Failing to keep up with the property taxes on your New York home can lead to a tax foreclosure. Here's how a New York tax foreclosure works: When you don't pay the taxes, the delinquent amount, which includes the accrued taxes, interest, penalties, and costs resulting from the delinquency, becomes a lien on your home. A "lien" is a legal claim on your property. The taxing authority can then foreclose the lien to collect the overdue amounts. (A few places in New York sell tax lien certificates, which means they sell the lien that exists on the home rather than foreclosing to collect the overdue taxes. This article, however, focuses on the tax foreclosure process.)
In New York, the tax foreclosure procedure is similar to the mortgage foreclosure process. A petition (lawsuit) is filed in court. If you don't respond to the lawsuit by filing an answer that lists your objections to the case, the court will enter a default judgment against the property. A "default judgment" means you automatically lose because you didn't answer the suit. Then, either the tax district gets possession of the property directly, or an auction is held to sell it. (N.Y. Real Prop. Tax Law § § 1120, 1136.)
You'll get some time to make things right to prevent a tax foreclosure from going ahead, though. Read on to find out what type of notice you'll receive if you're facing a tax foreclosure in New York and how to stop the process to ensure you don't lose ownership of your home.
When the foreclosure petition is filed, a notice of foreclosure must be published in a newspaper (N.Y. Real Prop. Tax Law § 1124). On or before the first date of publication, the enforcing officer must send you a notice by certified and first-class mail stating that the foreclosure has started. (N.Y. Real Prop. Tax Law § 1125.) The notice must specify the last day for redemption (see below) that's at least three months after the date of the first publication of this notice. (N.Y. Real Prop. Tax Law § 1124.)
If the mailings get returned, and there's no alternate address to send them to, the notice must be posted on the property. (N.Y. Real Prop. Tax Law § 1125.)
The notice will specify, among other things, the last day that you can redeem (see below) the property. (N.Y. Real Prop. Tax Law § 1125.)
In New York, you get some time to save your home from a tax foreclosure. During this period (called a "redemption period"), you can pay all delinquent taxes and other charges to stop the foreclosure—a process known as "redeeming" the home.
Generally, the redemption period expires two years after the lien date (that is, when the tax or other legal charges became a lien). However, local law may provide a longer redemption period. (N.Y. Real Prop. Tax Law § 1110.) (Learn more in Getting Your Home Back After a Property Tax Sale in New York.)
The foreclosure proceeding generally starts around three months before the redemption period expires. (N.Y. Real Prop. Tax Law § 1124.)
If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay.
If you're already facing a property tax foreclosure in New York and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.