STATE OF NEW YORK ________________________________________________________________________ 4935--A 2023-2024 Regular Sessions IN ASSEMBLY February 27, 2023 ___________ Introduced by M. of A. WEINSTEIN, WALLACE, WILLIAMS -- read once and referred to the Committee on Real Property Taxation -- recommitted to the Committee on Real Property Taxation in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the real property tax law, in relation to tax lien fore- closure The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subdivision 1 of section 924-a of the real property tax 2 law, as amended by chapter 26 of the laws of 2003, is amended to read as 3 follows: 4 1. The amount of interest to be added on all taxes received after the 5 interest free period and all delinquent taxes shall be [one-twelfth the 6 rate of interest as determined pursuant to subdivision two or two-a of 7 this section rounded to the nearest one-hundredth of a percentage point] 8 sixteen percent per annum, or such other amount as prescribed by section 9 fourteen-a of the banking law, except as otherwise provided by a general 10 or special law, or a local law adopted by a city pursuant to the munici- 11 pal home rule law or any special law. Such interest shall be added for 12 each month or fraction thereof until such taxes are paid. 13 § 2. The real property tax law is amended by adding a new section 1185 14 to read as follows: 15 § 1185. Homeowner bill of rights. Any owner of a residential property, 16 as defined in section eleven hundred eleven of this article, who occu- 17 pies such property as their primary residence (or whose heirs or distri- 18 butees occupy the property as their primary residence where the homeown- 19 er is deceased) or any purchaser of a contract for a residential 20 property (or successor in interest to such purchaser) subject to a tax 21 lien on any parcel of real property, including those liens otherwise 22 exempt under this article, shall have the following rights: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04452-03-4
A. 4935--A 2 1 (a) to have any foreclosure on any real property tax lien pursuant to 2 section nine hundred two of this chapter be a judicial proceeding 3 specific to each parcel; 4 (b) where the property is the primary residence of an owner entitled 5 to tax exemption based on age, disability, or veteran status, a foreclo- 6 sure may not be maintained; 7 (c) to not have exemptions removed or waived for nonpayment of proper- 8 ty taxes; 9 (d) to be informed of the amount of tax due, the number of tax years 10 for which the parcel has been in arrears, the date on which the redemp- 11 tion period ends, the accepted forms of payment, the location where 12 payments shall be made, and the contact information for the responsible 13 taxing authority, including but not limited to, the taxpayer advocate or 14 other similar office within the taxing authority working with homeowners 15 to resolve tax arrears; 16 (e) to receive pre-foreclosure notices, which shall be conditions 17 precedent to maintenance of a foreclosure on any tax lien governed by 18 the service requirements of section thirteen hundred four of the real 19 property actions and proceedings law; 20 (f) to participate in a mandatory settlement conference process equiv- 21 alent to the process required in mortgage foreclosure actions pursuant 22 to rule thirty-four hundred eight of the civil practice law and rules, 23 which shall be governed by the same good faith negotiation standard 24 governing that provision, with the goal of: (i) negotiating a mutually 25 agreeable resolution to avert foreclosure, including, but not limited 26 to, establishing an affordable repayment plan, abatement of fees, penal- 27 ties or other charges, forbearance of amounts due, or other home saving 28 resolution; or (ii) whatever other purposes the court deems appropriate. 