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New York

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New York — Tax & Mortgage Foreclosure

Legal information, not legal advice. Verify against the cited primary sources before acting. Last verified: 2026-06-02.

New York is the structurally unusual case in the post-tyler-v-hennepin-county landscape: from 1995 until 2024 its Real Property Tax Law (RPTL) Article 11 in rem tax-foreclosure scheme gave the foreclosing tax district fee simple absolute in the parcel — including 100% of any equity above the tax debt, with no surplus distribution at all. Tyler v. Hennepin County (2023) rendered that unconstitutional, and New York rewrote Article 11 in 2024 (L.2024, ch.55, pt.BB), adding a brand-new Title 6 — Distribution of Surplus (RPTL §§ 1196–1197), retroactive to Tyler’s decision date of May 25, 2023. Surplus practice in New York is therefore very new and still being litigated.

0. Identity & Classification

  • Recording unit: county (62 counties; New York City’s five counties/boroughs enforce under their own NYC Administrative Code in rem scheme rather than RPTL Art. 11). Count: 62 counties.
  • Tax sale type: Tax deed via in rem foreclosure (not a lien-certificate state in the Florida/Arizona sense). The county/tax district forecloses the tax lien in a judicial in rem proceeding and the property is then deeded or sold; some counties also conduct tax-lien sales by local law (e.g., NYC sells liens to a trust). Classify as tax_deed with judicial in rem process.
  • Tax foreclosure process: judicial (in rem) under RPTL Art. 11, Title 3 (§§ 1120–1137). RPTL Art. 11
  • Mortgage foreclosure process: judicial only (New York has no power-of-sale / non-judicial mortgage foreclosure). RPAPL Art. 13. RPAPL Art. 13
  • Selling authority: the enforcing officer of the tax district (typically the county treasurer / commissioner of finance; in some jurisdictions the county attorney prosecutes the proceeding).
  • Statutory home: RPTL Article 11 (§§ 1100–1198) — Procedures for Enforcement of Collection of Delinquent Taxes. Justia: RPTL Art. 11
  • Tyler v. Hennepin compliance: reformed_post_Tyler. The pre-2024 scheme (district keeps all surplus) was non-compliant; L.2024, ch.55, pt.BB added RPTL §§ 1196–1197 creating a surplus determination and claim process, retroactive to May 25, 2023. Phillips Lytle review

1. Tax Sale Mechanics

  • What is sold: the parcel itself, by deed, after an in rem judgment of foreclosure (RPTL § 1136). Pre-2024 the district simply took title; post-reform a district may take title, sell at public auction, transfer to a third party, or convey back to the former owner on payment of arrears. RPTL Title 3
  • Bidding method: where a public auction is held, highest-bid deed (premium bidding); there is no statewide bid-down-interest mechanic because the lien itself is not auctioned in the Art. 11 scheme.
  • Interest / penalty on delinquency: 1% per month (≈12% per annum) under RPTL § 924-a, the default statewide rate “for each month or fraction thereof until such taxes are paid”; unchanged since 1983. Some special districts/cities set their own rates outside § 924-a. NY Tax Dept § 924-a · RPTL § 924-a
  • Minimum bid composition: the total of delinquent taxes, accrued interest at the § 924-a rate, penalties, and other charges as defined by RPTL § 1102.
  • Sale frequency / typical month: varies by county; the enforcing officer executes the petition of foreclosure 21 months after lien date (33 or 45 months for parcels with extended 3- or 4-year redemption periods) under RPTL § 1123, with sale after judgment. No single statewide auction month. RPTL § 1123
  • Venue: both in-person and online, by county.
  • Platform vendors: varies by county (commonly Auctions International and similar vendors for upstate counties). County-specific — see county pages.
  • Registration / deposit: set by the county conducting the auction.
  • Subsequent taxes (“subs”): not applicable in lien-certificate form; ongoing taxes continue to accrue against the parcel until the in rem judgment.

2. Right of Redemption → see right-of-redemption

  • Pre-sale / pre-judgment right: Yes. Under RPTL § 1110, real property subject to a delinquent tax lien may be redeemed by paying the enforcing officer the full delinquent lien plus all charges authorized by law, on or before the expiration of the redemption period. RPTL § 1110
  • Redemption period: two (2) years after lien date by default (RPTL § 1110). A tax district may extend the period for residential or farm property (§ 1111), or reduce it to one (1) year for residential vacant-and-abandoned property placed on a vacant/abandoned registry before the taxes became delinquent (§ 1111-a). If the § 1124 published notice specifies a later expiration date, that later date controls. RPTL § 1110
  • Who may redeem: any person with a right, title, interest, or equity of redemption in the parcel (owner, lienholder, mortgagee) — RPTL § 1110.
  • Amount formula: delinquent tax lien(s) + § 924-a interest + penalties + lawful charges (RPTL §§ 1110, 1102).
  • Premium to certificate holder: N/A (deed/in rem scheme; no certificate investor in the Art. 11 model).
  • Procedure: pay the enforcing officer; on a parcel listed under § 1122 the officer issues a certificate of redemption that is filed with the county clerk (RPTL § 1110).
  • Extinguishment: failure to redeem or answer by the redemption deadline bars and forecloses all right, title, interest and equity of redemption, and a judgment of foreclosure may be taken by default (RPTL § 1131). A motion to reopen a default may not be brought later than one month after entry of judgment. RPTL § 1131
  • Special tolling: redemption-period extensions for residential/farm property (§ 1111). General tolling for minors/incompetents and federal stays (bankruptcy-automatic-stay, scra-protections) — see needs_verification.

