N.Y. Real Property Tax Law § 1196: Determination of existence and amount of surplus

§ 1196. Determination of existence and amount of surplus. 1. (a)

Within forty-five days after the sale of tax-foreclosed property, the

enforcing officer shall determine whether a surplus is attributable to

such sale and if so, the amount thereof. Subject to the provisions of

subdivision two of this section, such determination shall be made by

ascertaining the sum of the total amount of taxes due plus interest,

penalties and other charges as defined by section eleven hundred two of

this article, and subtracting such sum from whichever of the following

is applicable:

(i) where the sale was a public sale, the amount to be so subtracted

shall be the amount paid for the property;

(ii) where the sale was not a public sale, the amount to be so

subtracted shall be either (A) the full value of the property as shown

on the most recent tax roll, (B) if available, an appraisal prepared by

a licensed New York state appraiser that establishes the full value of

the property as of the date of the transfer of title, or (C) the full

value of the property as of the date of the transfer of title as

determined by such other valuation method as the enforcing officer

reasonably determines will result in just compensation to the former

owner and other parties whose interests were extinguished by the

foreclosure.

(b) For purposes of this subdivision, where the enforcing officer has

been notified that the tax district intends to retain tax-foreclosed

property for a public use, the property shall be deemed to have been

sold on the date that the enforcing officer was so notified, and the

enforcing officer shall determine the existence and amount of a surplus

relative to such property in the manner provided by subparagraph (ii) of

paragraph (a) of this subdivision.

2. Notwithstanding the provisions of subdivision one of this section,

when a tax district has sold or conveyed tax-foreclosed property to a

land bank, a housing development agency or another public entity, and

such sale or conveyance was not the result of a public sale, or when a

tax district has determined to retain tax-foreclosed property for a

public use, no surplus shall be payable if all of the following

conditions are satisfied:

(a) prior to such sale, conveyance or determination, the property had

been offered for sale at two separate public auctions conducted at least

three months apart from one another,

(b) both auctions had been conducted in full compliance with the

provisions of section two hundred thirty-one of the real property

actions and proceedings law,

(c) the minimum acceptable bid at each auction had been set at an

amount no greater than the sum of the taxes due plus interest, penalties

and other charges, and

(d) no qualifying bids were received for the property at either

auction.

3. (a) If the enforcing officer determines that no surplus is

attributable to the sale, such enforcing officer shall submit a report

to the court describing the circumstances of the sale, stating that no

surplus was attributable to the sale and demonstrating how the enforcing

officer reached that conclusion.

(b) If the enforcing officer determines that a surplus is attributable

to the sale, such enforcing officer shall submit a report to the court

describing the circumstances of the sale, stating that a surplus was

attributable to the sale, and demonstrating how the amount of the

surplus was determined. Such surplus shall be paid to the court

therewith. Within ten days of submitting such report, the enforcing

officer shall notify the former property owner that a surplus was

attributable to the sale of such property, that such surplus has been

paid into court, and that the court will notify the interested parties

of the procedure to be followed in order to make a claim for a share of

the surplus.

(c) Where the enforcing officer's determination of surplus is based

upon such enforcing officer's estimate of the property's value, the

enforcing officer's report to the court shall set forth an explanation

of how this estimate was made, including the evidence upon which it was

based.

4. Upon approval by the court of the enforcing officer's report, the

tax district shall have no further responsibilities in relation to the

parcel or any surplus attributable thereto, except to the extent the

court directs otherwise pursuant to section eleven hundred ninety-seven

of this title.