New York A 3901: Relates to the distribution of surplus proceeds from a tax foreclosure sale

Bill Text

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A03901 Summary:

BILL NOA03901 

&nbsp

SAME ASNo Same As

&nbsp

SPONSORWilliams

&nbsp

COSPNSRMcDonough, Novakhov

&nbsp

MLTSPNSR

&nbsp

Add §989, amd §§1104 & 1166, RPT L

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Provides for the distribution of proceeds from a tax foreclosure sale; requires notice to a former property owner of the existence of a surplus.

Go to top A03901 Actions:

BILL NOA03901 

&nbsp

01/30/2025referred to real property taxation

01/07/2026referred to real property taxation

Go to topA03901 Committee&nbspVotes:

Go to topA03901 Floor&nbspVotes:

There are no Assembly votes for this bill in this legislative session.

Go to topA03901 Text:

 STATE OF NEW YORK
 ________________________________________________________________________

 3901

 2025-2026 Regular Sessions

 IN ASSEMBLY

 January 30, 2025
 ___________

 Introduced by M. of A. WILLIAMS -- read once and referred to the Commit-
 tee on Real Property Taxation

 AN ACT to amend the real property tax law, in relation to distribution
 of surplus in tax enforcement proceedings

 The People of the State of New York, represented in Senate and Assem-
 bly, do enact as follows:

 1 Section 1. The real property tax law is amended by adding a new
 2 section 989 to read as follows:
 3 § 989. Distribution of surplus in tax enforcement proceedings. 1.
 4 Notwithstanding the provisions of any general, special or local law to
 5 the contrary, when a property owner is divested of title due to the
 6 foreclosure of a delinquent real property tax lien on the property, and
 7 the property is sold to a third party, the proceeds of such sale shall
 8 be distributed as follows:
 9 (a) If the proceeds of the sale are less than or equal to the total
 10 taxes due on the property plus interest, penalties and other charges
 11 duly imposed upon the property, including the administrative costs asso-
 12 ciated with the foreclosure process, the entire proceeds shall be paid
 13 to the local government.
 14 (b) If the proceeds of the sale exceed the total taxes due on the
 15 property plus interest, penalties and other charges duly imposed upon
 16 the property, including the administrative costs associated with the
 17 foreclosure process, the excess shall be distributed as follows:
 18 (i) If the property is not subject to other liens, the excess proceeds
 19 shall be paid to the prior owner or owners of the property.
 20 (ii) If the property is subject to other liens, the lienholders shall
 21 be paid from the excess proceeds in the same order and to the same
 22 extent as they would be in an action to foreclose a mortgage pursuant to
 23 article thirteen of the real property actions and proceedings law. Any
 24 proceeds remaining after the other lienholders have been so paid shall
 25 be paid to the prior owner or owners of the property.

 EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD03002-02-5

 A. 3901 2

 1 2. The provisions of this section shall apply whether property is sold
 2 through a public auction or otherwise.
 3 3. When a foreclosure concludes with the tax district taking title to
 4 property, the provisions of this section shall not apply unless and
 5 until the tax district sells the property to a third party; provided
 6 that in such a case, if there are excess proceeds to be paid to the
 7 prior owner or owners of the property, such proceeds shall be paid to
 8 the owner or owners of the property prior to its acquisition by the tax
 9 district.
 10 4. The provisions of this section shall not apply to the enforcement
 11 of tax liens on abandoned real property. For purposes of this section,
 12 real property shall be deemed abandoned if it:
 13 (a) has been included on a local municipal roll, registry or list of
 14 vacant and abandoned residential property pursuant to section eleven
 15 hundred eleven-a of this chapter, or
 16 (b) has been certified as abandoned commercial or industrial real
 17 property pursuant to article nineteen-A of the real property actions and
 18 proceedings law, or
 19 (c) has been included on the statewide registry of vacant and aban-
 20 doned property pursuant to section thirteen hundred ten of the real
 21 property actions and proceedings law.
 22 5. A municipality shall notify a property owner when the owner's prop-
 23 erty