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Volume 3 - Opinions of Counsel SBEA No. 80

Opinions of Counsel index

Taxes (conflicting liens) (Westchester County) - Real Property Tax Law, §§ 1122, 1136, 1150, Westchester County Administrative Code, § 568 et seq.:

Pursuant to Article 11 of the Real Property Tax Law, a town can initiate in rem foreclosure proceedings which will bind villages in accordance with the court’s final order. Foreclosure pursuant to the Westchester County Administrative Code requires the formulation of agreements pursuant to section 574 of such code in order to clear title of all tax liens including those held by villages.

We have received an inquiry concerning the commencement of in rem foreclosure proceedings on properties located in Westchester County, subject to both town and village tax liens.

It is our opinion that it is proper to clear the titles to the properties in question by means of the in rem tax foreclosure procedure. The town cannot clear title simply by pursuing an administrative tax sale procedure, just as the village cannot clear all tax liens by means of an administrative sale. The foreclosure procedure set forth in the Westchester County Administrative Code (§ 568 et seq.) was enacted to facilitate the clearance of conflicting liens which attached to single parcels, and the above is certainly the proper course of action to pursue.

The Westchester County Administrative Code includes a section (574) which authorizes agreements between municipalities which own conflicting tax liens on the same parcel. Our reading of the preceding provisions of the Code (specifically §§ 568, 570, 571 and 572) is that; absent an agreement pursuant to section 574, the foreclosure proceeding serves only to clear the title of town, county, special district and school taxes; village tax liens remain effective. The authorization contained in section 574 appears to be necessary if the intent is to clear title pursuant to the Westchester County Administrative Code.

However, we believe that an alternative method of foreclosure exists in that the town has the authority to adopt the procedure set forth in Title 3, Article 11 of the Real Property Tax Law (Boeck v. Incorporated Village of South Floral Park, 174 Misc. 372, 19 N.Y.S. 2d 946). Pursuant to subdivision 6 of section 1122 of the Real Property Tax Law, a tax district, other than one foreclosing, having a lien upon any parcel described in the in rem listing may redeem such parcel or may serve a duly verified answer setting forth in detail the nature and amount of its interest and any defense or objections to the foreclosure of the tax lien. Subdivision 6 further provides that “[i]n the event of failure to redeem or answer by any person having the right to redeem or answer, such person shall be in default and shall be barred and forever foreclosed from all his right, title and interest in and to the parcels described in such list of delinquent taxes and a judgment in foreclosure may be taken as herein provided.”

Thus, unlike the Westchester County Administrative Code procedure, the system set forth in the Real Property Tax Law initially includes all tax districts which hold liens against the subject property. Accordingly, subdivision 3 of section 1136 directs the court to determine the relative interest of any other tax districts which have interposed an answer in the proceeding and further to determine the state of the title subsequent to foreclosure in light of the existing tax liens. It is significant that paragraph (b) of subdivision 3 provides for the possible conveyance of title “subject to any right, title or interest in or lien upon such parcel of such other tax district or districts.”

Both subdivision 3 of section 1136 and section 1150 authorize the making of agreements by the tax districts holding conflicting tax liens on the same parcel. Subdivision 5 of section 1136 contains a detailed description of the state of the title subsequent to the foreclosure action and such subdivision includes specific language that “title shall be full and complete in the absence of an agreement between tax districts” or “unless the conveyance is expressly made subject to tax liens of a tax district as herein provided”.

Therefore, it appears that foreclosure pursuant to the Westchester County Administrative Code would require the formulation of agreements pursuant to section 574 in order to clear title of all tax liens including those held by the villages. However, pursuant to Title 3 of Article 11 of the Real Property Tax Law, it appears that a town can initiate in rem foreclosure proceedings which will bind villages in accordance with the court’s final order.

September 5, 1973

Updated: