a. Preparation of notification of summary foreclosure action. Upon receipt by the commissioner of finance of signed and notarized copies of the forms described in subdivision e of section 11-412.4 of this chapter, and upon the completion of reasonable efforts by the commissioner of finance to confirm that there are no mortgages, liens or encumbrances on the property that is the subject of the summary foreclosure action, the commissioner of finance shall prepare a notice of the summary foreclosure action. Such notice shall bear a caption containing the number of such summary foreclosure action, the borough or the section of a tax map or portion of a section of a tax map in which such property is located, the class of such property, and a statement of the rate at which interest will be computed for the liens it includes. Such notification shall include (i) a brief description of such property to be known as “description of property”, in a manner sufficient to identify the property, including block and lot number, street and street number, or in the absence of such information the parcel or tract identification number shown on a tax map or on a map filed in the county clerk’s or register’s office; and (ii) a statement of the amounts and dates of all unpaid tax liens that are subject to foreclosure as of the date of receipt by the commissioner of the forms described in subdivision d of section 11-412.4 of this chapter.
b. Filing of notice of summary foreclosure action. Two duplicate originals of the notice of the summary foreclosure action, prepared pursuant to subdivision a of this section, verified by the commissioner of finance or a subordinate designated by the commissioner, shall be filed in the office of the clerk of the county in which the property is situated. Such filing shall constitute and have the same force and effect as the filing and recording in such office of a notice of pendency of action and as the filing in the supreme court in such county of a complaint by the city as to the property described in such notice, to enforce the payment of the delinquent taxes, assessments or other lawful charges that have accumulated and become liens against such property.
c. Docketing of property by county clerk. Each county clerk with whom such a notice of the summary foreclosure action is filed shall, on the date of said filing, place and thereafter maintain one duplicate original copy thereof, as separately and permanently bound by the commissioner of finance, adjacent to and together with the block index of notices of pendency of action and each county clerk shall, on the date of said filing or as soon thereafter as with due diligence is practicable, docket the property described in said block index of notices of pendency of action, which shall constitute due filing, recording and indexing of the notice constituting such delinquent taxes in lieu of any other requirement under rule 6511 of the civil practice law and rules or otherwise.
d. Filing by commissioner of finance. The commissioner of finance shall file a copy of each notice of the summary foreclosure action, certified as such copy by him or her or a subordinate designated by the commissioner, in the borough office of the department of finance in the borough in which the property listed therein is situated and in the office of the corporation counsel. The validity of any proceeding hereunder shall not be affected by any omission or error of the commissioner of finance in the designation of a street or street number or by any other similar omission or error.
e. Public notice of summary foreclosure. Upon the filing of a notice of the summary foreclosure action in the office of the county clerk, the commissioner of finance forthwith shall cause a notice of foreclosure to be posted on the department’s website for 6 successive weeks and published at least once a week for 6 successive weeks in the City Record and, subject to section 91 of the judiciary law, in 1 newspaper, which may be a law journal, to be designated by the commissioner of finance, which is published in and is circulated throughout the county in which the affected property is located. If there are no newspapers published in such county, the commissioner of finance may designate a newspaper published in the city of New York which is circulated throughout the affected county.
1. Such notice of foreclosure shall clearly indicate that it is a notice of a summary foreclosure action of the tax liens on the property subject to the summary foreclosure action; the borough or the section of a tax map or portion of a section of a tax map in which the property subject to the summary foreclosure action is located, the class of such property, and a brief description of such property, sufficient to identify such property, including the block and lot number, street and street number, or in the absence of such information the parcel or tract identification number shown on a tax map or on a map filed in the county clerk’s or register’s office; where and when the notice of the summary foreclosure action was filed; the general nature of the information contained in such notice; that the filing of the notice of the summary foreclosure action constitutes commencement of a foreclosure action by the city in the supreme court for the particular county and a notice of pendency of action against the property subject to such summary foreclosure action; that such action is against the property only and no personal judgment will be entered; that such notice of the summary foreclosure action will be available for inspection at the borough office of the department of finance in the borough in which said property is located and on the department’s website until a specified date at least 10 weeks after the date of first publication; that until such date such property may be redeemed by any person, other than the owner of such property, claiming to have an interest in such property by paying all taxes and charges contained in such notice of the summary foreclosure action together with interest thereon; that during said period of redemption and for an additional period of 20 days after said last date for redemption any person, other than the owner of the property, having an interest in such property may file with the appropriate county clerk and serve upon the corporation counsel a verified answer setting forth in detail the full name of said answering party, the nature and amount of their interest or lien and any legal defense against foreclosure; and that in the absence of redemption or answer a judgment of foreclosure may be taken by default.