3. Surplus / Excess Proceeds → see surplus-funds, third-party-recovery-rules

  • Belongs to: priority waterfall (post-reform). Surplus is adjudicated and distributed “in the same manner as in an action to foreclose a mortgage” under RPAPL Article 13, so former owner equity is paid after senior liens. Before the 2024 reform, surplus belonged entirely to the tax district. RPTL § 1197
  • Surplus determination: within 45 days after the sale, the enforcing officer must determine whether a surplus exists and its amount — sale proceeds (or, for a non-public sale, full value per the tax roll, a licensed NY appraisal, or another reasonable valuation method) minus taxes + interest + penalties + § 1102 charges (RPTL § 1196). RPTL § 1196 · § 1196 (public.law)
  • Who may claim: any person who had a right, title, interest, claim, lien, or equity of redemption in the parcel immediately prior to the judgment of foreclosure (RPTL § 1197).
  • Filing venue: the court having jurisdiction over the in rem proceeding (the surplus claim is part of, and adjudicated within, the foreclosure proceeding), per RPAPL Art. 13 surplus-money procedure. RPTL § 1197
  • Claim deadline: a written claim may be filed before confirmation of the report of sale; for residential property with unclaimed surplus the proceeding remains open at least three (3) years from confirmation, and a former homeowner who files within that window is treated as timely (RPTL § 1197).
  • Escheat: unclaimed surplus is not remitted to the State Comptroller’s unclaimed-funds office; under RPTL § 1197 it is paid to the tax district and used to reduce its tax levy. (This is the opposite of the usual escheat-to-state rule and is the key reason the APL § 1416 finder cap below does not cleanly apply.)
  • Documentation required: written notice of claim stating the nature and extent of the claim and the claimant’s (or attorney’s) address; proof of pre-judgment interest. See county/court surplus-claim instructions.
  • Notice to former owner required? The 2024 reform created the surplus right but the Seelbach court (below) held there is no constitutional or statutory entitlement to particularized notice of surplus rights beyond ordinary § 1125 foreclosure notice — recourse for more notice is “to the Legislature.”
  • Third-party recovery (surplus-recovery agents):
    • fee_cap_pct: null / unsettled. New York’s only on-point statutory finder cap is Abandoned Property Law § 1416 = 15% of recoverable property — but that statute governs property held by the State Comptroller. RPTL surplus is held in court and (if unclaimed) goes to the tax district, not the Comptroller, so § 1416’s 15% cap does not plainly govern RPTL tax-foreclosure surplus. Flagged in needs_verification. APL § 1416
    • licensing_required: APL § 1416 imposes disclosure/validity rules on “abandoned property location services” for Comptroller-held funds; no separate statewide license is specified there. Applicability to RPTL surplus unsettled.
    • assignment_of_claim_allowed: not specified by RPTL Art. 11; surplus claims are litigated within the foreclosure proceeding under RPAPL Art. 13. Flagged.
    • cooling_off_period: none specified for RPTL surplus.
    • contract_disclosure_rules: for Comptroller-held funds, APL § 1416 requires a 12-point boldface disclosure that funds can be claimed directly without a fee, and voids fees above 15%. APL § 1416
    • prohibited_practices: APL § 1416 voids agreements with excessive/unjust consideration and those lacking required disclosures (Comptroller-held funds).
    • citation: Abandoned Property Law § 1416; RPTL §§ 1196–1197.

▸ For Investors / Operators — New York’s Article 11 in rem scheme conveys the parcel by deed after a judicial judgment of foreclosure; post-2024 reform (RPTL §§ 1196–1197) routes any surplus through the RPAPL Art. 13 priority waterfall, with former-owner equity paid after senior liens. Before committing capital, weigh the redemption risk (§2/2b — the 2-year default § 1110 redemption, extendable for residential/farm property, runs until the deed executes under § 1136), the path to marketable/insurable title (§5b — RPAPL Art. 15 quiet title in Supreme Court vs. the § 1137 two-year conclusive-presumption period and 6-year CPLR 213 seasoning; NY has no Marketable Record Title Act), and which liens survive (§7b — federal tax liens and CERCLA claims if the U.S. was not noticed, NYC ECB liens converted to tax liens, and the IRS § 7425 120-day redemption).

▸ For Former Owners — Surplus practice in New York is new (the 2024 reform added RPTL §§ 1196–1197, retroactive to May 25, 2023). When a parcel sells for more than the taxes, interest, penalties, and § 1102 charges, the surplus is adjudicated within the in rem proceeding under RPAPL Art. 13 and paid to interests that existed before the judgment in priority order; for residential property the proceeding stays open at least three years from confirmation of the sale report (§ 1197). The enforcing officer determines surplus within 45 days of the sale (§ 1196). Note: unclaimed RPTL surplus is paid to the tax district, not the State Comptroller.

4. Mortgage Foreclosure

  • Process: judicial only. New York has no non-judicial/power-of-sale mortgage foreclosure; lenders must bring an RPAPL Article 13 action and obtain a judgment of foreclosure and sale. RPAPL Art. 13
  • One-action / election of remedies: RPAPL § 1301 — a lender may pursue the note or foreclose the mortgage but not simultaneously seek a money judgment and foreclose on the same debt (one-action rule, § 1301(3)). RPAPL § 1301
  • Timeline (days): highly variable (often well over a year given mandatory CPLR 3408 settlement conferences for home loans); no fixed statutory NOD/NOS clock like trustee-sale states. Flagged for precise figures.
  • Reinstatement right: borrowers may generally cure/reinstate before judgment; specific statutory section not separately verified — flagged.
  • Redemption after sale: None. New York recognizes the equity of redemption only up to the foreclosure sale; there is no post-sale statutory redemption period. RPAPL § 1352 (strict foreclosure) fixes/cuts off any remaining equity of redemption of omitted parties. RPAPL § 1352
  • Deficiency judgment: allowed with a mandatory fair-value offset. Under RPAPL § 1371, a deficiency motion must be made within 90 days after the deed delivery, and the deficiency equals the debt (plus prior liens, interest, costs) less the higher of the fair market value (as determined by the court) or the sale price. RPAPL § 1371
  • Surplus distribution: sale proceeds exceeding the judgment are paid into court and distributed via surplus-money proceedings by lien priority (RPAPL §§ 1354, 1361). RPAPL § 1361
  • Sale officer: referee appointed by the court (not a sheriff or trustee).

5. Sale Procedure Playbooks

  • Tax (in rem) sale — ordered steps → see treasurer-sale:
    1. Taxes become delinquent; § 924-a interest accrues at 1%/month.
    2. Redemption period runs (2 yrs default from lien date; § 1110).
    3. Enforcing officer executes the list of delinquent taxes (10 months after lien date; § 1122), then the petition of foreclosure (21 months after lien date — 33/45 months for extended redemption; § 1123), with mailed and published notice of foreclosure (§§ 1124–1125).
    4. Interested parties must redeem or answer by the deadline; default bars all interests (§ 1131).
    5. Judgment of foreclosure awards title/possession (§ 1136); property is sold at public auction or otherwise disposed.
    6. Within 45 days of sale, enforcing officer determines surplus (§ 1196).
    7. Claimants file; surplus distributed by RPAPL Art. 13 priority; residential proceedings stay open ≥3 years (§ 1197). RPTL Title 3
  • Mortgage / referee sale — ordered steps → see sheriff-sale:
    1. Lender files RPAPL Art. 13 complaint + lis pendens; CPLR 3408 settlement conference for home loans.
    2. Judgment of foreclosure and sale; referee appointed.
    3. Notice of sale published; public auction by referee.
    4. Referee distributes per RPAPL § 1354; surplus paid into court (§ 1361).
    5. Deficiency motion within 90 days with fair-value offset (§ 1371).
  • Notice requirements: RPTL §§ 1124–1125 require mailed notice to owners/interested parties of record and published notice; due-process adequacy governed by Mullane, Mennonite, Jones v. Flowers, and NY’s Kennedy v. Mossafa.
  • Upset bid / confirmation: tax in rem sale results are reported and confirmed by the court; surplus determination keyed to the report/confirmation (RPTL §§ 1196–1197).
  • Payment terms: set by the conducting county/court.
  • Deed issued: tax in rem judgment conveys title to the tax district / purchaser (RPTL § 1136); referee’s deed in mortgage foreclosure (RPAPL § 1353).

6. Due Process & Notice → see due-process-notice

  • Standard: notice “reasonably calculated, under all the circumstances, to apprise” interested parties of the proceeding and afford an opportunity to be heard (mullane-v-central-hanover standard, adopted by NY).
  • Required attempts: mailed notice to owners/lienholders of record (RPTL § 1125); where mailed notice is returned, NY requires reasonable additional steps — under Kennedy v. Mossafa (100 N.Y.2d 1 [2003]) and MacNaughton v. Warren County (20 N.Y.3d 252 [2012]) the enforcing officer must, when notice is returned as undeliverable, conduct a reasonable search of the public record (though it need not search the internet, telephone directories, voting/motor-vehicle records, or out-of-county/out-of-state records), consistent with jones-v-flowers. Mortgagees of record whose interests are reasonably ascertainable are entitled to actual (mailed) notice (mennonite-v-adams).
  • Consequence of defective notice: judgment/deed is voidable as to the party denied constitutionally adequate notice (the 2-year SOL to vacate a tax deed does not run against a party who never received due-process notice).
  • Leading cases: kennedy-v-mossafa, macnaughton-v-warren-county, matter-of-foreclosure-of-tax-liens-seelbach-2024, tyler-v-hennepin-county, mullane-v-central-hanover, mennonite-v-adams, jones-v-flowers.

7. Title & Marketability

  • Deed warranty level: tax in rem deed conveys whatever title the judgment vests (no warranties); referee’s deed in mortgage foreclosure likewise conveys without covenants.
  • Marketable immediately? Practically no — title companies typically require the in rem proceeding to be unassailable and often a quiet-title action or the running of the limitations period before insuring.
  • Quiet title required? Frequently, especially where notice to any interested party is questionable.
  • SOL to challenge the tax deed: a referee’s/tax deed becomes conclusive evidence of regularity after a limitations period (the NYSBA practice commentary describes a two-year period to set aside a referee’s deed), but that bar does not run against a party denied due-process notice. Exact RPTL section flagged for verification. NYSBA surplus article
  • Title insurance availability: available but usually only after curative steps (proof of regular service, expiration of challenge period, or quiet title).
  • Common defects: defective/returned-mail notice; omitted necessary parties (cured by RPAPL § 1352 strict foreclosure); unresolved surplus claims post-Tyler.

8. Case Law (real, verified)

CaseYearTopicHolding (plain English)Source
matter-of-foreclosure-of-tax-liens-seelbach-20242024surplus, due_process, tylerNY Supreme Court (trial): the mere pendency of an RPTL Art. 11 foreclosure does not itself risk a Takings violation under Tyler; owners have no constitutional or statutory entitlement to particularized notice of surplus rights beyond ordinary foreclosure notice — recourse for more notice is to the Legislature. (2024 NY Slip Op 24216)https://www.nycourts.gov/Reporter/3dseries/2024/2024_24216.htm
kennedy-v-mossafa2003due_process, sale_procedureCourt of Appeals: due process requires notice reasonably calculated to apprise the owner; the enforcing officer’s duty is not always satisfied by mailing to the tax-roll address — when mailed notice is returned undeliverable, the district must generally conduct a reasonable search of the public record, though on the facts (mail returned “unclaimed,” correct address) no further search was required and it need not hunt down a missing taxpayer. (100 N.Y.2d 1)https://nysba.org/due-process-and-due-diligence-claiming-surplus-in-new-yorks-in-rem-tax-foreclosures/
macnaughton-v-warren-county2012due_process, sale_procedureCourt of Appeals: where mailed notice to the property owners was returned undeliverable, the tax district must take reasonable additional steps — a reasonable search of its own public records — but need not search out-of-county/out-of-state or attempt personal service; on these facts the county satisfied due process. Refined the Kennedy v. Mossafa “reasonable search” duty. (20 N.Y.3d 252; 2012 NY Slip Op 08442)https://www.nycourts.gov/Reporter/3dseries/2012/2012_08442.htm
tyler-v-hennepin-county2023surplus, tylerU.S. Supreme Court: retaining surplus equity beyond the tax debt after a tax foreclosure is an unconstitutional taking; the owner must have an opportunity to recover the excess. Drove NY’s 2024 RPTL Art. 11 reform. (598 U.S. 631)https://phillipslytle.com/a-review-of-new-yorks-response-to-tyler-v-hennepin-county/

9. Edge Cases (state-specific notes)

  • bankruptcy-automatic-stay — A Chapter 13 filing before the redemption deadline can preserve/cure delinquent taxes; the automatic stay tolls the in rem proceeding. NY-specific tolling interaction with RPTL § 1110 deadline flagged for verification.
  • federal-tax-lien-redemption — The IRS retains a 120-day right of redemption under 26 U.S.C. § 7425 when a federal tax lien is junior and the U.S. is properly noticed; applies to NY tax/mortgage sales alike (federal law).
  • heirs-property — Co-owned/inherited parcels: each heir with an interest may redeem (RPTL § 1110) and claim a pro-rata share of any § 1197 surplus.
  • mortgagee-notice — Mortgagees of record whose interests are reasonably ascertainable must receive actual (mailed) notice (mennonite-v-adams); the NY return-mail duty to make a reasonable record search runs to all parties of record (Kennedy v. Mossafa; MacNaughton v. Warren County).
  • void-vs-voidable — NY treats a deed obtained without due-process notice as voidable by the un-noticed party notwithstanding the deed-challenge limitations period (Kennedy v. Mossafa line).
  • HOA super-priority / manufactured homes / SCRA — not separately verified for NY; flagged.

10. Operations

2b. Redemption Advanced

Assignability of the Redemption Right

  • Assignable: Yes — in New York’s in rem scheme the right to redeem belongs to “any person having or claiming to have an interest” in the parcel (RPTL § 1110; every such person “may redeem such parcel”). Because the statute is not restricted to the record owner, redemption rights may be exercised by, or transferred to, any party holding a legally cognizable interest (e.g., lienholders, mortgagees, heirs). There is no express statutory prohibition on assignment; however, there is also no express statutory mechanism for a bare assignment of the bare redemption right to a third party who holds no prior interest. In practice, a third party who wishes to acquire the redemption right typically does so by taking an assignment of a mortgage or other interest in the parcel first.
  • Restrictions: No express “heirs and mortgagees only” limitation; any person with right, title, interest, or equity of redemption may redeem (RPTL § 1110). RPTL § 1194 (Title 5 tax-lien-sale track) expressly recognizes “successors or assigns” of a tax-lien purchaser. RPTL § 1110 · RPTL § 1194
  • Purchase mechanism: Assignment of an interest (mortgage, judgment lien, etc.) in the parcel before redemption deadline, then exercise of redemption in the assignee’s own name. No specific deed-of-assignment form is prescribed by RPTL Article 11.
  • Statute / case: RPTL § 1110; RPTL § 1194(1) (“the purchaser of a delinquent tax lien, or its successors or assigns, may foreclose the lien”). RPTL § 1194

Equitable Redemption vs. Statutory Redemption

  • Distinct from statutory? In New York’s in rem scheme, the distinction largely collapses: the statutory redemption under RPTL § 1110 runs until entry of the final judgment (and technically until execution of the deed — property rights are “finally foreclosed only when the enforcing officer executes a deed,” per tax counsel authority and RPTL § 1136). The equity of redemption as a common-law concept is subsumed by the statutory scheme and is co-extensive with it.
  • Available pre-sale only: Yes. There is no post-sale statutory redemption period in New York in rem tax foreclosure (contrast Title 5 lien-sale foreclosures under § 1194, which follow mortgage-foreclosure procedures including post-sale redemption equivalent). RPAPL mortgage foreclosures similarly extinguish the equity of redemption at the sale; see Module 4.
  • Notes: RPTL § 1131 bars all right, title, interest, and equity of redemption upon a default judgment; RPTL § 1136 bars all interests upon execution of the deed. A party denied constitutionally adequate notice may still hold a claim notwithstanding the deed (Kennedy v. Mossafa / MacNaughton line).

Installment Redemption

  • Permitted? Not generally under RPTL Article 11. The statute contemplates a lump-sum payment of all delinquent liens + interest + charges (RPTL § 1110). Tax districts may enter payment agreements before the petition is filed (pre-petition informal repayment), but once a petition of foreclosure is executed the enforcing officer may permit only full redemption. Specific installment-redemption statute not located — flagged needs_verification.

Assignment of Tax Certificate / Deed Mid-Period

  • Permitted? Yes. RPTL § 1194(1) explicitly authorizes the “purchaser of a delinquent tax lien, or its successors or assigns” to foreclose the lien. This confirms that a tax-lien certificate (Title 5 track) is freely assignable during the redemption period. The in rem deed issued under Title 3 by the tax district may likewise be conveyed; RPTL § 1136 imposes no restriction on the district’s subsequent alienation of acquired fee title.
  • Restrictions: None stated; standard real-property assignment/conveyance rules apply.
  • Statute: RPTL § 1194(1). RPTL § 1194

3b. Surplus Advanced

Claim Assignability

  • Full assignment permitted? RPTL §§ 1196–1197 do not expressly authorize or prohibit full assignment of a surplus claim. Surplus claims are litigated as part of the in rem foreclosure proceeding under RPAPL Article 13 surplus-money procedures. Because surplus claims are judicial claims filed within an ongoing court proceeding, a bare assignment of the right to collect surplus to a third party is legally uncertain — the more common and defensible structure is a contingency-fee agreement rather than an outright assignment of the claim itself. Flagged needs_verification.
  • Assignment vs. fee agreement: The operative distinction in New York is whether the claimant assigns the claim outright (transferring standing) vs. retaining standing and engaging a recovery agent on a contingency. The latter is clearly permissible; the former raises champerty concerns under Judiciary Law § 489 (assignment of claims to “exact usurious interest” or for profit in litigation is a misdemeanor and voids the contract). Whether Judiciary Law § 489 bars outright assignment of an RPTL surplus claim is not settled by retrieved case law — flagged needs_verification. NY Judiciary Law § 489
  • Fee cap applies to assignments? RPTL §§ 1196–1197 impose no fee cap. APL § 1416’s 15% cap applies only to Comptroller-held abandoned property, not RPTL surplus held in court (see Module 3, needs_verification). Flagged.
  • Statute: RPTL §§ 1196–1197; APL § 1416; Judiciary Law § 489.

Statute of Limitations

  • Period: For residential property the proceeding remains open at least three years from confirmation of the sale report (RPTL § 1197); a former homeowner filing within that window is timely. For non-residential property, the statute is less clear. The NYSBA has noted there is “no apparent statute of limitations for asserting claims to a surplus, specifically when alleging due-process violations.” RPTL § 1197
  • Trigger: Date of confirmation of the report of sale (RPTL § 1197 refers to the confirmation of the sale report).
  • Citation: RPTL § 1197; NYSBA, “Due Process and Due Diligence,” retrieved 2026-06-02. NYSBA article

Competing Claimant Procedure

  • Filing race? No — RPTL § 1197 incorporates RPAPL Article 13 surplus-money procedures, which use a judicial referee model: the court appoints a Surplus Moneys Referee who takes evidence of all claims, ascertains the amount due to each claimant, and reports lien priorities.
  • Interpleader used? Not formally; the surplus fund is deposited with the court and the court distributes via the referee’s report mechanism (RPAPL § 1361). Competing claimants argue their priority before the referee.
  • Priority rules: Interests that existed before the sale attach to the surplus in the same priority order as they existed against the land (RPAPL § 1361). Former owner equity is paid last, after all senior lienholders.
  • Citation: RPTL § 1197; RPAPL § 1361. RPAPL § 1361

Deceased Owner Procedure

  • Probate required first? Under RPAPL Article 13 surplus-money procedure (incorporated by RPTL § 1197), if the property belonged to a decedent, surplus funds must be directed to Surrogate’s Court if: (a) fewer than 18 months have elapsed since letters testamentary/administration issued, (b) settlement proceedings commenced within 18 months and remain pending, or (c) no letters issued and fewer than two years have passed since death. In that scenario the Surrogate administers the surplus as part of the estate.
  • Personal representative has standing: Yes, once letters testamentary or of administration are issued.
  • Direct heir claim permitted? Only if letters have issued or no estate proceedings are pending and two-plus years have elapsed since death.
  • Notes: Source is RPAPL Art. 13 surplus-money procedure as incorporated by RPTL § 1197. See also RPAPL § 1361. RPAPL § 1361 (courtstreetlaw analysis)

Fraudulent Conveyance Exposure

  • Assignment voidable by creditors? Yes. If a property owner assigns their surplus claim (or any interest in the surplus) while insolvent or with intent to hinder creditors, the assignment is voidable under New York’s Uniform Voidable Transactions Act (UVTA), Debtor & Creditor Law Article 10 (effective April 4, 2020 for transfers on/after that date).
  • Applicable statute: NY Debtor & Creditor Law Article 10 (UVTA), effective April 4, 2020 (L.2019, ch. 580). For transfers before April 4, 2020: former Uniform Fraudulent Conveyance Act.
  • SOL for UVTA claims: Constructive fraud — 4 years from transfer; actual fraud — 1 year from discovery (UVTA § 278). Pre-April 2020 transfers: 6-year SOL. UVTA alert (Olshan)
  • Notes: A surplus-claim assignment made when the owner is insolvent and for less than reasonably equivalent value is a classic constructive-fraud voidable transfer under UVTA § 274.

Surplus Claimant Notice

  • Court must notify lienholders? The Seelbach (2024) court held there is no constitutional or statutory entitlement to particularized notice of surplus rights beyond ordinary § 1125 foreclosure notice. RPTL § 1196 requires the enforcing officer to notify the former owner within 10 days of filing the surplus-determination report with the court. RPTL § 1196
  • Method: Written notice; § 1196 does not specify the form of the 10-day owner notice beyond “notification.”
  • Timeline: Within 10 days of filing the surplus-determination report with the court (RPTL § 1196).
  • Citation: RPTL § 1196; Matter of Foreclosure of Tax Liens (Seelbach), 2024 NY Slip Op 24216.

