND THE LIEN PAYMENT
CONTRACT, THE TRANSFEREE SHALL ENFORCE SAID CONTRACT PURSUANT TO ARTICLE
THIRTEEN OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW.
  2.  THE  TRANSFEREE  IS  ENTITLED  TO RECOVER REASONABLE AND CUSTOMARY
COSTS AND FEES TO FORECLOSE OR ENFORCE THE TRANSFERRED LIEN.  THE  COSTS
AND  FEES  MUST BE APPROVED BY A COURT OF COMPETENT JURISDICTION AND THE
PROPERTY TAX PAYOR MAY BE REQUIRED TO SUBMIT PROOF OF  THEIR  INCURRENCE
TO THE COURT. RECOVERABLE FEES AND COSTS MAY INCLUDE:
  (A) ATTORNEY'S FEES;
  (B)  CHARGES  TO  VERIFY OWNERSHIP OF THE PROPERTY, NOT TO EXCEED FOUR
HUNDRED DOLLARS;
  (C) FEES FOR RECORDING NOTICES AND DOCUMENTS RELATED TO  THE  FORECLO-
SURE;
  (D) COSTS OF PROVIDING NOTICE, INCLUDING SERVICE OF PROCESS AND ADVER-
TISEMENT; AND
  (E)  OTHER  FEES AND COSTS LEGALLY REQUIRED TO FORECLOSE OR TO ENFORCE
THE TRANSFERRED LIEN.
  3. A FORECLOSURE OF A LIEN TRANSFERRED AS  PROVIDED  BY  SECTION  NINE
HUNDRED  SEVENTY-SEVEN-A  OF THIS TITLE MAY NOT BE INSTITUTED WITHIN ONE
YEAR FROM THE LATEST DATE ON WHICH THE LIEN IS RECORDED IN ALL  COUNTIES
IN  WHICH  THE  PROPERTY  IS  LOCATED,  UNLESS THE LIEN PAYMENT CONTRACT
BETWEEN THE OWNER OF THE PROPERTY AND THE TRANSFEREE PROVIDES OTHERWISE.
  4. NOTHING IN THIS SECTION SHALL BE DEEMED TO AFFECT THE RIGHTS  OF  A
TAXING DISTRICT UNDER ARTICLE ELEVEN OF THIS CHAPTER.
  S  977-F. LIEN REPAYMENT AND RELEASE. 1. THE PROPERTY OWNER MAY OBTAIN
A RELEASE OF THE TRANSFERRED LIEN BY PAYING THE  TRANSFEREE  THE  AMOUNT
DUE  UNDER  THE  LIEN  PAYMENT CONTRACT AT ANY TIME AFTER THE TRANSFEREE
FILES A LIS PENDENS IN CONNECTION WITH A FORECLOSURE PROCEEDING  OF  THE
SUBJECT PROPERTY.
  2.  A  PRIOR RECORDED FIRST LIEN MORTGAGEE MAY OBTAIN A RELEASE OF THE
TRANSFERRED LIEN BY PAYING THE TRANSFEREE THE AMOUNT DUE UNDER THE  LIEN
PAYMENT CONTRACT:
  (A) AT ANY TIME AFTER THE TRANSFEREE FILES A LIS PENDENS IN CONNECTION
WITH A FORECLOSURE PROCEEDING OF THE SUBJECT PROPERTY;
  (B)  UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT STATING THAT THE PROP-
ERTY OWNER IS NINETY DAYS OR MORE  DELINQUENT  IN  THE  PAYMENT  OF  THE
OWNER'S FIRST LIEN MORTGAGE;
  (C) UPON PROVIDING THE TRANSFEREE AN AFFIDAVIT FROM THE PROPERTY OWNER
AUTHORIZING THE PAYMENT AND RELEASE; OR
  (D) AT THE TRANSFEREE'S DISCRETION.
  3. WITHIN THIRTY DAYS OF SATISFACTION OF THE LIEN PAYMENT CONTRACT THE
TRANSFEREE  SHALL  RELEASE  THE LIEN TRANSFER CERTIFICATE AND RECORD THE
RELEASE IN ANY COUNTY CLERK'S OFFICE WHERE THE PROPERTY IS SITUATED  AND
THE TRANSFEREE SHALL PAY ANY FEE FOR SAID RECORDING.
  S  977-G.  COLLECTION  OF  LIEN  INFORMATION.  1. TWICE ANNUALLY, EACH
TAXING DISTRICT SHALL PROVIDE TO THE COMMISSIONER A REPORT,  IN  SPREAD-
SHEET  OR  COMMA  DELIMITED  ELECTRONIC  FORMAT,  OF  ALL  REAL PROPERTY
ACCOUNTS IN SAID TAXING DISTRICT THAT HAVE UNPAID  PROPERTY  TAXES.  THE
REPORTS  SHALL  BE DUE ON OR AROUND JANUARY FIRST AND OCTOBER FIRST. THE
JANUARY REPORT SHALL CONTAIN A LISTING OF ALL  TAX  ACCOUNTS  THAT  SHOW
REAL  PROPERTY  TAXES DUE. THE OCTOBER REPORT SHALL CONTAIN A LISTING OF
ALL TAX ACCOUNTS THAT SHOW REAL  PROPERTY  TAXES  DELINQUENT.  FOR  EACH
ACCOUNT,  SAID  LISTINGS SHALL INCLUDE THE DATA FROM THE TAX ROLL OF THE
TAXING DISTRICT, INCLUDING BUT NOT LIMITED TO THE PROPERTY OWNER'S  NAME
AND  ADDRESS,  THE PROPERTY ADDRESS, THE PROPERTY PARCEL IDENTIFIER, THE

S. 6817--C                          7

PROPERTY TYPE CLASSIFICATION CODE (FOR EXAMPLE,  AGRICULTURAL,  RESIDEN-
TIAL, COMMERCIAL OR VACANT LAND), THE ASSESSED VALUE OF THE REAL PROPER-
TY AND THE IMPROVEMENTS THEREON, THE EXEMPTIONS, IF ANY, ON THE PROPERTY
AND THE YEAR(S) AND AMOUNT DUE OR DELINQUENT.
  2.  THE  SUPERINTENDENT  OF  FINANCIAL  SERVICES SHALL CONSOLIDATE THE
REPORTS FROM ALL  TAXING  DISTRICTS.  THE  SUPERINTENDENT  OF  FINANCIAL
SERVICES SHALL MAKE THE CONSOLIDATED REPORT AVAILABLE TO ANY PERSON UPON
REQUEST,  IN  SPREADSHEET  OR  COMMA  DELIMITED  ELECTRONIC FORMAT, AT A
REASONABLE PRICE NOT TO EXCEED FIVE HUNDRED DOLLARS.
  3. THE SUPERINTENDENT OF FINANCIAL SERVICES SHALL PROMULGATE RULES  TO
IMPLEMENT THIS SECTION.
  S  5.  This  act shall take effect on the ninetieth day after it shall
have become a law.

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