2. The commissioner of finance shall cause a copy of such notice of foreclosure to be posted in the office of the commissioner of finance, in the county courthouse of the county in which the property subject to the summary foreclosure action is situated and at 3 other conspicuous places in the borough in which the affected property is located.
f. Redemption.
1. After the filing of a notice of the summary foreclosure action and until a date at least 10 weeks after the first publication of the public notice of foreclosure, as determined by the commissioner of finance and specified in the said notice, a person, other than the owner of the property, claiming to have an interest in such property may redeem it by paying all taxes and charges contained in said notice of foreclosure together with interest thereon.
2. Upon such redemption the commissioner of finance shall deliver to the corporation counsel a certificate of redemption. The corporation counsel shall file such certificate with the clerk of the county in which said notice of the summary foreclosure action was filed. The filing of such certificate shall constitute and be deemed a discontinuance of the summary foreclosure action, and the county clerk shall thereupon note such redemption and discontinuance in the copy of such notice of the summary foreclosure action maintained by such clerk adjacent to the county clerk's block index of notices of pendency of action and shall cancel and discharge any notations of the filing of such notice of the summary foreclosure action that may appear in any other books, records, indices and dockets maintained in said clerk's office. The commissioner of finance shall also deliver a duplicate original certificate of redemption to the person who has redeemed.
3. When the time to redeem in the summary foreclosure action has expired, any person, other than the owner of the property, claiming to have an interest in the property included in said action shall have the right to make a late redemption payment to the commissioner of finance. Such late redemption payment shall consist of all taxes and charges owing on said property and the lawful interest thereon to the date of payment. Such late redemption payment shall be made in cash, by certified check, or by another means authorized by rule of the department and shall be accepted by the commissioner of finance at any time after the last day to redeem up to the date on which the commissioner is advised by the corporation counsel that the preparation of the judgment of foreclosure in the summary foreclosure action has been commenced. Upon receipt of such late redemption payment, the commissioner of finance shall issue a certificate of discontinuance of the summary foreclosure action pursuant to the provisions of section 11-412.6.
g. Stay where answer is interposed; installment agreements authorized. If a duly verified answer is served upon the corporation counsel by any interested party, other than the owner, not later than 20 days after the last date for redemption, such party shall have the right to a stay of the summary foreclosure action upon written demand therefor filed with or made a part of such answer. The corporation counsel shall have a right to a stay of such action upon written demand to the owner of the property that is the subject of the summary foreclosure action and to the answering party and filed with the court.
1. When such answer is interposed, the court shall summarily hear and determine the issues raised by the complaint and answer in the manner as it hears and determines other actions, except as otherwise provided herein. Proof that the taxes which made said property subject to the summary foreclosure action hereunder together with interest thereon, were paid before filing of the summary foreclosure action or that the property was not subject to tax shall constitute a complete defense.
2. No counterclaim may be asserted in an answer interposed in an action brought pursuant to this section. Where a counterclaim is asserted in an answer brought pursuant to this subdivision, the city may disregard that portion of the answer and shall suffer no legal penalty or impediment in the prosecution of its summary foreclosure action for its failure to reply or respond thereto. Where an answer contains only a counterclaim and no other defenses the city may proceed with the summary foreclosure action without the need for moving against the answer.
