Bill Text: NY A06116 | 2019-2020 | General Assembly | Introduced


Bill Title: Authorizes localities to convey distressed residential real property that has been foreclosed upon for non-payment of real estate taxes to a third party; establishes that third party may be an individual or for-profit or not-for-profit entity which would rehabilitate and manage such property, providing needed housing while restoring the property to the non-delinquent tax rolls; called "third party transfer program".

Spectrum: Partisan Bill (Republican 14-0)

Status: (Introduced) 2019-02-28 - referred to real property taxation [A06116 Detail]

Download: New_York-2019-A06116-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          6116
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                    February 28, 2019
                                       ___________
        Introduced  by M. of A. FITZPATRICK, TAGUE, BYRNES, BLANKENBUSH, GIGLIO,
          SALKA -- Multi-Sponsored by -- M. of A.  BARCLAY,  CROUCH,  DeSTEFANO,
          HAWLEY,  KOLB, MANKTELOW, McDONOUGH, RAIA -- read once and referred to
          the Committee on Real Property Taxation
        AN ACT to amend the real property  tax  law,  in  relation  to  enacting
          provisions related to distressed property
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Article 11 of the real  property  tax  law  is  amended  by
     2  adding a new title 3-A to read as follows:
     3                                  TITLE 3-A
     4                             DISTRESSED PROPERTY
     5  Section 1141. Definitions.
     6          1142. Procedures for distressed property.
     7    §  1141. Definitions. When used in this article:  1. "Distressed prop-
     8  erty" means any parcel of residential real property that is subject to a
     9  tax lien or liens with a lien or liens to value ratio, as determined  by
    10  the enforcing officer, equal to or greater than fifteen percent and that
    11  meets one of the following two criteria:
    12    (a) such parcel has an average of five or more violations of record of
    13  the  housing  maintenance code per dwelling unit which constitute a fire
    14  hazard or a serious threat to the life, health or  safety  of  occupants
    15  thereof; and
    16    (b)  such  parcel  is  subject  to  a  lien  or liens for any expenses
    17  incurred by the department of housing for the repair or the  elimination
    18  of  any  fire  hazard or serious threat to the life, health or safety of
    19  occupants thereof or any dangerous or unlawful conditions, in an  amount
    20  equal to or greater than one thousand dollars.
    21    2.  "Housing  maintenance  code"  means the provisions of the multiple
    22  residence law or the multiple dwelling law, whichever is  applicable  to
    23  the  tax district in which the distressed property is situate, the state
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06012-01-9

        A. 6116                             2
     1  building conservation and fire prevention code or any local  law,  ordi-
     2  nance,  resolution  or  regulation  made or adopted by such tax district
     3  relating to the construction, alteration, use, maintenance or  occupancy
     4  of such property.
     5    3.  "Department  of housing" means any officer, board, bureau, commis-
     6  sion, department or other agency of  the  tax  district,  or  any  other
     7  public authority designated by the governing body of the tax district in
     8  which  such property is situate to carry out the functions vested in the
     9  department of housing under this article or delegated to the  department
    10  by  the governing body in order to carry out the purposes and provisions
    11  of this article.
    12    4. "Head of the department of housing" means the  person  who  is  the
    13  chief executive officer of the department of housing.
    14    5.  "Residential  real  property" means any premises that is or may be
    15  used in whole or in part as a personal residence, and  shall  include  a
    16  one, two, or three family house, an individual condominium unit, a coop-
    17  erative apartment unit, or a farm dwelling.
    18    6.  "Governing  body"  means:  (a) in a county, the county legislative
    19  body; (b) in a city, the board of aldermen, common  council,  commission
    20  or  other  body  vested by its charter or other law with jurisdiction to
    21  enact ordinances or local laws, except that in a  city  having  a  popu-
    22  lation of one million or more, if there be a board of estimate, the term
    23  "governing  body"  shall mean such board of estimate; (c) in a town, the
    24  town board; and (d) in a village, the board of trustees.
    25    § 1142.  Procedures for distressed property. 1. The enforcing  officer
    26  shall,  not less than sixty days preceding the date of the sale of a tax
    27  lien or tax liens, submit to the department of housing, a description by
    28  tax map number, or by such other identification as the enforcing officer
    29  may deem appropriate, of any parcel  of  residential  real  property  on
    30  which  there  is  a tax lien that may be foreclosed by the tax district.
    31  The head of the department of housing shall  determine  and  direct  the
    32  enforcing officer, not less than ten days preceding the date of the sale
    33  of  a  tax  lien  or  tax liens, whether any such parcel is a distressed
    34  property as defined in subdivision one of section eleven hundred  forty-
    35  one  of  this  title.  Any  tax  lien  on a parcel so determined to be a
    36  distressed property shall not be included in such  sale.  In  connection
    37  with a subsequent sale of a tax lien or tax liens, the enforcing officer
    38  may,  not  less than sixty days preceding the date of the sale, resubmit
    39  to the head of the department  of  housing  a  description  by  tax  map
    40  number,  or  by  such  other identification as the enforcing officer may
    41  deem appropriate, of any parcel of residential real  property  that  was
    42  previously  determined  to  be  a  distressed  property pursuant to this
    43  subdivision and on which there is a tax lien that  may  be  included  in
    44  such  sale.  The  head  of the department of housing shall determine and
    45  direct the enforcing officer, not less than ten days preceding the  date
    46  of  the  sale, whether such parcel remains a distressed property. If the
    47  head of the department of housing determines that the parcel  is  not  a
    48  distressed  property, then the tax lien on the parcel may be included in
    49  the sale.
    50    2. The head of the  department  of  housing  may  periodically  review
    51  whether  a parcel of residential real property is subject to subdivision
    52  three of this section or subdivision seven  of  section  eleven  hundred
    53  thirty-six-a  of this article remains a distressed property. If the head
    54  of the department of  housing  determines  that  the  parcel  is  not  a
    55  distressed  property  as  defined  in  subdivision one of section eleven

