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Volume 3 - Opinions of Counsel SBEA No. 120

Opinions of Counsel index

Taxes (bills) (notice, escrow account) - Real Property Tax Law, § 922:

Where an escrow account arrangement exists with respect to mortgaged property, and the owner of the real property makes a written request that his tax bills be sent to the mortgagee bank, this request should be honored by the tax collector.

Our opinion has been requested regarding the apparent lack of legislative authority for the mailing of tax bills to mortgagee banks rather than to the owners of real property. The governing statute, section 922 of the Real Property Tax Law, provides, in part, as follows:

1. Upon receipt of the tax roll and warrant, the collecting officer shall mail to each owner of real property listed thereon a statement showing the amount of taxes due on his property, the period covered by such taxes, the times and places fixed for receiving taxes and the name and address of the collecting officer.

* * *

3. The failure to mail any such statement, or the failure of any such owner to receive the same, shall not in any way affect the validity of the taxes or interest prescribed by law with respect thereto.

Where real property is mortgaged, it is common practice for the mortgagee bank to require the owner to maintain an escrow account for the payment of annual real property taxes levied against the property. This arrangement obviously serves a dual purpose of protecting both the mortgagor owner and the mortgagee bank from the imposition of the enforcement provisions of the Real Property Tax Law as a result of delinquent real property taxes. In addition, many owners of real property consider the monthly contribution to an escrow account to be a benefit because the setting aside of money which will become due at some later date is most easily accomplished by this method of forced saving.

          Accordingly, it has been our opinion that where an escrow account arrangement exists, and the owner of the real property makes a written request that his tax bills be sent to the mortgagee bank, this request should be honored by the tax collector. The compliance with this written request by the municipality is, in our opinion, consistent with the purpose of section 922 which is, of course, to provide a personal notice that taxes are due and payable during a specified time period.

February 20, 1974

NOTE:  Construes law prior to L.1989, c.440.

Updated: