NY's Warren County Seeks To Reform Its "Surplus Snatching" Ways In Delinquent R/E Tax F'closures & Allow Ex-Property Owners To Keep Equity After Sale

In Warren County, New York, The Post Star reports:

• Once a county forecloses on your property, that property no longer belongs to you. It belongs to the taxpayers. So we have to wonder why Warren County supervisors are pushing so hard to give that money back. At issue is a law that allows counties to keep all the money from the sale of foreclosed properties, even if the sale price exceeds the amount of taxes owed on the property.(1) Some supervisors want the county to accept only the back taxes, and give any extra money back to the person who lost the property to foreclosure.(2)

For more, see County should keep money from foreclosures.

(1) The effect of this law, as it currently stands, is that the consequence of a failure to pay real estate taxes is a forfeiture of the real estate by a property owner. Forfeitures are generally unfavored in the law (a philosophy that forms the basis for the old maxim, "equity abhors a forfeiture"), and, clearly, the statute should be appropriately changed. There is no valid reason why the county should benefit from the delinquent property owner's built-up equity (over and above the amount due on the outstanding tax bill - plus interest, penalties, costs, etc.), and why these situations are not handled like any mortgage foreclosure, where the sale proceeds over and above what is owed to the foreclosing lien holder (ie. the "surplus" or "overage") belong to the foreclosed property owner (subject to any claims of subordinate lienholders).

(2) This story is actually an op-ed piece appearing on the "mullet wrapper" page of Warren County's local newspaper where the editorial board expresses its support for keeping the law unchanged, shamelessly advocating for the continued forfeiture, to the county, of the equity built up by tax-delinquent property owners over and above their unpaid tax debts.