BILL NUMBER: S5383
SPONSOR: HARCKHAM
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to surplus
proceeds from tax lien foreclosures
 
PURPOSE:
This bill would return equity built in a property to a previous owner
after a municipality has collected outstanding taxes, interest, liens,
and fees through a tax foreclosure auction.
 
SUMMARY OF PROVISIONS:
Section 1 amends subdivision 2 of section 1166 of the real property law
to require that surplus proceeds from a tax foreclosure auction be
returned to the previous property owner.
Section 2 establishes the effective date.
 
LEGISLATIVE HISTORY:
2021-2022: S9572/A10681 - Died in Rules/Died in Real Property Taxation
 
JUSTIFICATION:
With economic uncertainty and a pandemic recovery underway, millions of
households throughout the United States are finding themselves in finan-
cially unstable situations. While relief was justly provided to tenants
to compensate for a loss of income, some homeowners may not have had the
same relief for mortgages and taxes. This bill would provide relief to
families whose property was foreclosed on for tax arrears by allowing
them to acquire the net proceeds from tax foreclosure auctions after all
outstanding debts have been paid. Just because a municipality was owed
taxes does not mean it should get the windfall from outstanding equity
in the property. After tax debts have been collected, with interest,
there is no reason the municipality should also be entitled to the equi-
ty that the previous homeowner built up in that property.
 
FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
Effective immediately.