Monday, February 27, 2012

NYS High Court: No Due Process Violation Where Municipality Fails To Inform Property Owners Of Buyback Rights In Tax Foreclosure

The New York Law Journal reports:

  • [O]n Feb. 21, a unanimous Court agreed that a couple's due process rights were not violated when Orange County took possession of two acres without informing the couple directly of a local law allowing them to buy back the land if all taxes, interest and penalties were paid.

  • The Court determined that Jeanette and Ola Helseth had proper knowledge that a tax lien foreclosure was pending on the property and that a municipality is not obligated to give proper notice during every stage of the foreclosure process.

  • "We agree with the County and hold that it was only obligated to give singular notice of the foreclosure action as that was the underlying governmental action threatening the Helseth's property interests," Judge Jones wrote for the 7-0 Court in Matter of the Foreclosure of Tax Liens by Proceeding in Rem Pursuant to Article Eleven of the Real Property Tax Law, by Orange County Commissioner of Finance v. Helseth, 9.

  • The Helseths had argued that repeated notice during a foreclosure is needed to satisfy property owners' due process guarantees, citing Jones v. Flowers, 547 U.S. 220 (2006). But Judge Jones said the county's notification that a repurchase option for the property might be available—the county legislature would have had to sign off on such a transaction—"was not the underlying taking or an extension of such action, but a subsequent, optional measure."

  • The county had argued that upholding two lower court rulings allowing the Helseths to move for repurchase after the option had expired would impose a new burden on foreclosing municipalities and conflict with case law in tax foreclosure matters.

Source: Tax Lien Foreclosure Notice (2nd story from the top).

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