Getting Your Home Back After a New York Property Tax Sale

If you are facing tax foreclosure in New York, you will have some time to redeem your house.

If you do not pay your property taxes on time, the amount owed becomes a lien on your house. This form of lien nearly often takes precedence over other types of liens, including mortgages. When taxes are not paid, the taxing authority will either sell the lien (and if you do not pay the past-due sum to the lien purchaser, that party may foreclose or use another way to get title to the house) or sell the property itself in a tax sale. In certain areas, however, no auction is made; instead, the taxation body enforces its lien by acquiring ownership to the residence. The taxation body is then required by state law to dispose of the property, typically by selling it. Before conducting a sale, the taxation authority in some countries utilizes a foreclosure procedure.

When you fail to pay your property taxes in New York, the overdue amount, which includes the outstanding taxes, interest, penalties, and charges, becomes a lien on your house. The taxation authorities may then foreclose the lien in order to recover the unpaid sums. If you do not respond, the court will issue a default judgment against the property. (If you lose by default, it is because you did not react to the case.) The property is then either immediately transferred to the tax district or auctioned off.

You’ll have some time in New York to preserve your property from tax foreclosure. During this period, known as the “redemption period,” you may pay all outstanding taxes and other costs in order to halt the foreclosure—a procedure known as “redeeming” the house. You may be able to pay off your outstanding taxes over time if your tax district permits it by enrolling into an installment arrangement. In rare cases, if you lose your house due to a tax foreclosure, you may be able to reclaim it by submitting a request to reopen the default judgment or asking the court to set aside the tax deed.

The Right to Redeem Your New York Home in the Event of a Tax Foreclosure

Again, in New York, you may “redeem” your house to avoid losing it to a tax foreclosure. To redeem the property, you must pay the amount of the outstanding tax lien or liens, including any legal expenses, before the redemption period ends. (New York Real Property Tax Law 1110.)

When Does the Redemption Period in New York End?

In most cases, the redemption time ends two years from the lien date. (New York Real Property Tax Law 1110.) However, the redemption time may be extended beyond two years following the lien date if:

The tax district extends the redemption time (for example, three or four years) (N.Y. Real Prop. Tax Law 1111), or the public notice of foreclosure specifies a later date for the redemption period to expire. (New York Real Property Tax Law 1110.)

The foreclosure process usually begins three months before the redemption period ends. (New York Real Property Tax Law 1124.)

On the other hand, if the property has been put on a vacant and abandoned roll, registration, or list prior to the date on which taxes become overdue in the local municipality, the tax district may decrease the redemption time to one year. (New York Real Property Tax Law 1110.)

Additional Time in New York to Redeem Your Property

In addition, New York law allows the owner to redeem until:

the thirty-first day after the mailing of the notice of foreclosure, or the date designated in the notice of foreclosure as the final day for redemption, whichever is later. (New York Real Property Tax Law 1125.)

You may be able to pay your back taxes in installments.

You may be able to pay off your outstanding taxes over time if your tax district permits it by enrolling into an installment arrangement. The agreement’s duration cannot be more than 36 months. You must make a down payment, but it cannot exceed 25% of the qualifying overdue taxes. (New York Real Property Tax Law 1184.)

However, you are not able to sign into an installment arrangement if you:

Another unpaid tax lien is on your property (or another property you own) and that lien is ineligible to be included in the agreement; you lost another property to a tax foreclosure during the last three years; or you failed on a tax installment arrangement within the last three years. (New York Real Property Tax Law 1184.)

Methods for Getting Your Home Back After a Tax Foreclosure

If you lose your house due to a tax foreclosure, depending on the circumstances, you may be able to reclaim it by pursuing one of the legal options listed below.

Filing a Reopening Motion for a Default Judgment

In rare cases, you may be able to reopen a default judgment if you do not redeem or submit a response to the action. To do so, you must make a request no later than one month after the court issues its decision, detailing the reasons why the judgment should be reopened, such as demonstrating a very good reason why you neglected to reply to the litigation. (New York Real Property Tax Law 1131.)

Requesting that the Tax Deed be set aside by the Court

In very restricted circumstances, you may be able to invalidate a tax foreclosure and the associated tax deed that transferred ownership to a new owner. For example, if you were not properly notified of the foreclosure, you might request that the deed be set aside (invalidated) by the court. You must file an objection to the deed within two years after the tax deed’s recording. (New York Real Property Tax Law 1137.)

Obtaining Legal Assistance in New York

The tax foreclosure rules in New York, which involve redemption, reopening a default judgment, and putting aside a sale, are intricate. To find out the deadline for redeeming your property in a New York tax foreclosure, or if you wish to reopen a default judgment or set aside a tax deed, you should speak with an expert who specializes in property tax affairs, such as a foreclosure lawyer, a real estate lawyer, or a tax lawyer.