5b. Title Advanced

Quiet Title

  • When required: Recommended after every tax in rem sale; effectively required before any sophisticated buyer or title insurer will accept the title without a waiting period. Specifically needed where: notice to any interested party was questionable; the in rem deed was recently issued (within the two-year challenge window under RPTL § 1137); any lien or mortgage was not clearly extinguished.
  • Action type: Judicial — under RPAPL Article 15 (“Action to Compel the Determination of a Claim to Real Property”), filed as a plenary action. RPAPL Art. 15
  • Court with jurisdiction: New York Supreme Court (county-level court of general jurisdiction). The action is filed in the Supreme Court in the county where the property is located.
  • Typical timeline: Uncontested: 60–120 days (some sources say 3–4 months); contested: 6 months to over a year. If publication-service is required (unknown defendants), add 6–8 weeks for the publication run. LegalClarity quiet title guide
  • Typical cost range: Legal fees typically $3,000–$10,000+ for uncontested actions; more for contested. Filing fees: Supreme Court index fee ~$210; additional per-county costs apply.
  • Cures all pre-sale defects? A judgment quieting title under RPAPL Article 15 eliminates competing claims and “clouds on title” as of the date of judgment. It does not retroactively cure a void deed (one obtained without any constitutional notice), but it is the practical mechanism to adjudicate and resolve all adverse claimants.
  • Citation: RPAPL Article 15 (§§ 1501 et seq.); RPTL § 1137 (two-year challenge period / conclusive presumption for in rem deed). RPTL § 1137

Deed Seasoning

  • Insurers require seasoning? Yes — as a practical matter, most title insurance underwriters require either (a) a quiet title action, or (b) the expiration of the six-year CPLR 213(4) limitations period for actions on instruments affecting title (some practitioners also reference RPTL § 1137’s two-year conclusive-presumption period as a minimum). LegalClarity: “title insurance companies often refuse to insure tax deed properties until a quiet title action is completed or six years have passed”
  • Typical years: 2 years (RPTL § 1137 conclusive presumption) to 6 years (CPLR 213), depending on the insurer’s underwriting appetite.
  • Rationale: Void-deed risk (party denied due-process notice may still challenge beyond the limitations period); post-Tyler uncertainty around surplus claims (new 2024 regime, still litigated); omitted-party risk.

Title Insurance

  • Immediate availability? No — title insurers typically decline to insure immediately after a tax in rem sale.
  • Conditions for immediate: Acceptable immediately only with a completed quiet title action (RPAPL Art. 15 judgment) or, in some underwriters’ practice, after the RPTL § 1137 two-year presumption period has run with no challenge filed.
  • Insurers known to write: Fidelity National Title, First American, Stewart, Old Republic — all insure NY tax-deed titles after curative steps; specific underwriting guidelines vary by office. Specific underwriter list needs_verification.
  • Quitclaim or special warranty only? The in rem deed issued under RPTL § 1136 conveys title without express covenants (no warranty); however a RPAPL Art. 15 quiet title judgment enables the grant of a full-covenant deed by a subsequent grantor.

Marketable Title Act

Judicial Confirmation

  • Required before deed issues? Under the in rem scheme (RPTL Art. 11 Title 3), the court enters a final judgment of foreclosure (RPTL § 1136) which is itself a judicial order — this functions as judicial confirmation of the foreclosure. No separate confirmation hearing is required before the enforcing officer executes the deed under the judgment. In mortgage foreclosure under RPAPL Art. 13, the referee’s sale proceeds after judgment of foreclosure and sale, with the referee’s report confirmed by the court before any surplus is distributed (RPAPL § 1361).
  • Tribunal: Supreme Court (same court handling the in rem proceeding).
  • Timeline: Built into the in rem judgment process; no separate confirmation window.
  • Citation: RPTL § 1136; RPAPL § 1361. RPTL § 1136

Chain of Title Cure

  • Depth: The in rem judgment and resulting deed, once unreviewable, extinguishes all prior liens, interests, and claims that were parties to (or properly noticed into) the proceeding — i.e., all pre-lien defects that were the subject of the foreclosure. Claims by parties who were denied due-process notice are not cut off.
  • Notes: Mechanic’s liens, judgment liens, and junior mortgages that were named/noticed in the proceeding are extinguished. IRS liens (federal tax liens) and CERCLA/environmental liens are subject to federal law and are not automatically extinguished — see Module 7b.

5c. TRO & Injunctive Relief

Recognized Grounds to Halt a Tax or Mortgage Foreclosure Sale

New York courts recognize the following grounds for emergency injunctive relief to halt a foreclosure sale:

  • Defective / constitutional notice defect — failure to serve the owner or a mortgagee of record with constitutionally adequate notice (most common ground; Kennedy v. Mossafa line).
  • Payment dispute / redemption tender — claimant can demonstrate they tendered the full redemption amount before the deadline.
  • Bankruptcy automatic stay — filing of a voluntary or involuntary petition under Title 11 immediately stays foreclosure proceedings (28 U.S.C. § 362); no TRO application needed once stay is in place.
  • Servicemembers Civil Relief Act (SCRA) — active-duty military members entitled to stay of proceedings.
  • Constitutional/equity claim — e.g., Tyler v. Hennepin County surplus equity taking argument raised in ongoing proceeding.
  • Fraud or irregularity in the proceeding — motion to vacate default judgment and stay sale (CPLR 5015).

New York CPLR Article 63 governs. The movant must demonstrate (with clear and convincing evidence):

  1. Likelihood of success on the merits;
  2. Irreparable injury absent the injunction; and
  3. Balance of equities favoring relief. (CPLR § 6301 — grounds for preliminary injunction and TRO.) CPLR § 6301 (Justia)

Court with Jurisdiction

New York Supreme Court (county where property is located). The typical vehicle is an order to show cause (OSC) with a TRO embedded — filed with the court and presented to the assigned judge or duty judge on an emergency basis. Plaintiff’s counsel must notify opposing counsel at least 24 hours before the return date (Lanin Law practice note, retrieved 2026-06-02). CPLR Art. 63

Bond Required

Yes — CPLR § 6312(b) requires the movant to post an undertaking (bond) as a condition of injunctive relief, in an amount fixed by the court “sufficient to compensate the restrained party for any damages suffered” if the injunction is later found to have been wrongly granted. The court has discretion to waive or reduce the bond where the movant’s claims have clear merit, but the standard practice is to require a bond. CPLR § 6312

Emergency Timeline

An order to show cause with a TRO can be obtained within 24–48 hours of filing if the application is properly documented and the emergency is genuine. A TRO issued under CPLR § 6301 expires within 14 days unless extended for good cause shown. Counsel must act well before the scheduled sale date; day-of applications are extremely difficult and are frequently denied if the applicant created the emergency through delay.

