S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9326
 
                           I N  A S S E M B L Y
 
                             February 29, 2024
                                ___________
 
 Introduced by M. of A. ZINERMAN -- read once and referred to the Commit-
   tee on Real Property Taxation
 
 AN ACT to amend the real property tax law, in relation to procedures for
   the foreclosure of tax lien proceedings
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Section 1166 of the real property tax law,  as  amended  by
 chapter  532 of the laws of 1994 and subdivision 1 as amended by chapter
 500 of the laws of 2015, is amended to read as follows:
   § 1166. Real property acquired by tax district; right  of  sale.    1.
 Whenever  any  tax  district  shall become vested with the title to real
 property by virtue of a foreclosure proceeding brought pursuant  to  the
 provisions  of  this  article, such tax district is hereby authorized to
 sell and convey the real property so acquired AT PUBLIC AUCTION  TO  THE
 HIGHEST  BIDDER,  which  shall  include  any and all gas, oil or mineral
 rights associated with such  real  property,  [either  with  or  without
 advertising  for  bids,]  notwithstanding the provisions of any general,
 special or local law.
   2. [No such sale shall be effective unless and until such  sale  shall
 have  been  approved  and  confirmed by a majority vote of the governing
 body of the tax district, except that no such approval shall be required
 when the property is sold at public auction to the highest bidder.]  (A)
 NOTICE  OF SUCH SALE SHALL BE GIVEN BY THE OFFICER MAKING IT BY PUBLISH-
 ING A NOTICE OF THE TIME AND PLACE OF THE SALE, CONTAINING A DESCRIPTION
 OF THE PROPERTY TO BE SOLD, IN A NEWSPAPER PUBLISHED IN  THE  COUNTY  IN
 WHICH  THE  PROPERTY  IS  LOCATED,  OR, IF THERE IS NONE, IN A NEWSPAPER
 PUBLISHED IN AN ADJOINING COUNTY, UNLESS THE PROPERTY IS SITUATED WHOLLY
 OR PARTLY IN A CITY, OR IN AN INCORPORATED VILLAGE  IN  WHICH  A  DAILY,
 SEMI-WEEKLY  OR TRI-WEEKLY NEWSPAPER IS PUBLISHED, AND, IN THAT CASE, BY
 PUBLISHING NOTICE OF THE SALE IN SUCH A DAILY, SEMI-WEEKLY OR TRI-WEEKLY
 PAPER, EXCEPT THAT WHERE SUCH REAL PROPERTY IS LOCATED IN A COUNTY WITH-
 IN THE CITY OF NEW YORK SUCH PUBLICATION SHALL BE IN A  DAILY  NEWSPAPER
 PUBLISHED  WITHIN  SUCH COUNTY, OR IN A WEEKLY PAPER PUBLISHED IN A CITY
 OR IN SUCH INCORPORATED VILLAGE. IF THE PROPERTY BE SITUATED IN A  CITY,
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11294-01-3
 A. 9326                             2

 OR  A  VILLAGE  IN WHICH NO NEWSPAPER IS PUBLISHED DAILY, SEMI-WEEKLY OR
 TRI-WEEKLY, AND THERE BE AN ADJOINING CITY OR VILLAGE  IN  THE  SAME  OR
 ANOTHER  COUNTY, IN WHICH A NEWSPAPER IS PUBLISHED DAILY, SEMI-WEEKLY OR
 TRI-WEEKLY,  SUCH  NOTICE MAY BE PUBLISHED IN SUCH DAILY, SEMI-WEEKLY OR
 TRI-WEEKLY NEWSPAPER OF THE LATTER CITY OR VILLAGE OR IN A WEEKLY  NEWS-
 PAPER OF SUCH CITY. IN EACH CASE, PUBLICATION MAY BE EITHER ONCE IN EACH
 WEEK  FOR FOUR SUCCESSIVE WEEKS OR AT LEAST TWICE IN EACH WEEK FOR THREE
 SUCCESSIVE WEEKS PRECEDING THE ORIGINAL DATE FIXED FOR THE SALE. IF  THE
 PUBLICATION IS FOR THREE WEEKS, SUCH SALE SHALL TAKE PLACE ON ANY DAY ON
 OR  AFTER  THE  TWENTY-FIRST  DAY AND ON OR BEFORE THE TWENTY-EIGHTH DAY
 AFTER THE DAY OF THE FIRST PUBLICATION; AND IF THE  PUBLICATION  IS  FOR
 FOUR  WEEKS  SUCH SALE SHALL TAKE PLACE ON ANY DAY ON OR AFTER THE TWEN-
 TY-EIGHTH DAY AND ON OR BEFORE THE THIRTY-FIFTH DAY AFTER THE DAY OF THE
 FIRST PUBLICATION. ANY PERIOD OF SEVEN SUCCESSIVE DAYS SHALL  CONSTITUTE
 A WEEK UNDER THIS SECTION.
   (B)  WHERE THE PROPERTY IS SITUATED WHOLLY OUTSIDE A CITY OR AN INCOR-
 PORATED VILLAGE REFERRED TO IN PARAGRAPH (A) OF THIS SUBDIVISION, NOTICE
 OF SUCH SALE SHALL ALSO BE GIVEN BY POSTING A COPY OF THE NOTICE OF SALE
 AT LEAST TWENTY-EIGHT DAYS PRECEDING THE ORIGINAL  DATE  FIXED  FOR  THE
 SALE  IN  THREE  PUBLIC  PLACES  IN  THE  TOWN  IN WHICH THE PROPERTY IS
 LOCATED, AND, IF THE SALE IS TO BE HELD IN ANOTHER TOWN OR IN A CITY, IN
 THREE PUBLIC PLACES THEREIN.
   (C) IF THE OFFICER APPOINTED TO MAKE SUCH SALE DOES NOT APPEAR AT  THE
 TIME  AND  PLACE  WHERE SUCH SALE HAS BEEN ADVERTISED TO TAKE PLACE, THE
 ATTORNEY FOR THE PLAINTIFF MAY POSTPONE OR  ADJOURN  SUCH  SALE  NOT  TO
 EXCEED  FOUR WEEKS, DURING WHICH TIME SUCH ATTORNEY MAY MAKE APPLICATION
 TO THE COURT TO HAVE ANOTHER PERSON APPOINTED TO MAKE SUCH SALE.  NOTICE
 OF POSTPONEMENT OF THE SALE SHALL BE POSTED AT LEAST THREE DAYS PRIOR TO
 THE  POSTPONED  DATE  IN  THE SAME PLACES AS THE ORIGINAL NOTICE OF SALE
 WHEN POSTING OF THE NOTICE OF SALE IS REQUIRED, AND SHALL  BE  PUBLISHED
 ONCE AT LEAST THREE DAYS PRIOR TO THE POSTPONED DATE IN THE NEWSPAPER IN
 WHICH THE NOTICE OF SALE WAS ORIGINALLY PUBLISHED.
   (D) THE TERMS OF THE SALE SHALL BE MADE KNOWN AT THE SALE.
   (E)  IF THE PROPERTY CONSISTS OF TWO OR MORE DISTINCT BUILDINGS, FARMS
 OR LOTS, THEY SHALL BE SOLD SEPARATELY, UNLESS OTHERWISE ORDERED BY  THE
 COURT;  BUT  WHERE  TWO  OR MORE BUILDINGS ARE SITUATED IN THE SAME CITY
 LOT, THEY SHALL BE SOLD TOGETHER.
   (F) AT ANY TIME WITHIN ONE YEAR AFTER THE SALE,  BUT  NOT  THEREAFTER,
 THE  COURT,  UPON  SUCH TERMS AS MAY BE JUST, MAY SET THE SALE ASIDE FOR
 FAILURE TO COMPLY WITH THE PROVISIONS OF THIS SECTION AS TO THE  NOTICE,
 TIME OR MANNER OF SUCH SALE IF A SUBSTANTIAL RIGHT OF A PARTY WAS PREJU-
 DICED BY THE DEFECT.
   3. AFTER THE SALE PURSUANT TO THIS SECTION, ALL SURPLUS MONEYS ARISING
 FROM  THE  SALE  SHALL  BE PAID INTO COURT BY THE OFFICER CONDUCTING THE
 SALE WITHIN FIVE DAYS AFTER THE SAME SHALL BE RECEIVED.
   4. (A) WITHIN THIRTY DAYS AFTER COMPLETING THE SALE AND EXECUTING  THE
 PROPER  CONVEYANCE TO THE PURCHASER, UNLESS SUCH TIME BE EXTENDED BY THE
 COURT WITHIN SAID THIRTY DAYS, THE OFFICER MAKING THE  SALE  SHALL  FILE
 WITH  THE  CLERK  HIS OR HER REPORT UNDER OATH OF THE DISPOSITION OF THE
 PROCEEDS OF THE SALE, ACCOMPANIED BY THE VOUCHERS OF THE PERSONS TO WHOM
 PAYMENTS WERE MADE.
   (B)  A MOTION TO CONFIRM SUCH REPORT OF SALE SHALL NOT BE MADE  WITHIN
 THREE  MONTHS  AFTER  THE FILING OF THE REPORT AND SHALL IN ANY EVENT BE
 MADE NOT LATER THAN FOUR MONTHS AFTER THE FILING OF SUCH REPORT,  EXCEPT
 THAT  IF  THERE  BE NO SURPLUS MONEYS ARISING FROM THE SALE OF THE MORT-
 GAGED PREMISES UNDER SUCH JUDGMENT, AN APPLICATION FOR  CONFIRMATION  OF
 A. 9326                             3
 
 THE  REPORT  OF SALE MAY BE MADE AT ANY TIME AFTER THE REPORT SHALL HAVE
 BEEN FILED EIGHT DAYS. WHERE THE REPORT OF  SALE  SHOWS  SURPLUS  MONEY,
 SUCH  REPORT MUST INCLUDE THE AMOUNT OF SURPLUS AND INSTRUCTIONS FOR HOW
 INTERESTED  PARTIES  MAY  APPLY  TO  CLAIM  AN INTEREST FOR SUCH SURPLUS
 PURSUANT TO SUBDIVISION FIVE OF THIS SECTION.
   (C) SUCH REPORT REQUIRED PURSUANT TO THIS SUBDIVISION SHALL BE  POSTED
 PUBLICLY  IN  ACCORDANCE  WITH  THE PROVISIONS OF SECTION ELEVEN HUNDRED
 TWENTY-FOUR OF THIS ARTICLE.
   (D) PERSONAL NOTICE OF THE SALE OF PROPERTY PURSUANT TO  THIS  SECTION
 SHALL BE ADMINISTERED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ELEV-
 EN HUNDRED TWENTY-FIVE OF THIS ARTICLE.
   5. (A) ANY PERSON CLAIMING THE SURPLUS MONEYS ARISING UPON THE SALE OF
 PREMISES PURSUANT TO THIS SECTION, OR ANY PART THEREOF, EITHER IN HIS OR
 HER  OWN NAME, OR BY HIS OR HER ATTORNEY, AT ANY TIME BEFORE THE CONFIR-
 MATION OF THE REPORT OF SALE, MAY FILE WITH THE CLERK  IN  WHOSE  OFFICE
 THE REPORT OF SALE IS FILED, A WRITTEN NOTICE OF SUCH CLAIM, STATING THE
 NATURE  AND  EXTENT  OF  HIS  OR HER CLAIM AND THE ADDRESS OF HIMSELF OR
 HERSELF OR HIS OR HER ATTORNEY.
   (B) ON THE MOTION FOR CONFIRMATION, OR AT ANY TIME WITHIN THREE MONTHS
 THEREAFTER, ON NOTICE TO ALL PARTIES WHO HAVE APPEARED IN THE ACTION  OR
 FILED  CLAIMS,  ON  MOTION OF ANY PARTY TO THE ACTION, OR ANY PERSON WHO
 HAS FILED A NOTICE OF CLAIM ON THE SURPLUS MONEYS, THE COURT, BY  REFER-
 ENCE  OR  OTHERWISE, SHALL ASCERTAIN AND REPORT THE AMOUNT DUE TO HIM OR
 ANY OTHER PERSON WHO HAS A LIEN ON SUCH SURPLUS MONEYS, AND THE PRIORITY
 OF THE SEVERAL LIENS THEREON AND ORDER DISTRIBUTION OF SURPLUS MONEYS.
   (C) THE OWNER OF THE EQUITY  OF  REDEMPTION,  OR  ANY  PARTY  WHO  HAS
 APPEARED  IN THE ACTION OR ANY PERSON WHO FILES A NOTICE OF CLAIM OR WHO
 HAS A RECORDED LIEN AGAINST THE PROPERTY SHALL BE GIVEN NOTICE  BY  MAIL
 OR IN SUCH OTHER MANNER AS THE COURT SHALL DIRECT, TO ATTEND ANY HEARING
 ON DISPOSITION OF SURPLUS MONEY.
   6.  WHENEVER  ANY  TAX  DISTRICT SHALL BECOME VESTED WITH THE TITLE TO
 REAL PROPERTY BY VIRTUE OF A FORECLOSURE PROCEEDING BROUGHT PURSUANT  TO
 THE  PROVISIONS  OF THIS ARTICLE, SUCH TAX DISTRICT IS HEREBY AUTHORIZED
 TO KEEP THE REAL PROPERTY SO ACQUIRED FOR SUCH TAX  DISTRICT'S  USE.  IN
 SUCH  CASE, A VALUATION PROCEEDING SHALL BE COMMENCED IN ACCORDANCE WITH
 ARTICLE FIVE OF THE EMINENT DOMAIN PROCEDURE LAW. ONCE  A  DETERMINATION
 OF THE PROPERTY'S FAIR MARKET VALUE HAS BEEN MADE, THE COURT SHALL ORDER
 THE  TAX  DISTRICT  TO  PAY JUST COMPENSATION TO THE OWNERS OF THE FORE-
 CLOSED PROPERTY, REPRESENTING  THE  DIFFERENCE  BETWEEN  THE  PROPERTY'S
 VALUE AND THE TOTAL TAX DEBT OWED.
   §  2. Paragraph (d) of subdivision 2 and subdivision 3 of section 1136
 of the real property tax law, as amended by chapter 532 of the  laws  of
 1994, are amended to read as follows:
   (d)  In  directing  any  conveyance  pursuant to this subdivision, the
 judgment shall direct the enforcing  officer  of  the  tax  district  to
 prepare  and  execute a deed conveying title to the parcel or parcels of
 real property concerned. Such title shall be full and  complete  in  the
 absence of an agreement between tax districts as herein provided that it
 shall be subject to the tax liens of one or more tax districts. Upon the
 execution  of such deed, the grantee shall be seized of an estate in fee
 simple absolute in such parcel unless the conveyance is  expressly  made
 subject  to  tax  liens  of  a tax district as herein provided[, and all
 persons, including the state, infants, incompetents, absentees and  non-
 residents,  who  may have had any right, title, interest, claim, lien or
 equity of redemption in or upon such parcel, shall be barred and forever
 A. 9326                             4

 foreclosed of all such right, title, interest, claim, lien or equity  of
 redemption].
   3.  When  no  answer has been interposed. The court shall make a final
 judgment awarding to such tax district the possession of any  parcel  of
 real  property  described in the petition of foreclosure not redeemed as
 provided in this title and as  to  which  no  answer  is  interposed  as
 provided  herein.  In  addition  thereto  such  judgment shall contain a
 direction to the enforcing officer  of  the  tax  district  to  prepare,
 execute  and  cause to be recorded a deed conveying to such tax district
 full and complete title to such parcel. Upon the execution of such deed,
 the tax district shall be seized of an estate in fee simple absolute  in
 such  parcel  [and  all  persons, including the state, infants, incompe-
 tents, absentees and non-residents who may have had  any  right,  title,
 interest,  claim,  lien  or  equity of redemption in or upon such parcel
 shall be barred and forever foreclosed of all such right, title,  inter-
 est, claim, lien or equity of redemption].