29 A party prosecuting a tax lien foreclosure shall be prohibited from 30 charging the homeowner for any fees associated with participating in the 31 settlement conference. Explicitly incorporated into this bill of rights 32 are subdivisions (c) through (n) of rule thirty-four hundred eight of 33 the civil practice law and rules, and the office of court administration 34 shall within ninety days of the effective date of this section promul- 35 gate rules implementing this mandatory settlement conference process 36 which shall adapt the foregoing subdivisions to the needs of tax lien 37 foreclosure cases and which shall, without limitation, include a notice 38 of the scheduling of the conference that shall require the parties to 39 appear at the conference with required information for a meaningful 40 conference and with authority to engage in settlement negotiations; 41 (g) to apply any payments toward delinquent taxes in the order in 42 which the liens became due; 43 (h) in the event that a residence is foreclosed upon, to receive any 44 surplus following the sale of the property after the tax lien is satis- 45 fied ahead of unsecured creditors pursuant to section fifty-two hundred 46 six of the civil practice law and rules; and 47 (i) where there is a transfer to a municipality pursuant to section 48 eleven hundred thirty-six of this article or where there is a foreclo- 49 sure auction with no bidders and the municipality takes possession of 50 the property, any subsequent sale of the property must be an arm's 51 length transaction in which the owner has an absolute right to any 52 surplus funds. 53 § 3. The real property tax law is amended by adding a new section 54 1185-a to read as follows:
A. 4935--A 3 1 § 1185-a. Pre-foreclosure notices. (a) The pre-foreclosure notice 2 required in subdivision (e) of section eleven hundred eighty-five of 3 this title shall appear as follows: 4 "YOU MAY BE AT RISK OF FORECLOSURE ON A PROPERTY TAX LIEN 5 PLEASE READ THE FOLLOWING NOTICE CAREFULLY. 6 As of (date), your property taxes have not been paid for the following 7 years and amounts each year: 8 The total needed to pay off all tax arrears as of the date of this 9 notice is: 10 Under New York State law, we are required to send you this notice to 11 inform you that you are at risk of losing your home. 12 Attached to this notice is a list of government approved housing coun- 13 seling agencies in your area which provide free counseling. You can also 14 call the NYS Office of the Attorney General's Homeowner Protection 15 Program (HOPP) toll-free consumer hotline to be connected to free hous- 16 ing counseling or legal services in your area at 1-855-HOME-456 (1-855- 17 466-3456), or visit their website at http://www.aghomehelp.com. A state- 18 wide listing by county is also available at https://www.dfs.ny.gov/ 19 consumer/mortgnysnpcounselingagencies.html. Qualified free help is 20 available; watch out for companies or people who charge a fee for these 21 services. 22 Housing counselors from New York-based agencies listed on the website 23 above are trained to help homeowners who are having problems making 24 their tax payments and can help you find the best option for your situ- 25 ation. If you wish, you may also contact our office directly at 26 __________ or our taxpayer advocate at __________ , who is responsible 27 for working with homeowners to resolve tax arrears, and ask to discuss 28 possible payment plans and other options. 29 PLEASE NOTE THAT IF YOU ARE A SENIOR CITIZEN, PHYSICALLY DISABLED, 30 AND/OR A VETERAN, YOU MAY BE ENTITLED TO A PARTIAL EXEMPTION FROM PROP- 31 ERTY TAXES or to have tax foreclosure delayed. The following exemptions 32 that local rules allow that could prevent foreclosure in your case are: 33 ____ Senior Citizen 34 ____ Veteran 35 ____ Physical Disability 36 We encourage you to contact our taxpayer advocate at the telephone 37 number above if you have any questions about whether you qualify for any 38 of these exemptions. 39 While we cannot assure that a mutually agreeable resolution is possible, 40 we encourage you to take immediate steps to try to achieve a resolution. 41 The longer you wait, the fewer options you may have. 42 If you have not taken any actions to resolve this matter within 90 days 43 from the date this notice was mailed (or sooner if you cease to live in 44 the dwelling as your primary residence), we may commence legal action or 45 other remedies against you to foreclose the tax lien, which may eventu- 46 ally result in eviction from your home. 47 Under New York State law, you may be barred from entering into a payment 48 plan or from being permitted to make any payment to save your home after 49 the "Redemption Date". 50 In your case, the "Redemption Date" is _____. 51 IMPORTANT: You have the right to remain in your home until you receive a 52 court order telling you to leave the property; however, you may lose the 53 right to continue ownership of your home after the Redemption Date. If a 54 foreclosure action is filed against you in court, you still have the 55 right to remain in the home until a court orders you to leave.