Effect on a Completed Sale

If the sale was completed before the TRO issued, New York courts generally hold the sale is not voidable solely because a TRO application was pending — the “gavel rule” applies and courts are reluctant to unwind completed arms-length sales. However, a completed sale may be set aside on direct motion to vacate the underlying judgment (CPLR 5015) if the movant demonstrates fraud, lack of notice, or other grounds independent of the TRO. needs_verification: No specific NY appellate decision on the precise effect of a post-sale TRO on a completed in rem tax sale was retrieved.

Non-Judicial Foreclosure Notes

Not applicable — New York has no non-judicial mortgage foreclosure. All mortgage and tax in rem foreclosures are judicial, so TRO practice in all cases runs through Supreme Court via CPLR.

7b. Lien Survival & Purchaser Exposure

IRS 120-Day Redemption Right

  • Applies? Yes. Where the IRS holds a federal tax lien against the property owner and the property is sold at a foreclosure sale (whether tax in rem or mortgage), the IRS retains a 120-day right of redemption under 26 U.S.C. § 7425(d) (judicial sales) and 28 U.S.C. § 2410(c). The 120 days run from the date of the foreclosure sale. New York’s own redemption period (2 years) is longer, so the IRS period is subsumed — the IRS right is the longer of 120 days or the state period (26 CFR § 301.7425-4).
  • Notice required: For non-judicial sales (tax-lien-certificate sales under RPTL Title 5), the foreclosing party must provide written notice to the IRS (via registered/certified mail to the Advisory Consolidated Receipts office) at least 25 days before the sale (26 U.S.C. § 7425(b); 26 CFR § 400.4-1). Failure to give proper notice means the IRS lien is NOT discharged by the sale.
  • For in rem judicial foreclosures: The IRS should be made a party to the in rem proceeding (RPTL § 1125 requires notice to “any other person whose right, title, or interest was a matter of public record”). If properly noticed, the federal lien is cut off; if not, it survives.
  • Procedure: IRS redeems by paying the purchaser the sale price + 6% annual interest + maintenance costs in excess of income.
  • Citation: 26 U.S.C. § 7425; 28 U.S.C. § 2410(c); 26 CFR §§ 301.7425-2, 301.7425-4; 26 CFR § 400.4-1. 26 CFR § 301.7425-4 (Cornell)

HOA Super-Priority

  • Super-priority exists? No. New York does not have an HOA/COA super-priority statute. Under NY Real Property Law § 339-z (Condominium Act), a board of managers’ lien for common charges is “prior to all other liens except only (i) liens for taxes … (ii) all sums unpaid on a first mortgage of record.” This means HOA/condo liens are subordinate to recorded first mortgages — there is no super-priority over first mortgages (approximately 20 states have such super-lien laws; NY is not among them). RPL § 339-z (public.law)
  • Does HOA lien survive a tax sale? An HOA lien (under RPL § 339-z) is a private lien subordinate to tax liens. When a property is sold in an RPTL Art. 11 in rem tax foreclosure and the HOA/condo association was properly noticed into the proceeding, the HOA lien is extinguished by the sale. If not noticed, the lien may survive.
  • Does HOA lien survive a mortgage foreclosure? Depends on relative recording dates: a condo lien recorded after the first mortgage is junior and is extinguished by first-mortgage foreclosure. A condo lien recorded before the mortgage is senior and survives. The 2025 amendment (effective October 16, 2025) adds a 90-day pre-foreclosure notice requirement for HOA foreclosures but does not change lien priority.
  • Statute: RPL § 339-z (condo common charges) and § 339-aa (foreclosure procedure, amended 2025).
  • Cap: N/A — NY HOA liens have no super-priority cap; they are simply junior to first mortgages.
  • Leading cases: needs_verification — no specific NY appellate case on HOA lien survival at tax sale retrieved.

Environmental Liens (CERCLA / State Superfund)

  • CERCLA lien survives tax sale? Under federal CERCLA §§ 107(l) and (r), the federal government may impose a lien for cleanup costs; such liens are generally junior to all prior-perfected state liens. Whether a CERCLA lien survives an in rem tax sale depends on whether the U.S. was properly notified and made a party (same as IRS liens above). If the U.S. was not made a party or the lien was not properly discharged, it may survive.
  • State superfund super-lien? New York’s Inactive Hazardous Waste Disposal Site Remedial Program (Environmental Conservation Law § 27-1301 et seq.) was recently amended (2025) to include authority for DEC to impose liens on responsible parties’ real property — but this is a new development and whether such liens constitute “super-liens” with priority over mortgages or survive tax sales is not confirmed by retrieved primary sources. Flagged needs_verification. GT Law: NY Superfund overhaul 2025

Municipal Code / Blight Liens

  • Survive tax sale? It depends on whether the municipal lien was recorded before or after the tax lien being foreclosed, and whether the municipality was noticed in the proceeding. In New York City, Environmental Control Board (ECB) violation judgments (building code, environmental) can be converted to tax liens by the Department of Finance; once converted and attached to the property (rather than merely the owner), they are treated as tax liens and survive (or must be paid at) the in rem sale.
  • ECB liens: ECB violations matched by property address are reported as municipal liens and may survive foreclosure if not paid; ECB judgments matched only by owner name (not address) do not attach to the property and are extinguished. ProTitleUSA ECB lien explainer
  • Statute: NYC Admin. Code §§ 11-335 et seq. (NYC tax lien provisions); RPTL Art. 11 (upstate).
  • Notes: Upstate NY municipalities with building/code-enforcement liens must also be noticed into the in rem proceeding for the lien to be extinguished.

Mechanic’s Liens

  • Survive if noticed? Mechanic’s liens perfected (filed) before the RPTL foreclosure petition and properly noticed into the proceeding are extinguished by the in rem judgment. Mechanic’s liens filed after the lis pendens / petition are cut off by the judgment under RPTL § 1136. A mechanic’s lien whose holder was not properly noticed retains its validity.
  • Notes: Mechanic’s liens under NY Lien Law are effective for one year from filing (extendable). A purchaser should confirm that all mechanic’s liens were either extinguished in the in rem proceeding or have expired.

Junior Mortgage / Senior Lien Exposure

  • Purchaser takes subject to senior liens? In an in rem tax foreclosure, properly noticed junior mortgages and liens are extinguished by the judgment (RPTL § 1136). However, senior liens that were not named in the petition or not properly noticed may survive. Common mistake: assuming all liens are extinguished when an obscure senior lien or federal lien was never properly served in the in rem proceeding.
  • Notes: A purchaser at in rem sale acquires title “free and discharged of all tax and municipal claims, liens, mortgages, charges and estates” (NPCL § 1616 for land-bank purchasers; same principle for RPTL § 1136 sales) — but only as to those interests that were part of the proceeding. Federal liens (IRS, CERCLA) require separate federal-law analysis.

Due Diligence Checklist (Before Bidding)

  1. Federal tax lien search (IRS FLTRS / county clerk UCC/lien index) — confirm IRS was noticed and 120-day redemption right implications.
  2. CERCLA / Phase I environmental search — identify state and federal environmental liens; ECL § 27-1301 search for NY Superfund registry listings.
  3. HOA/condo status — confirm whether RPL § 339-z lien exists; check recording dates vs. any mortgage.
  4. Mechanic’s lien search — NY county clerk filings; confirm expiration or extinguishment.
  5. Municipal/ECB lien search — NYC Finance property search; upstate county treasurer records.
  6. IRS 25-day notice compliance (for Title 5 lien-sale foreclosures) — confirm proper notice was given or that no federal lien exists.
  7. Notice adequacy review — review RPTL § 1125 mailing/service records; any returned-mail / undeliverable notation requires checking whether the district conducted the required reasonable public-record search (Kennedy v. Mossafa; MacNaughton v. Warren County).
  8. SCRA check — confirm no active-duty military member is an owner/mortgagor.

10b. Purchaser Obligations During Redemption Period

New York’s RPTL Article 11 in rem scheme differs from lien-certificate states: the “purchaser” during the redemption period is the tax district itself (the enforcing officer), not a third-party investor. The discussion below addresses both the tax district’s obligations before executing the deed and, for the Title 5 lien-certificate track (where a private investor purchases the lien), the investor’s obligations.

Must Pay Subsequent Taxes

  • Required? Under RPTL Title 5 (lien-certificate track, RPTL § 1194 et seq.), the lien purchaser may pay subsequent taxes on the property and those amounts are added to the redemption amount owed by the owner on redemption. There is no provision in the RPTL limiting the lien holder’s right to pay subsequent taxes. Under the Article 11 Title 3 in rem scheme, subsequent taxes continue to accrue against the parcel; the tax district as lien holder may not need to separately “pay” them because it is the taxing authority. NY Tax Dept, SBEA Opinion v.8 No. 124
  • Consequence of failure: In the lien-certificate context, failure to pay subsequent taxes may result in a second tax lien arising against the property, potentially subordinating or complicating the first lienholder’s position.
  • Citation: RPTL § 1194 (Title 5 lien-sale track); SBEA Opinion v.8 No. 124.

Must Notify Owner of Expiration

  • Required? Under the in rem scheme, the enforcing officer is required to include in the RPTL § 1124 published notice of foreclosure and the § 1125 mailed notice the redemption deadline. No separate certified-letter “expiration warning” notice to the owner is mandated by the RPTL in the same way some lien-certificate states require (e.g., a 90-day certified notice before the redemption deadline).
  • Form / timing: The § 1125 mailed notice is the primary owner notification. It must be sent “by certified mail and ordinary first class mail” to each owner and interested party of record at least 90 days before the petition of foreclosure is filed. RPTL § 1125
  • Consequence of failure: Failure to give adequate notice renders any resulting deed constitutionally defective and voidable as to the un-noticed party (Kennedy v. Mossafa; MacNaughton v. Warren County — requires reasonable additional steps when mail is returned undeliverable).
  • Citation: RPTL § 1125; Kennedy v. Mossafa, 100 N.Y.2d 1 (2003).

Owner Occupancy Right During Redemption

  • Owner may remain? Yes. During the redemption period (before the in rem judgment becomes final and before the deed is executed), the former owner retains legal possession. Property rights are “finally foreclosed only when the enforcing officer executes a deed” (RPTL § 1136). Even after the judgment of foreclosure, the deed has not yet issued, so the owner technically retains occupancy rights until the deed is executed.
  • Purchaser may enter? In the in rem scheme, no purchaser exists until after the deed is executed. Once the tax district takes title by deed, it holds fee simple absolute and may proceed with ejectment if the former owner fails to vacate.
  • Citation: RPTL § 1136(3) (award of possession to tax district upon deed execution); RPTL § 1110 (redemption until the deadline). RPTL § 1136

Costs Collectible Upon Redemption

  • Bid + interest: In the Title 5 lien-certificate track, the redeeming owner must pay the face amount of the certificate, all accrued interest (§ 924-a rate or certificate rate), and subsequent taxes paid by the lienholder. In the in rem scheme, redemption requires payment of “the amount of the delinquent tax lien or liens, including all charges authorized by law” (RPTL § 1110).
  • Subsequent taxes: Yes — included in the redemption amount (RPTL § 1110; SBEA Opinion v.8 No. 124).
  • Documented improvements: No — the RPTL does not authorize the certificate holder or tax district to collect reimbursement for improvements made during the redemption period.
  • Other: Court costs and enforcing officer’s charges authorized by RPTL § 1102.
  • Citation: RPTL §§ 1110, 1102; RPTL § 1194 (Title 5 certificate track). RPTL § 1110

Property Maintenance Obligation

  • Required? The RPTL does not impose an express maintenance obligation on a lien certificate holder or the tax district during the redemption period. However, practical considerations apply: if the property is vacant/abandoned and a receiver is appointed, the receiver manages the property.
  • Standard: No express statutory standard found. needs_verification — specific NY statute or case imposing maintenance duty on tax certificate holder not located.
  • Citation: RPTL § 1138 (tax district may withdraw from foreclosure if liability substantially exceeds recovery — implying awareness of property condition obligations). RPTL § 1138

11b. Restrictions & Special Rules

Entity Purchase Restrictions

  • Natural persons only? No — RPTL § 1136 and the in rem scheme impose no entity-type restriction on purchasers. Corporations, LLCs, trusts, and other entities may acquire property at tax in rem sales.
  • LLC permitted? Yes.
  • Foreign entity permitted? Yes, subject to the general requirement that foreign entities doing business in New York be authorized to do so by the NY Department of State (Business Corporation Law; LLC Law § 802). An unauthorized foreign entity may be unable to maintain a New York lawsuit but that does not invalidate the purchase itself. LLC Law § 802
  • Notes: RPTL § 1194 (Title 5 lien-sale track) explicitly authorizes “successors or assigns” of any character. NYC’s Administrative Code tax-lien-sale program has historically sold liens to trusts/institutional investors.
  • Citation: RPTL § 1136; RPTL § 1194; NY LLC Law § 802.

Insider Prohibition

  • Who is prohibited? New York has no specific statute prohibiting county employees or officials from bidding at RPTL Art. 11 tax-foreclosure auctions. General public-ethics principles and county ethics codes may restrict certain officials from personally profiting from tax-foreclosed properties in their jurisdiction.
  • Scope: County-level ethics codes vary. DOJ has prosecuted bid-rigging at municipal tax-lien auctions (federal antitrust law, 15 U.S.C. § 1 — Sherman Act) — bid rigging by coordinated investors at NY-area auctions has resulted in federal criminal convictions.
  • Citation: needs_verification — no specific RPTL insider-bidding prohibition statute retrieved. General antitrust enforcement: DOJ press release, “Former Executive of New York-Based Tax Liens Company Pleads Guilty to Bid Rigging.” DOJ bid-rigging press release

Right of First Refusal

  • Municipalities / tax districts? Under NPCL § 1616, where a land bank holds a tax lien it intends to foreclose, the municipality (foreclosing governmental unit) has a right to repurchase the lien from the land bank within 30 days of receiving the 30-day pre-foreclosure notice. This is a repurchase right on the lien, not a right of first refusal at the public auction itself. NPCL § 1616
  • CDCs / nonprofits? No general statutory right of first refusal for CDCs or nonprofits. Under the in rem scheme, parcels not sold at public auction may be transferred to a land bank, housing agency, or public entity by the enforcing officer without a public sale (RPTL § 1196 no-surplus exception for such transfers).
  • Land banks? Under NPCL § 1616, if no municipality bids at the public auction, the land bank holding the lien may tender a bid equal to the total amount of all municipal claims and liens, and the property shall be deemed sold to the land bank regardless of any bids by any other third parties. This functions as a right of first refusal / priority bid right at auction for land banks. NPCL § 1616
  • Match window: 30 days for municipality’s lien-repurchase right; land bank auction bid right is exercised at the sale itself.
  • Citation: NPCL §§ 1603, 1607, 1616; RPTL § 1196.

Land Bank Program

  • Exists? Yes — New York has an active land bank program.
  • Name: New York State Land Bank Program.
  • Statute: Not-for-Profit Corporation Law (NPCL) Article 16 (§§ 1600–1617), enacted July 2011. NPCL Art. 16 · ESD program page
  • Receives unsold properties? Indirectly — land banks acquire tax-delinquent properties through the foreclosure process (as lien purchaser under Title 5, or via transfer from the tax district post-in rem judgment). RPTL § 1196 expressly exempts sales to land banks from the standard surplus calculation, allowing the district to convey to a land bank without triggering surplus liability if two failed public auctions have occurred.
  • Operational notes: Up to 35 land banks statewide (NPCL § 1603); must be approved by the Urban Development Corporation (Empire State Development); land banks are Type-C not-for-profit corporations. Acquired properties are tax-exempt while held by the land bank (NPCL § 1608 / RPTL exemption). Active land banks include the Albany County Land Bank, Greater Syracuse Land Bank, Schenectady County Land Bank, and others.

Deficiency Judgment

  • Permitted after tax sale? No. The RPTL in rem proceeding is by definition an action against the property only — “no personal judgment will be entered herein for such taxes or other legal charges or any part thereof” (standard RPTL § 1124 notice language). The in rem judgment extinguishes the personal tax debt against the property owner; no deficiency judgment is available after an in rem tax-deed sale. RPTL § 1124
  • Permitted after mortgage foreclosure? Yes, with fair-value offset and 90-day deadline. Under RPAPL § 1371, a deficiency motion must be made within 90 days of deed delivery, and the deficiency equals the debt minus the higher of (a) the fair market value as determined by the court or (b) the sale price. If no timely motion is made, the sale proceeds are “deemed to have fully satisfied the obligation.” RPAPL § 1371
  • Fair value defense? Yes — RPAPL § 1371’s fair-value rule is a statutory anti-deficiency protection requiring the court to assess fair market value; lenders cannot obtain deficiency based solely on a low foreclosure-sale price.
  • Citation: RPTL § 1124 (in rem — no personal judgment); RPAPL § 1371 (mortgage — 90-day, fair-value offset).

Anti-Deficiency Statute

  • Exists? New York does not have a general anti-deficiency statute for mortgage foreclosures. The RPAPL § 1371 fair-value offset is the closest functional equivalent — it limits (but does not eliminate) deficiency judgments after mortgage foreclosure. The in rem tax-foreclosure scheme is effectively anti-deficiency by design (in rem = against property only).
  • Scope: RPAPL § 1371 applies to all mortgage foreclosure deficiency motions. There is no separate “purchase money mortgage” anti-deficiency exemption in New York.
  • Citation: RPAPL § 1371.

One-Action Rule

  • Exists? Yes — RPAPL § 1301 (also referred to as the “one-action rule” or “election of remedies” statute). RPAPL § 1301
  • Rule: While a mortgage foreclosure action is pending or after final judgment for the plaintiff, no other action shall be commenced to recover any part of the mortgage debt without leave of the court in which the foreclosure action was brought (RPAPL § 1301(3)). The lender cannot simultaneously pursue both a money judgment on the note and a foreclosure action on the same debt.
  • Effect: If a lender obtains a money judgment on the note first, it must exhaust collection remedies on that judgment before foreclosing the mortgage. Violation of § 1301 requires the offending action to be stayed or dismissed.
  • Exceptions: (1) court-authorized simultaneous actions; (2) where separate properties secure separate debts; (3) guarantor liability triggered during a foreclosure action.
  • Notes: The one-action rule applies only to mortgage foreclosures; it has no application to RPTL in rem tax foreclosures (which are in rem only and cannot generate a deficiency).
  • Citation: RPAPL §§ 1301, 1371. RPAPL § 1301

Who this page is for

▸ For Investors / Operators — Start with §1 (in rem deed scheme, § 924-a 1%/month interest, § 1123 petition timing 21/33/45 months after lien date), §2/2b (the 2-year § 1110 redemption running until deed execution, plus the Title 5 lien-certificate track where § 1194 allows “successors or assigns” to foreclose and assign), §5b (path to marketable title — RPAPL Art. 15 quiet title in Supreme Court, the § 1137 two-year presumption, 6-year CPLR 213 seasoning, and the absence of a NY MRTA), §7b (liens that survive — un-noticed federal tax/CERCLA liens, NYC ECB-converted tax liens, RPL § 339-z condo/HOA priority, and the IRS § 7425 120-day redemption), and §11b (entity eligibility, NPCL Art. 16 land banks and the § 1616 land-bank priority bid, RPAPL § 1301 one-action rule).

▸ For Former Owners — Start with §3 (the post-2024 surplus right under RPTL §§ 1196–1197 — surplus is determined within 45 days of sale, adjudicated within the in rem proceeding under RPAPL Art. 13, and for residential property the proceeding stays open at least three years from confirmation; note unclaimed surplus goes to the tax district, not the Comptroller), §2 (redemption — paying the delinquent lien plus § 924-a interest and charges before the deadline under § 1110), and §5c (grounds, the CPLR § 6312 bond, and the order-to-show-cause procedure for an emergency motion to halt a scheduled sale).

11. Meta

Local pages

County deep dives: albany-ny, bronx-ny, dutchess-ny, erie-ny, kings-ny, monroe-ny, nassau-ny, new-york-ny, niagara-ny, oneida-ny, onondaga-ny, orange-ny, queens-ny, richmond-ny, rockland-ny, saratoga-ny, suffolk-ny, westchester-ny Unclaimed funds agency: unclaimed-property-new-york

Legal information, not legal advice. This page summarizes statutes and cases as of the last_verified date and may be incomplete or out of date; New York’s surplus regime in particular is new (2024) and actively litigated. Verify against the cited primary sources and consult a licensed New York attorney before acting.

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