Volume 7 - Opinions of Counsel SBEA No. 36
Correction of errors (unlawful entry) (non-existent parcel); Tax sales (cancellation) (non-existent parcel) – Real Property Tax Law, §§ 550, 1026:
A grantee of a tax deed recipient may not make application for cancellation of the tax sale under section 1026 of the Real Property Tax Law.
The assessment of a non-existent parcel is an “unlawful entry” under section 550(7)(c) of the Real Property Tax Law.
A county treasurer has asked whether he may cancel a sale of real property for unpaid taxes pursuant to section 1026 of the Real Property Tax Law, upon application by a grantee of the purchaser at the tax lien sale. The treasurer bid in a parcel for the county at a tax lien sale (§1008(3)), issued a tax deed to the county (§1018(4)) and then sold the property at public auction. The grantee has since discovered that the “property” does not exist.
Section 1026 authorizes a county treasurer to cancel a sale of real property for unpaid taxes if “he discovers...that the sale was for any cause invalid or ineffectual to give title to the real property sold”. This is true whether he discovers this before conveyance (subd. 1) or thereafter (subd. 2). As noted, the parties have learned that the parcel sold at public auction does not exist, and it should be evident that a purported sale of non-existent property would be “invalid or ineffectual to give title” to any real property (see, e.g., 1936, Op.Atty.Gen. 195).
However, an examination of the language of section 1026 makes it clear that only a person “having an interest [in the real property] at the time of the sale” is entitled to apply for a cancellation of the sale after the conveyance of title (subd. 2). Case law supports the proposition that this section has no application to a grantee of a tax deed recipient. For example, in Lindlots Realty Corp. v. Suffolk County, 251 App.Div. 340, 296 N.Y.S. 599 (2d Dept., 1937), aff’d 278 N.Y. 45, 15 N.E.2d 393 (1938), the Appellate Division held as follows:
This plaintiff was not a purchaser at any tax sale, but bought the land from the purchaser (the county) years after the sale had been held. Consequently, the plaintiff had no interest at the time of the sale and could not regain its money by an application to the county treasurer (296 N.Y.S. at 606).
To a similar effect, see People ex rel. Hall v. Woodruff, 57 App.Div. 342, 68 N.Y.S. 100, at 102 (3d Dept., 1901); and Bandler v. Hill, 84 Misc. 359, 146 N.Y.S. 98, at 102 (S.Ct., Nassau Co., 1914).
In conclusion, the grantee of a person who or body which acquires title to real property by tax deed cannot make application to the county treasurer for cancellation of the tax sale pursuant to the provisions of section 1026 of the Real Property Tax Law.
We have also been asked whether there is any provision of law by means of which a grantee could recover the amount of taxes paid prior to the discovery that the parcel is non-existent.
It is our opinion that this assessment constitutes an “unlawful entry” as that term is defined in paragraph (c) of subdivision 7 of section 550 of the Real Property Tax Law. Paragraph (c) defines as an unlawful entry “an entry of assessed valuation on an assessment roll or on a tax roll, or both, which has been made by a person or body without the authority to make such entry”. It should be obvious that an assessor lacks the authority to assess non-existent property (see, e.g. Op.State Compt. 69-89). For this type of error, a refund of taxes paid may be had if application is made within three years from the date of the annexation of the warrant for the collection of the tax (see, §556(1)(a)).
This opinion is limited to the question of possible administrative remedies. Whether some judicial remedy would be available, as, for example, a cause of action grounded in contract, has not been considered.
September 7, 1979