A. 4935--A 4 1 This notice is not an eviction notice, and a foreclosure action has not 2 yet been commenced against you." 3 (b) The notice required in subdivision (e) of section eleven hundred 4 eighty-five of this title shall be sent by such taxing authority or 5 purchaser of delinquent tax liens to the homeowner (or heirs or distri- 6 butees if the homeowner is deceased), by registered or certified mail 7 and also by first-class mail to the last known address of the homeowner, 8 and to the residence subject to the tax lien. The notices required by 9 subdivision (e) of section eleven hundred eighty-five of this title 10 shall be sent by the taxing authority or purchaser of delinquent tax 11 liens in a separate envelope from any other mailing or notice. Notice 12 is considered given as of the date it is mailed. The notice required by 13 subdivision (e) of section eleven hundred eighty-five of this title 14 shall contain a current list of at least five housing counseling agen- 15 cies serving the county where the property is located from the most 16 recent listing available from the department of financial services. The 17 list shall include the counseling agencies' last known addresses and 18 telephone numbers. The department of financial services shall make 19 available on its website a listing, by county, of such agencies. The 20 taxing authority or purchaser of delinquent tax liens shall use such 21 lists to meet the requirements of this section. 22 (c) For any homeowner known to have limited English proficiency, the 23 notice required by subdivision (e) of section eleven hundred eighty-five 24 of this title shall be in the homeowner's native language (or a language 25 in which the homeowner is proficient), provided that the language is one 26 of the six most common non-English languages spoken by individuals with 27 limited English proficiency in the state of New York, based on United 28 States census data. The department of financial services shall post the 29 notices required by subdivision (e) of section eleven hundred eighty- 30 five of this title on its website in the six most common non-English 31 languages spoken by individuals with limited English proficiency in the 32 state of New York, based on the United States census data. 33 § 4. Section 1104 of the real property tax law is amended by adding 34 two new subdivisions 3 and 4 to read as follows: 35 3. Notwithstanding the provisions of subdivision two of this section, 36 every county, city and town shall comply with the requirements of 37 sections eleven hundred eighty-five and eleven hundred eighty-five-a of 38 this article. 39 4. Notwithstanding the provisions of subdivision two of this section, 40 every county, city, and town shall comply with the requirements of title 41 six of this article. 42 § 5. Article 11 of the real property tax law is amended by adding a 43 new title 7 to read as follows: 44 TITLE 7 45 ADDITIONAL PROTECTIONS 46 Section 1198. Notice of exemptions. 47 1198-a. Senior citizen delinquent tax deferral program. 48 1198-b. Repayment plan. 49 § 1198. Notice of exemptions. Tax districts shall include a statement 50 on every property tax collection notice notifying homeowners of avail- 51 able exemptions. The provision of this subdivision shall be met by 52 providing a notice or legend sent on or with each tax bill to homeowners 53 reading "IF YOU ARE A SENIOR CITIZEN, PHYSICALLY DISABLED, AND/OR A 54 VETERAN, YOU MAY BE ENTITLED TO A PARTIAL EXEMPTION FROM PROPERTY TAXES 55 OR TO HAVE TAX FORECLOSURE DELAYED", followed by the name and telephone 56 number of a person or department selected by the tax district to respond
A. 4935--A 5 1 to inquiries regarding tax exemptions, eligibility, and instructions on 2 how to apply for such exemptions. 3 § 1198-a. Senior citizen delinquent tax deferral program. 1. A request 4 by an owner to defer delinquent taxes shall be granted by a tax district 5 to an individual with an ownership interest in the property if: 6 (a) the property is a one-, two-, or three-family residential proper- 7 ty; 8 (b) the property serves as the primary residence of the owner; 9 (c) all of the owners are at least seventy years of age or older, or 10 in the case of property owned by husband and wife, one of the owners is 11 at least seventy years of age; 12 (d) the gross income of the homeowner is at or below two hundred 13 percent of the federal poverty level; and 14 (e) the deferral amount plus interest does not exceed eighty percent 15 of the owner's equity in the property. 16 2. All amounts owed by the owner pursuant to this section shall become 17 due immediately upon the occurrence of any of the following events: 18 (a) The owner ceases to own the residence. 19 (b) The residence ceases to be the owner's primary residence. 20 (c) The owner's equity in the residence falls below the required 21 eligible amount pursuant to paragraph (e) of subdivision one of this 22 section. 23 § 1198-b. Repayment plan. 1. A residential owner of property with a 24 tax delinquency exceeding five hundred dollars shall be entitled to 25 enter into a repayment plan to cure a tax delinquency at any time until 26 the date of redemption. 27 2. The term of the repayment plan shall be no less than eighteen 28 months, unless a shorter duration is requested by the owner. The amount 29 due under the agreement shall be paid, as nearly as possible, in equal 30 amounts on each payment due date. The amount of each such payment shall 31 be determined by dividing the amount due by the number of required 32 installment payments. 33 3. No penalties shall be imposed and interest shall not accrue 34 throughout the repayment plan period. 35 4. The owner shall be deemed to be in default of a payment plan agree- 36 ment pursuant to this section upon the occurrence of any of the follow- 37 ing events: 38 (a) Any installment payment is not made within forty-five days from 39 the payment due date. 40 (b) Any current county tax, assessment, fee, or charge is not paid 41 when due. 42 (c) The subject property is sold. 43 5. In the event of a default in payments, and after service of a twen- 44 ty-day notice of default, the tax district shall have the right to 45 require the entire unpaid balance, with interest, to be paid in full. 46 § 6. The real property tax law is amended by adding a new section 47 1194-b to read as follows: 48 § 1194-b. Proceeding for determining just compensation after foreclo- 49 sure of tax lien by proceeding in rem. 1. For the purposes of this 50 section, the following terms shall have the following meanings: 51 (a) "Appraised value" shall mean a retrospective appraisal of the 52 property effective as of the date of the loss of title by the former 53 owners determined by an independent New York state licensed residential 54 real estate appraiser. 55 (b) "Just compensation" shall mean the appraised value of the property 56 less:
A. 4935--A 6 1 (i) all real property taxes, associated interest, and penalties 2 reasonably related to the cost of the delinquency owed to the tax 3 district; 4 (ii) reasonable attorney's fees and costs of the foreclosure proceed- 5 ing; 6 (iii) reasonable appraisal costs; and 7 (iv) referee fees and costs. 8 (c) "Former owner" shall mean a party divested of title due to unpaid 9 real property taxes or that party's successors, heirs, or assigns, or a 10 representative of such successors, heirs, or assigns. 11 2. (a) (i) Not more than five days after a former owner is divested of 12 title, the tax district shall serve upon such former owner, or such 13 former owner's successors, heirs, or assigns, or a representative of 14 such successors, heirs, or assigns, a notice of potential compensation. 15 The tax district may serve anyone whose interest is claimed to be 16 subject and subordinate to the foreclosed taxes with such notice of 17 potential compensation. 18 (ii) Such notice of potential compensation shall be served upon the 19 former owner by regular first class mail and by certified mail, return 20 receipt requested, to the property address and the last known address of 21 the former owner. If no address is provided for a property on the tax 22 rolls, the tax district shall conduct a diligent inquiry for the address 23 for each and every former owner and send the notice to such addresses. 24 (iii) Such notice of potential compensation must be provided in 25 substantially the following form: "NOTICE OF POTENTIAL COMPENSATION. The 26 tax lien foreclosure process for property located at (Property Address) 27 has concluded and you are entitled to determination of just compensation 28 through a court proceeding. You should consult an attorney who can 29 assist you in this process. To be connected with a legal services or 30 housing counseling organization near you, call 855-HOME-456 or visit 31 homeownerhelpny.org." 32 (b) (i) Within sixty days of the loss of title resulting from a tax 33 foreclosure, the tax district shall determine the appraised value of the 34 property. Within ninety days of the loss of title resulting from a tax 35 foreclosure, the tax district shall file with the office of the clerk 36 where the property is located a notice of just compensation. Such notice 37 shall be served personally upon the former owner and served by regular 38 mail upon attorneys appearing on behalf of such former owners. 39 (ii) Such notice of just compensation shall include: 40 (A) an offer of just compensation; 41 (B) an itemization of deductions from the appraised value; and 42 (C) a copy of the written appraisal obtained by the tax district. 43 (c) (i) Within sixty days of the mailing by the tax district of the 44 offer of just compensation, the former owner shall complete and serve 45 upon the tax district a response to notice of just compensation. 46 (ii) Such response to notice of just compensation shall include an 47 election by the former owner to either accept the tax district's offer 48 or reject the offer and contest the appraised value. 49 3. (a) (i) Upon receipt of a response to notice of just compensation 50 accepting the offer of just compensation, the former owner shall enter 51 into a written agreement with the tax district accepting such offer. 52 (ii) Upon receipt of a response to notice of just compensation reject- 53 ing the offer of just compensation, the tax district shall enter into 54 negotiations to reach a consensual agreement with the former owner. At 55 all times, the tax district shall make every reasonable and expeditious
A. 4935--A 7 1 effort to justly compensate the former owner for such real property by 2 good faith negotiation and agreement. 3 (b) (i) If the former owner is dissatisfied with the result of the 4 negotiations required pursuant to subparagraph (ii) of paragraph (a) of 5 this subdivision, the former owner may submit to a court of competent 6 jurisdiction a request for hearing to determine just compensation. 7 (ii) Within fourteen days of receipt of a request for hearing to 8 determine just compensation, the court shall by reference or otherwise: 9 (A) direct the parties to exchange and file appraisal reports by a 10 date certain before the hearing, to be completed at least twenty days 11 before such hearing; and 12 (B) fix the place and time for such hearing to determine the just 13 compensation. 14 (c) The former owner shall have a period of up to three years from the 15 loss of title to either (i) accept the tax district's offer; or (ii) 16 request a hearing to ascertain just compensation. In the event of any 17 conflict, the three-year period specified in this paragraph shall 18 control. Following such three-year period, funds held by the tax 19 district after the payment of real property taxes, associated interest, 20 and penalties reasonably related to the cost of the delinquency owed to 21 the tax district shall be transferred to the New York state comp- 22 troller's office of unclaimed funds. 23 4. All tax districts shall review and amend existing legislation as 24 necessary to establish procedures to carry out the provisions of this 25 section. 26 § 7. This act shall take effect immediately.