3. Where a verified answer alleges a substantial equity over the city’s lien for taxes, the interested party who has interposed such answer may demand additional time in which to pay the taxes and interest or to have the property sold with all taxes and interest to be paid out of the proceeds of such sale. Upon such demand such interested party shall have the right to an extension of time for such purpose not in excess of 6 months from the last day to interpose an answer. Where a mortgagee or lienor who has interposed such answer commences a proceeding to foreclose their mortgage or lien and it appears that with due diligence such proceeding cannot be concluded in time to allow the payment of taxes within the aforesaid 6 month period, the court may, on application before the end of said 6 month period, authorize an additional period during which such proceeding may be concluded and the taxes, together with interest, paid.
4. Where an answer of the type described in paragraph 3 of this subdivision is interposed and taxes are paid within the period set forth in such paragraph, the commissioner of finance shall issue a certificate of discontinuance as to the property on which such payment has been made pursuant to the provisions of section 11-412.6. When taxes are not paid within the period set forth in such paragraph 3, it shall be deemed that there was no equity over the city’s tax lien and the answer shall be deemed to be without merit. The city in that event may proceed with the summary foreclosure action without moving against the answer interposed by the interested party.
5. All answers interposed in a summary foreclosure action and all affidavits and other papers pertaining to any litigation involving such answers or to any proceeding brought pursuant to this section shall bear a caption containing the number of the summary foreclosure action, the borough section of a tax map or portion of a section of a tax map affected, and the section, block and lot numbers of the parcel or parcels in issue.
6. Any interested party, other than the owner, who has interposed an answer as to the summary foreclosure action, or any other party interested in such property, shall have the right, at any time prior to the final disposition of a motion to strike such answer, to pay all taxes, assessments and other legal charges and interest owing on such property. Where all delinquent taxes, assessments and other legal charges together with lawful interest thereon, where required, are paid, the commissioner of finance shall issue a certificate of discontinuance as to such property pursuant to the provisions of section 11-412.6. Such party may also pay such taxes, assessments and other legal charges and interest by an installment agreement. The terms of such agreement shall be consistent with the provisions of subparagraphs (a) and (b) of this paragraph. The request of an answering party for an installment agreement shall constitute a withdrawal of such party’s answer. An installment agreement requested by an interested party other than the answering party shall require the consent of said answering party which shall also constitute a withdrawal of such party’s answer. The stay provided for in subparagraph (c) of this paragraph shall be continued during the term of all installment agreements entered into pursuant to this paragraph. Where a default has occurred as to a property that was the subject of a summary foreclosure action which has been stayed pursuant to subparagraph (c) of this paragraph, the corporation counsel shall cause to be entered a supplemental judgment of foreclosure as to such property immediately on notification by the commissioner of finance of such default. Where such installment agreement is paid in full, the commissioner of finance shall discontinue the summary foreclosure action by issuing a certificate of discontinuance pursuant to the provisions of section 11-412.6.
(a) The first installment of an installment agreement entered into pursuant to this paragraph shall be paid upon the filing of the installment agreement with the commissioner and shall be in an amount equal to not less than fifteen percent of the total amount of the delinquent taxes, assessments or other legal charges and interest. The remaining installments shall be payable quarterly on the first day of July, October, January and April over a period that shall not exceed ten years.
(b) As a condition of entering into any agreement under this paragraph or under paragraph 4 of subdivision j of this section, the commissioner shall have received from the party requesting to pay such taxes, assessments and other legal charges and interest by an installment agreement an affidavit stating that each tenant located on the property has been notified by certified mail that an application for an installment agreement will be made and that a copy of a standard agreement form has been included with such notification. Any false statement in such affidavit shall not be grounds to cancel the agreement or affect its validity in any way.
(c) The corporation counsel shall have the right to a stay of the summary foreclosure action as to any property as to which, before the final judgment authorizing the award of possession of such property was entered, pursuant to subdivision j of this section, an agreement was duly made, executed and filed by any interested party, other than the owner, with the commissioner of finance for the payment of the delinquent taxes, assessments or other legal charges and interest thereon, in installments.
h. Preference over other actions.
1. Any summary foreclosure action brought pursuant to section 11-412.5 shall be given preference over all other causes and actions arising pursuant to state or local law.
2. Actions brought pursuant to section 11-412.5 shall take precedence over any proceeding brought to foreclose a mortgage or other lien involving the same property. A property described in a notice of summary foreclosure action which is sold in a mortgage foreclosure sale held after such notice is filed may not be sold subject to taxes even if judgment has not yet been entered in the summary foreclosure action. All unpaid taxes and interest thereon must be paid, in full or by installment agreement pursuant to the provisions of this section, out of the proceeds of such sale regardless of whether the mortgage foreclosure lis pendens was filed before or after the filing of the notice of summary foreclosure action, regardless of whether any party to the mortgage foreclosure proceeding has interposed an answer in the summary foreclosure action and regardless of any terms to the contrary in the judgment in the mortgage foreclosure proceeding.
i. Presumption of validity. It shall not be necessary for the city to plead or prove the various steps, procedures and notices for the assessment and levy of the taxes, assessments or other lawful charges against the property and all such taxes, assessments or other lawful charges and the lien thereof shall be presumed to be valid. A defendant alleging any jurisdictional defect or invalidity in such taxes, assessments or other lawful charges or in the foreclosure thereof must particularly specify in his or her answer such jurisdictional defect or invalidity and must affirmatively establish such defense. A judgment of foreclosure granted in the summary foreclosure action brought pursuant to this section, which contains recitals that any acts were done or proceedings had which were necessary to give the court jurisdiction or power to grant such judgment of foreclosure, shall be presumptive evidence that such acts were duly performed or proceedings duly had, if such judgment of foreclosure shall have been duly entered or filed in the office of the clerk of the county in which the action was pending and wherein such judgment was granted. The provisions of this section shall apply to and be valid and effective with respect to all defendants even though one or more of them be infants, incompetents, absentees or non-residents of the state of New York.
j. Final judgment and release of property in exceptional circumstances. Notwithstanding any other provision of law to the contrary:
2. The court shall make a final judgment authorizing the award of possession of the property not redeemed as provided in this section and as to which no answer is interposed as provided herein, and authorizing the commissioner of finance to prepare, execute and cause to be recorded a deed conveying full and complete title to the qualified preservation purchaser that committed to lease such property to the tenant upon the delivery of such deed to such qualified preservation purchaser. Any such conveyance to a qualified preservation purchaser shall be for an existing use.
3. Following the expiration of the 4-month period prescribed in paragraph 4 of this subdivision, but not more than 8 months after the date on which, pursuant to paragraph 2 of this subdivision, the final judgment authorizing the award of possession of the property was entered, the commissioner of finance may execute a deed, pursuant to paragraph 2 of this subdivision, with respect to such property. The owner of said property shall continue to have all of the rights, liabilities, responsibilities, duties and obligations of an owner of such property, including, but not limited to, maintaining such property in compliance with the housing maintenance, building and fire codes, and all other applicable laws, unless and until the commissioner of finance has prepared and executed a deed conveying to the qualified preservation purchaser full and complete title to such property. Upon the execution of such deed, the qualified preservation purchaser shall be seized of an estate in fee simple absolute in such land and all persons, including the state of New York, infants, incompetents, absentees and non-residents who may have had any right, title, interest, claim, lien or equity of redemption in or upon such lands shall be barred and forever foreclosed of all such right, title, interest, claim, lien or equity of redemption. The appointment and tenure of receivers, trustees or any other persons, including administrators under article 7-A of the real property actions and proceedings law, appointed by an order of a court to manage real property, shall terminate when title to such property vests in the qualified preservation purchaser pursuant to the provisions of this section. After such termination, said receivers, trustees or administrators shall be accountable to the courts that appointed them for the faithful performance of their fiduciary obligations during the term of their appointment and to the qualified preservation purchaser for any rents and income received by them for any period subsequent to the date of the vesting of title in such qualified preservation purchaser.
4. Within 4 months after the date on which, pursuant to paragraph 2 of this subdivision, the final judgment authorizing the award of possession of the property was entered, any person, other than the owner, claiming to have an interest in such property shall have the right to make a payment to the commissioner of finance consisting of all taxes, assessments and other legal charges owing on said property, and the lawful interest thereon to the date of payment. Such payment shall be made in cash, by certified check, or by another means authorized by rule by the department. Within such 4 month period, such interested person may also request an installment agreement from the commissioner of finance. Such agreement shall require the payment at such time of a first installment equal to fifty percent of all taxes, assessments and other legal charges, and the lawful interest thereon, then owing on such property, and the payment of the balance of such taxes, assessments and other legal charges and interest in 4 equal quarterly installments together with all current taxes, assessments and other legal charges that accrue during such period. Upon receipt of payment in full of the amount specified in the first sentence of this paragraph, the commissioner of finance shall direct the corporation counsel to prepare and cause to be entered an order discontinuing the summary foreclosure action as to said property, cancelling the notice of pendency of such action as to said property and vacating and setting aside the final judgment. Upon the execution of an installment agreement and payment of the amounts due at the time such agreement is executed as provided in this paragraph, the commissioner of finance shall direct the corporation counsel to prepare and cause to be entered an order vacating and setting aside the final judgment. The entry of either such order shall restore all parties, including owners, mortgagees and any and all lienors, receivers and administrators and encumbrancers, to the status they held immediately before such final judgment was entered. Where the commissioner of finance approves an application requesting an installment agreement pursuant to this paragraph, the order vacating and setting aside the final judgment shall provide that in the event of any default as to the payment of either quarterly installments or current taxes, assessments or other legal charges during the term of such agreement, the corporation counsel, immediately upon notification by the commissioner of finance of such default, shall cause to be entered as to such property a supplemental judgment of foreclosure in the summary foreclosure action which authorizes the commissioner of finance to prepare, execute and cause to be recorded a deed conveying to the qualified preservation purchaser full and complete title to such lands. Upon the entry of such supplemental judgment, the provisions of paragraph 3 of this subdivision, this paragraph, and subdivisions k and l of this section shall apply in the same manner as such paragraphs and such subdivisions would have applied had no payment been made nor installment agreement executed during the 4-month period specified in this subdivision.
k. Every judgment entered pursuant to the provisions of this section shall be presumptive evidence that the action and all proceedings therein and all proceedings prior thereto from and including the assessment of the lands affected and all notices required by law were regular and in accordance with all provisions of law relating thereto. After 4 months from the date of entry of the final judgment authorizing the award of possession of the property pursuant to the provisions of this section, the presumption shall be conclusive. No action to vacate such judgment, or set aside a deed given pursuant to such judgment, may be maintained unless the action is commenced and a notice of pendency of the action is filed in the office of the proper county clerk prior to the time that the presumption becomes conclusive as aforesaid. Should a qualified preservation purchaser to whom the property has been conveyed pursuant to this section receive notice of a lawsuit or proceeding to vacate a judgment or set aside a deed, such qualified preservation purchaser shall send to the corporation counsel within 10 days of their receipt a copy of any papers served on such qualified preservation purchaser in such lawsuit or proceeding.
l. If the commissioner of finance does not execute a deed conveying to the qualified preservation purchaser the property within 8 months after the entry of final judgment authorizing the award of possession of such property pursuant to paragraph 2 of subdivision j of this section, the commissioner of finance shall direct the corporation counsel to prepare and cause to be entered an order discontinuing the summary foreclosure action as to said property, canceling the notice of pendency of such action as to said property and vacating and setting aside said final judgment. The entry of such order shall restore all parties, including owners, mortgagees and any and all lienors, receivers and administrators and encumbrancers, to the status they held immediately before such final judgment was entered.
m. The validity of any proceeding hereunder shall not be affected by any omission or error of the commissioner of finance in the designation of a street or street number or by any other similar omission or error.
(L.L. 2024/082, 7/30/2024, eff. 10/28/2024)
Editor's note: For related unconsolidated provisions, see Appendix A at L.L. 2024/082.