        A. 6116                             3
     1  hundred forty-one of this title, then the parcel shall not be subject to
     2  such subdivisions.
     3    3.  Any  parcel  so  determined  to  be a distressed property shall be
     4  subject to an in rem foreclosure  action,  or  in  the  case  where  the
     5  enforcing  officer does not commence such action the head of the depart-
     6  ment of housing shall evaluate such parcel and take such action as he or
     7  she deems appropriate under the programs, existing at the time  of  such
     8  evaluation,  that are designed to encourage the rehabilitation and pres-
     9  ervation of existing housing, and shall monitor or cause to be monitored
    10  the status of the property.  The head of the department of  housing,  in
    11  his  or her discretion, shall cause an inspection to be conducted on any
    12  parcel so determined to be a distressed property. In addition, the  head
    13  of  the  department of housing shall submit to the governing body of the
    14  tax district in which such distressed property is situate, a list of all
    15  parcels so determined to be a distressed  property  within  thirty  days
    16  from the date such parcels are identified as a distressed property.
    17    §  2.  The real property tax law is amended by adding two new sections
    18  1136-a and 1136-b to read as follows:
    19    § 1136-a. Special procedures relating to final judgment and release of
    20  residential real property. Notwithstanding any other provision of law to
    21  the contrary:
    22    1. The court shall determine upon proof and shall make a finding  upon
    23  such  proof  whether  there  has been due compliance by the tax district
    24  with the applicable provisions of this chapter.
    25    2. (a) The court shall make a final judgment authorizing the award  of
    26  possession  of  any parcel of residential real property described in the
    27  list of delinquent taxes not redeemed or withdrawn as provided  in  this
    28  article  and  as  to  which  no answer is interposed as provided in this
    29  section, and authorizing the enforcing officer to prepare,  execute  and
    30  cause to be recorded a deed conveying either to the tax district or to a
    31  third  party  deemed qualified and designated by the head of the depart-
    32  ment of housing full and complete title to such lands. Any such  convey-
    33  ance to a third party shall be for an existing use.
    34    (b) Such third party shall be deemed qualified and shall be designated
    35  pursuant to such criteria as are established in rules promulgated by the
    36  head of the department of housing, provided, however, that such criteria
    37  shall  include but not be limited to: residential management experience;
    38  financial ability;  rehabilitation  experience;  ability  to  work  with
    39  government  and community organizations; neighborhood ties; and that the
    40  head of the department of housing shall consider whether the third party
    41  is a responsible legal tenant, not-for-profit organization or  neighbor-
    42  hood-based-for-profit  individual  or  organization.  The  head  of  the
    43  department of housing shall not deem qualified any third party  who  has
    44  been  finally  adjudicated  by a court of competent jurisdiction, within
    45  seven years of the date on which such third  party  would  otherwise  be
    46  deemed  qualified,  to have violated any section of articles one hundred
    47  fifty, one hundred seventy-five, one hundred  seventy-six,  one  hundred
    48  eighty,  one  hundred eighty-five or two hundred of the penal law or any
    49  similar laws of another jurisdiction,  or  who  has  been  suspended  or
    50  debarred from contracting with the tax district or any agency of the tax
    51  district pursuant to any provision of law, rule or regulation during the
    52  period  of  such  suspension or debarment.  The rules promulgated by the
    53  head of the department of housing pursuant to this paragraph may  estab-
    54  lish other bases for disqualification of a third party.
    55    3. (a) Following the expiration of the four-month period prescribed in
    56  subdivision  four  of this section, but not more than eight months after

