N.Y. Real Property Tax Law § 1190: Contracts for the sale of delinquent tax liens

§ 1190. Contracts for the sale of delinquent tax liens. 1. (a)

Notwithstanding any general or special law to the contrary, a tax

district may enter into a contract to sell some or all of the delinquent

tax liens held by it to the state of New York municipal bond bank agency

created pursuant to section twenty-four hundred thirty-three of the

public authorities law, hereinafter referred to as the "bond bank", or

to one or more tax lien entities created by the bond bank pursuant to

section twenty-four hundred thirty-five-b of the public authorities law.

A tax district may enter into such a contract whether or not it is

otherwise subject to the provisions of this article; provided, however,

that any county, city or town that is not subject to the provisions of

this article pursuant to subdivision two of section eleven hundred four

of this article may continue to enforce the collection of delinquent

taxes, including through the sale of tax liens, pursuant to a county

charter, city charter, administrative code or special law.

(b) The interest rate applicable to all delinquent tax liens sold

pursuant to this section shall be as prescribed by section nine hundred

twenty-four-a of this chapter or such higher rate as is applicable to

such delinquent tax liens in the tax district which is selling its held

delinquent tax liens to the bond bank, as of the date of the tax lien

sale. Such rate shall be applied to the total amount due as of the date

of the tax lien sale, including interest, penalties, and charges.

2. (a) At least thirty days prior to the date on which a sale of

delinquent tax liens is scheduled to occur, the enforcing officer shall

cause a notice to be mailed, by either ordinary first class mail or

certified mail, to: (i) the owner or owners of each affected parcel as

appearing on the tax roll, or, if a parcel has been transferred after

the applicable taxable status date, to the new owner or owners as

reported pursuant to section five hundred seventy-four of this chapter

or a comparable law; and (ii) to any other person who has filed a

declaration of interest pursuant to section eleven hundred twenty-six of

this article, or a comparable instrument pursuant to a comparable law,

which has not expired. Failure to provide notice, or failure of the

addressee to receive notice pursuant to this subdivision shall not in

any way affect the validity of any sale of a tax lien or tax liens

pursuant to this chapter, the validity of the taxes or interest

prescribed by law with respect thereto.

(b) Such notice shall identify the affected parcel and be in

substantially the following form:

"The real property identified in this notice is subject to a

delinquent tax lien held by __________ (enter name of tax district) for

________ (identify fiscal year). According to our records, you own or

have an interest in that property. You are hereby advised that on or

after __________ (enter expected date of sale), the delinquent tax lien

on this property will be sold to ____________________ (enter name of

purchaser). To pay the delinquent taxes prior to the sale, contact

______________ (enter the name, title, business address and telephone

number of enforcing officer of the tax district)."

(c) Where appropriate, the notice may also include language

substantially as follows: "Following the sale, the purchaser of the lien

will have the right to collect and enforce the delinquent taxes against

your property, and, if necessary, to hire a private collection agency to

assist it in securing payment of the amount due. To pay the delinquent

taxes on or after the sale, you will have to contact _________________

(enter name of tax lien purchaser or its tax collection agent)

directly."

(d) Where the property in question is subject to an installment

agreement executed pursuant to section eleven hundred eighty-four of

this article, the notice shall further include language substantially as

follows: "The sale of the tax liens on your property will not affect

your right to continue making installment payments in the amounts and at

the times called for by your agreement with ________________________

(enter name of tax district). However, following the sale, the tax lien

purchaser will assume the rights of the tax district under the

agreement, and future installment payments should be made to

_______________ (enter name of tax lien purchaser or its tax collection

agent) directly."

3. Upon a sale of delinquent tax liens pursuant to this section, the

enforcing officer shall issue and deliver to the purchaser one or more

certificates identifying the affected parcels and the total amount due

on each as of the date of the sale, including interest, penalties, and

charges. The enforcing officer shall retain a copy of each such

certificate in his or her office, and shall maintain records that will

enable interested parties to determine which liens have been sold, to

whom, and the total amount due on such liens when they were sold. When

the enforcing officer is duly notified by the tax lien purchaser or its

successor in interest that a lien has been redeemed, he or she shall

update those records to reflect such redemption. The purchaser of such

tax lien may record the certificates evidencing the purchase and sale of

the liens in the office of the county recording officer for the tax

district. The tax district shall have no further rights or

responsibilities relative to delinquent tax liens which have been sold

pursuant to this section, except as may otherwise be provided in the

contract for the sale of delinquent tax liens.

4. The bond bank or its tax lien entity may, at its discretion, accept

partial payments and may enter into installment agreements with owners

on such terms and conditions as the tax lien purchaser shall deem

advisable, without regard to any restrictions that might be applicable

if such purchaser were a tax district. Where a property is subject to

more than one delinquent tax lien, the liens shall be redeemed in the

manner set forth in section eleven hundred twelve of this article,

provided, however, that payments made on a tax lien shall be applied

first to pay any reasonable costs incurred in the collection of the tax

lien including reasonable attorneys' fees, legal costs, allowances and

disbursements, next to pay accrued interest due on the tax lien, and

finally to pay the principal of the tax lien, until the entire amount of

the lien has been paid.