   §  3.  Subdivision 10 of section 1194 of the real property tax law, as
 amended by chapter 149 of the laws  of  2003,  is  amended  to  read  as
 follows:
   10.  The  conveyance made pursuant to a judgment in any action brought
 under this title shall vest in the purchaser [all] A PROPORTION  OF  THE
 right,  title,  interest,  claim,  lien  and equity of redemption in and
 against the real property sold of all parties to the action, and of  all
 persons  whose  right, title, interest, claim, lien or equity of redemp-
 tion has accrued subsequent in time to the filing of the notice  of  the
 pendency of the action by assignment of an interest existing prior ther-
 eto  from one of the parties to the action or any or either of them. All
 such parties and persons shall [be barred and forever foreclosed by  the
 judgment  in such action of all] RETAIN A right, title, interest, claim,
 lien and equity of redemption in and to the real property  sold  or  any
 part  thereof IN PROPORTION TO THE SURPLUS EQUITY REMAINING IN THE PROP-
 ERTY AFTER SALE, except that the conveyance  shall  be  subject  to  all
 taxes  or  other legal charges of all tax districts which accrued subse-
 quent to the taxes or other legal charges which were the subject of  the
 action.  [Notwithstanding the provisions of subdivision two of] PROCEEDS
 OF THE SALE SHALL BE DISTRIBUTED IN  ACCORDANCE  WITH  section  thirteen
 hundred  fifty-four  of  the real property actions and proceedings law[,
 this subdivision shall prevail].
   § 4. Subdivision 1 and paragraph (a) of subdivision 2 of section  1112
 of  the  real property tax law, as amended by chapter 532 of the laws of
 1994, are amended to read as follows:
   1.  When a tax district holds more than one tax lien against a parcel,
 the liens need not be redeemed simultaneously. However, the liens [must]
 SHALL be redeemed in [reverse] chronological order,  so  that  the  lien
 with  the  [most  recent]  EARLIEST lien date is redeemed first, and the
 lien with the  [earliest]  MOST  RECENT  lien  date  is  redeemed  last.
 Notwithstanding  the  redemption  of  one or more of the liens against a
 parcel as provided herein, the enforcement process shall proceed accord-
 ing to the provisions of this article as long  as  the  [earliest]  MOST
 RECENT lien remains unredeemed.
   (a)  When  one or more liens against a parcel are redeemed as provided
 herein, but the [earliest] MOST  RECENT  lien  remains  unredeemed,  the
 receipt  issued  to  the  person  redeeming shall include a statement in
 substantially the following form:  "This parcel remains subject  to  one
 or  more  delinquent tax liens. The payment you have made will not post-
 A. 9326                             5
 
 pone the enforcement of the outstanding lien or liens. Continued failure
 to pay the entire amount owed will result in the loss of the property."
   §  5. Paragraph (b) of subdivision 1 of section 1125 of the real prop-
 erty tax law, as added by chapter 415 of the laws of 2006  and  subpara-
 graph  (i)  as amended by chapter 275 of the laws of 2009, is amended to
 read as follows:
   (b) Notification method. (i) IN THE CASE OF AN  OWNER,  THE  ENFORCING
 OFFICER SHALL CAUSE A COPY OF SUCH NOTICE TO BE POSTED AS PROVIDED HERE-
 IN ON THE PROPERTY TO WHICH THE DELINQUENT TAX LIEN RELATES; IN THE CASE
 OF  A NON-OWNER, THE ENFORCING OFFICER SHALL CAUSE A COPY OF SUCH NOTICE
 TO BE POSTED IN HIS OR HER OFFICE AND IN THE OFFICE OF THE CLERK OF  THE
 COURT IN WHICH THE PETITION OF FORECLOSURE HAS BEEN FILED. NOTWITHSTAND-
 ING  ANY PROVISION OF LAW TO THE CONTRARY, THE PARTY TO WHOM SUCH NOTICE
 IS DIRECTED MAY REDEEM THE PARCEL IN QUESTION OR SERVE A  DULY  VERIFIED
 ANSWER  TO  THE  PETITION  OF FORECLOSURE UNTIL EITHER THE THIRTIETH DAY
 AFTER SUCH POSTING OR DELIVERY, OR THE DATE SPECIFIED BY THE  NOTICE  OF
 FORECLOSURE AS THE LAST DAY FOR REDEMPTION, WHICHEVER IS LATER.
   (II)  Such notice shall ALSO be sent to each such party both by certi-
 fied mail and ordinary first class mail, subject to  the  provisions  of
 subparagraph (iv) of this paragraph. The notice shall be deemed received
 unless  both  the certified mailing and the ordinary first class mailing
 are returned by the United States postal service within forty-five  days
 after  being  mailed. In that event, the enforcing officer or his or her
 agent shall attempt to obtain an alternative mailing  address  from  the
 United  States postal service. When notice is required to be sent to the
 commissioner of taxation and finance, an alternative notice may be  used
 by  the enforcing officer, in accordance with instructions prescribed by
 the commissioner of taxation and finance.
   [(ii)] (III) If an alternative mailing address is found, the enforcing
 officer shall cause the notice to  be  mailed  to  such  owner  at  such
 address  both  by  certified  mail  and  by  ordinary  first class mail.
 Notwithstanding any provision of law to the  contrary,  such  owner  may
 redeem  the  parcel  in  question or serve a duly verified answer to the
 petition of foreclosure until either the thirtieth day after such  mail-
 ing,  or the date specified by the notice of foreclosure as the last day
 for redemption, whichever is later.
   [(iii) If no alternative mailing address can be  found,  then  in  the
 case  of  an  owner,  the  enforcing  officer shall cause a copy of such
 notice to be posted as provided herein on  the  property  to  which  the
 delinquent  tax  lien relates; in the case of a non-owner, the enforcing
 officer shall cause a copy of such notice to be posted  in  his  or  her
 office and in the office of the clerk of the court in which the petition
 of  foreclosure  has been filed. Notwithstanding any provision of law to
 the contrary, the party to whom such notice is directed may  redeem  the
 parcel  in  question  or serve a duly verified answer to the petition of
 foreclosure until either the thirtieth day after such posting or  deliv-
 ery,  or the date specified by the notice of foreclosure as the last day
 for redemption, whichever is later.]
   (iv) Where an owner is listed as "unknown" on the  tax  roll  and  the
 name  of  such  owner  cannot  be found in the public record, the notice
 shall be mailed to the property address by  ordinary  first  class  mail
 addressed  to "occupant" and a copy thereof shall be posted on the prop-
 erty to which the tax lien relates.
   § 6. Subdivision 3 of section 1180 of the real property  tax  law,  as
 amended  by  chapter  579  of  the  laws  of 1995, is amended to read as
 follows:
 A. 9326                             6
 
   3. If such lands are not redeemed, every person despoiling such  lands
 or  interested  in  making  such  despoliation  upon whom service of the
 notice has been made, shall be liable to pay to  the  tax  district  the
 [full]  DIFFERENTIAL  value  [of]  BETWEEN  THAT  TOTAL TAX DEBT AND THE
 MARKET  VALUE OF THE PROPERTY AT THE TIME OF FORECLOSURE ATTRIBUTABLE TO
 any buildings, timber or other products  cut  or  destroyed  or  removed
 therefrom,  from  the date of the filing of the list of delinquent taxes
 to the termination of such action or proceeding, and may  be  restrained
 by  injunction from committing any waste thereon. WHERE THE VALUE OF THE
 PROPERTY AT THE TIME OF FORECLOSURE EXCEEDS THE AMOUNT OF THE TOTAL  TAX
 DEBT,  THERE  SHALL  BE  NO LIABILITY FOR DESPOLIATION. THE VALUE OF THE
 PROPERTY AT THE TIME OF FORECLOSURE MAY BE MEASURED BY EITHER THE AMOUNT
 GENERATED BY SALE OF THE PROPERTY AT PUBLIC AUCTION, IN ACCORDANCE  WITH
 SECTION  ELEVEN  HUNDRED  SIXTY-SIX  OF  THIS  TITLE,  OR  BY  VALUATION
 PROCEEDINGS IN ACCORDANCE WITH ARTICLE FIVE OF THE EMINENT DOMAIN PROCE-
 DURE LAW.
   § 7. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law. Effective immediately, the addition, amendment and/or
 repeal  of  any  rule  or regulation necessary for the implementation of
 this act on its effective date are authorized to be made  and  completed
 on or before such effective date.