        A. 6116                             4
     1  the date on which, pursuant to subdivision  two  of  this  section,  the
     2  final  judgment authorizing the award of possession of a parcel of resi-
     3  dential real property was entered, the enforcing officer may  execute  a
     4  deed,  pursuant to subdivision two of this section, with respect to such
     5  parcel. The owner of said parcel shall  continue  to  have  all  of  the
     6  rights,  liabilities,  responsibilities,  duties  and  obligations of an
     7  owner of such parcel, including, but not limited  to,  maintaining  such
     8  parcel  in  compliance  with  the housing maintenance, building and fire
     9  codes, and all other applicable laws, unless  and  until  the  enforcing
    10  officer  has  prepared and executed a deed conveying to the tax district
    11  or to a third party full and complete title to  such  parcel.  Upon  the
    12  execution  of  such  deed,  the tax district or the third party shall be
    13  seized of an estate in fee simple absolute in such land and all persons,
    14  including the state of New York, infants,  incompetents,  absentees  and
    15  non-residents  who  may have had any right, title, interest, claim, lien
    16  or equity of redemption in or upon such lands shall be barred and forev-
    17  er foreclosed of all such right, title, interest, claim, lien or  equity
    18  of redemption.  The appointment and tenure of receivers, trustees or any
    19  other  persons,  including  administrators  under article seven-A of the
    20  real property actions and proceedings law, appointed by an  order  of  a
    21  court  to manage real property, shall terminate when title to such prop-
    22  erty vests in the city or a third party pursuant to  the  provisions  of
    23  this chapter. After such termination, said receivers, trustees or admin-
    24  istrators shall be accountable to the courts that appointed them for the
    25  faithful  performance  of their fiduciary obligations during the term of
    26  their appointment and to the tax district or such third  party  for  any
    27  rents  and income received by them for any period subsequent to the date
    28  of the vesting of title in the tax district or such third party.
    29    (b) If the tax district serves a tenant in possession  of  a  dwelling
    30  unit with notice of termination of tenancy on grounds other than nonpay-
    31  ment of rent, the acceptance of rent for the first forty-five days after
    32  termination  of  tenancy by anyone other than an employee of the depart-
    33  ment of housing designated by the department of housing to receive  such
    34  rent  shall not be deemed or construed as a waiver of the tax district's
    35  right to initiate and prosecute a proceeding to  terminate  the  tenancy
    36  for good cause.
    37    4. Within four months after the date on which, pursuant to subdivision
    38  two  of  this  section,  the  final  judgment  authorizing  the award of
    39  possession of a parcel of residential real  property  was  entered,  any
    40  person  claiming to have an interest in such parcel shall have the right
    41  to make a payment to the enforcing officer of all taxes, assessments and
    42  other legal charges owing on said parcel, the lawful interest thereon to
    43  the date of payment and a penalty of five percent  of  said  payment  of
    44  taxes,  assessments  and other legal charges and interest, which penalty
    45  may not exceed one thousand dollars. Such payment shall be made in  cash
    46  or  by  certified  or  bank  check.  Within such four-month period, such
    47  interested person may also request an  installment  agreement  from  the
    48  enforcing  officer.  Such  agreement  shall require, in addition to full
    49  payment of the penalty specified in this subdivision at  the  time  such
    50  agreement  is entered into, the payment at such time of a first install-
    51  ment equal to fifty percent of all taxes, assessments  and  other  legal
    52  charges, and the lawful interest thereon, then owing on such parcel, and
    53  the  payment  of  the balance of such taxes, assessments and other legal
    54  charges and interest in four equal quarterly installments together  with
    55  all  current  taxes,  assessments  and  other  legal charges that accrue
    56  during such period. Upon receipt of payment in full of the amount speci-

        A. 6116                             5
     1  fied in the first sentence of this subdivision,  the  enforcing  officer
     2  shall  direct  the attorney for the tax district to prepare and cause to
     3  be entered an order discontinuing the in rem tax foreclosure  action  as
     4  to said property, cancelling the notice of pendency of such action as to
     5  said  property  and  vacating and setting aside the final judgment. Upon
     6  the execution of an installment agreement and payment of the amounts due
     7  at the time such agreement is executed as provided in this  subdivision,
     8  the  enforcing officer shall direct the attorney for the tax district to
     9  prepare and cause to be entered an order vacating and setting aside  the
    10  final  judgment.  The  entry  of  either  such  order  shall restore all
    11  parties, including owners, mortgagees and any and all lienors, receivers
    12  and administrators and encumbrancers, to the status they held immediate-
    13  ly before such final judgment was entered.  Where the enforcing  officer
    14  approves  an application requesting an installment agreement pursuant to
    15  this subdivision, the order vacating and setting aside the  final  judg-
    16  ment shall provide that in the event of any default as to the payment of
    17  either  quarterly  installments  or  current taxes, assessments or other
    18  legal charges during the term of such agreement, all payments under said
    19  agreement shall be forfeited and the  attorney  for  the  tax  district,
    20  immediately  upon notification by the enforcing officer of such default,
    21  shall cause to be entered as to such property a supplemental judgment of
    22  foreclosure in the in rem action which authorizes the enforcing  officer
    23  to  prepare, execute and cause to be recorded a deed conveying either to
    24  the tax district or to a third party full and  complete  title  to  such
    25  lands.  Upon  the entry of such supplemental judgment, the provisions of
    26  subdivision three of this section shall apply in the same manner as such
    27  subdivision would have applied had no payment been made nor  installment
    28  agreement executed during the four-month period specified in this subdi-
    29  vision.
    30    5.  Every  deed given pursuant to the provisions of this section shall
    31  be presumptive evidence that the action and all proceedings therein  and
    32  all  proceedings  prior thereto from and including the assessment of the
    33  lands affected and all notices required  by  law  were  regular  and  in
    34  accordance  with  all  provisions  of  law  relating thereto. After four
    35  months from the date of entry of  the  final  judgment  authorizing  the
    36  award  of possession of any parcel of residential real property pursuant
    37  to the provisions of this section, the presumption shall be  conclusive.
    38  No  action to set aside such deed may be maintained unless the action is
    39  commenced and a notice of pendency of the action is filed in the  office
    40  of  the  proper  county  clerk  prior  to  the time that the presumption
    41  becomes conclusive as aforesaid. Should any  lawsuit  or  proceeding  be
    42  commenced  to  set  aside  a deed conveying to a third party a parcel of
    43  residential real property pursuant to the provisions  of  this  section,
    44  such  third party shall send to the attorney for the tax district within
    45  ten days of their receipt a copy of any  papers  served  on  such  third
    46  party in such lawsuit or proceeding.
    47    6.  If  the enforcing officer does not execute a deed conveying to the
    48  tax district or to a third party a parcel of residential  real  property
    49  within  eight  months  after the entry of final judgment authorizing the
    50  award of possession of such parcel pursuant to subdivision two  of  this
    51  section,  the  enforcing  officer  shall direct the attorney for the tax
    52  district to prepare and cause to be entered an order  discontinuing  the
    53  in  rem  foreclosure action as to said property, canceling the notice of
    54  pendency of such action as to said property  and  vacating  and  setting
    55  aside  said  final  judgment.  The entry of such order shall restore all
    56  parties, including owners, mortgagees and any and all lienors, receivers

        A. 6116                             6
     1  and administrators and encumbrancers, to the status they held immediate-
     2  ly before such final judgment was entered.
     3    7. If the enforcing officer directs the attorney for the tax district,
     4  pursuant  to subdivision six of this section, to prepare and cause to be
     5  entered an order  discontinuing  the  in  rem  foreclosure  action  with
     6  respect  to  a  parcel  of  residential  real  property determined to be
     7  distressed pursuant to section eleven hundred forty-two of this article,
     8  the head of the department of housing shall evaluate the  parcel  deter-
     9  mined to be distressed and take such action as he or she deems appropri-
    10  ate  under  the  programs, existing at the time of such evaluation, that
    11  are designed to encourage the rehabilitation and preservation of  exist-
    12  ing  housing,  and  shall monitor or cause to be monitored the status of
    13  the property. The head of the department of  housing  shall  maintain  a
    14  register of properties determined to be distressed.
    15    §  1136-b.  Governing  body review of conveyance to a third party. The
    16  enforcing officer shall, prior to the execution of a deed conveying full
    17  and complete title of any parcel of residential real property to a third
    18  party pursuant to subdivision three of section  eleven  hundred  thirty-
    19  six-a  of  this  title, notify the governing body of the tax district in
    20  which such residential real property is situated of the proposed convey-
    21  ance.  Within forty-five days of such notification, the  governing  body
    22  may  act by local law disapproving the proposed conveyance. In the event
    23  the governing body does not act by local law within such forty-five  day
    24  period, the governing body shall be deemed to have approved the proposed
    25  conveyance.  During such forty-five day period or, if the governing body
    26  acts by local law pursuant to this section, during the  period  of  time
    27  from  the  notification of the governing body to the presentation to the
    28  chief executive officer of such tax district  of  such  local  law,  the
    29  eight-month  period  provided  in  subdivision  three  of section eleven
    30  hundred thirty-six-a of this title shall be tolled.
    31    § 3. This act shall take effect on the one hundred eightieth day after
    32  it shall have become a law. Effective immediately, the addition,  amend-
    33  ment and/or repeal of any rule or regulation necessary for the implemen-
    34  tation  of  this act on its effective date are authorized to be made and
    35  completed on or before such effective date.
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