§ 1138 — Withdrawal of parcels from foreclosure

§ 1138. Withdrawal of parcels from foreclosure. 1. Grounds. The\nenforcing officer of any tax district may at any time prior to final\njudgment withdraw any parcel of real property from a foreclosure\nproceeding under this title for one or more of the following reasons:\n (a) there is reason to believe that there may be a legal impediment to\nthe enforcement of the tax lien affecting such parcel;\n (b) the tax has been cancelled or is subject to cancellation pursuant\nto section five hundred fifty-eight of this chapter, or, in the case of\na tax district to which such section does not apply, the tax would be\nsubject to cancellation if such section were applicable to the tax\ndistrict;\n (c) the enforcement of the lien has been stayed by the filing of a\npetition pursuant to the Bankruptcy Code of 1978 (Title Eleven of the\nUnited States Code);\n (d) if the tax district were to acquire the parcel, there is a\nsignificant risk that it might be exposed to a liability substantially\nin excess of the amount that could be recovered by enforcing the tax\nlien;\n (e) the owner of the parcel has entered into an agreement to pay the\ntaxes in installments pursuant to section eleven hundred eighty-four of\nthis article, and has not defaulted thereon;\n (f) in a tax district which has extended the redemption period for\nresidential or farm property, (i) the parcel has been included on a\npetition for foreclosure, (ii) it has since been demonstrated to the\nsatisfaction of the enforcing officer that the parcel is residential or\nfarm property, and (iii) being residential or farm property, the parcel\nis not yet subject to inclusion on such a petition;\n (g) in a tax district which has extended the redemption period for\nresidential property for certain persons deployed by the military (i)\nthe parcel has been included on a petition for foreclosure, (ii) has\nbeen demonstrated to the satisfaction of the enforcing officer that the\nparcel is residential, (iii) the property is eligible for the extended\nredemption period pursuant to section eleven hundred thirteen of this\narticle, and as such is not yet subject to inclusion of such a petition;\nor\n (h) the tax lien has been or is to be sold pursuant to title five of\nthis article.\n 2. Procedure. (a) Upon the withdrawal from foreclosure of any parcel\nof real property, the enforcing officer shall issue a certificate of\nwithdrawal, setting forth the facts which render the parcel eligible for\nwithdrawal from foreclosure. The certificate shall be filed with the\nclerk of the governing body of the tax district.\n (b) If the parcel has been included on a list of delinquent taxes that\nhas been filed pursuant to section eleven hundred twenty-two of this\ntitle, the enforcing officer shall file a copy of the certificate of\nwithdrawal with the county clerk within ten business days from the\nissuance of the certificate. The county clerk shall note the word\n"withdrawn" and the date of such filing opposite the description of such\nparcel on the list.\n 3. Effect. The filing of such a certificate shall have the effect of\nwithdrawing the affected parcel from foreclosure; provided, that (a) the\nfiling shall have no effect upon the tax lien or liens against the\naffected parcel, nor, if the parcel has been included on a list of\ndelinquent taxes that has been filed pursuant to section eleven hundred\ntwenty-two of this article, upon the notice of pendency with respect to\nany such parcel, unless the lien should be cancelled pursuant to\nsubdivision six of this section or such other law as may be applicable;\nand (b) if the lien is not cancelled, the foreclosure proceeding may be\nreinstated in the manner provided in subdivision four of this section,\nor a supplementary proceeding to enforce collection of the delinquent\ntax may be commenced in the manner provided in subdivision five of this\nsection.\n 4. Reinstatement. (a) The enforcing officer shall reinstate a\nwithdrawn foreclosure proceeding if (i) he or she determines that the\nparcel is no longer eligible for withdrawal from foreclosure, or (ii)\nthe governing body of the tax district adopts a resolution directing the\nenforcing officer to reinstate such proceeding.\n (b) The enforcing officer shall issue a certificate of reinstatement\nsetting forth the reasons for the reinstatement of the proceeding.\n (c) If the parcel has been marked "withdrawn" on a list of delinquent\ntaxes that has been filed pursuant to section eleven hundred twenty-two\nof this title, the enforcing officer shall file a copy of the\ncertificate with the county clerk within ten business days from the\nissuance of the certificate. The county clerk shall note the word\n"reinstated" and the date of the filing of the certificate of\nreinstatement opposite the description of such parcel on the list.\n (d) The enforcing officer shall file a petition of foreclosure\npertaining to the affected parcel as soon thereafter as is practicable.\nIn no event, however, shall such petition be filed sooner than\ntwenty-one months after lien date, or, in the case of property which is\nsubject to a three or four year redemption period, sooner than\nthirty-three or forty-five months after lien date, respectively.\n 5. Supplementary proceedings. After a foreclosure proceeding has been\nwithdrawn, the enforcing officer shall commence a supplementary\nproceeding to collect the delinquent taxes in the manner provided by\nsection nine hundred ninety of this chapter if (a) he or she determines\nthat doing so would be an effective means to enforce collection of the\ndelinquent tax, or (b) the governing body of the tax district adopts a\nresolution directing the enforcing officer to commence such a\nproceeding. Such a proceeding may be commenced within one year from the\nissuance of a certificate of withdrawal, notwithstanding the fact that\nthe enforcing officer may have previously proceeded pursuant to the\nprovisions of this article.\n 6. Cancellation. (a) After a foreclosure proceeding has been\nwithdrawn, the governing body of the tax district may cancel the\ndelinquent tax lien if it determines that there is no practical method\nto enforce the collection of the delinquent tax lien and that a\nsupplementary proceeding to enforce collection of the tax would not be\neffective. A copy of the resolution directing the cancellation of the\nlien shall be filed with the enforcing officer.\n (b) If the parcel has been included on a list of delinquent taxes that\nhas been filed with the county clerk, the enforcing officer shall issue\na certificate of cancellation, setting forth the relevant facts, and\nfile a copy of the same with the county clerk within ten business days\nfrom the issuance of the certificate. The county clerk shall note the\nword "cancelled" and the date of the filing of the certificate of\ncancellation opposite the description of such parcel on the list. The\nfiling of such a certificate of cancellation shall operate to cancel the\nnotice of pendency with respect to the parcel.\n (c) A tax district shall not be required to credit or otherwise\nguarantee to any municipal corporation the amount of any delinquent tax\nlien which has been cancelled in the manner provided by this section. If\nsuch a credit or guarantee shall have been given before the cancellation\nof the lien, the tax district shall be entitled to charge back to the\nmunicipal corporation the amount so credited or guaranteed.\n (d) If the governing body should determine that there is no practical\nmethod to enforce the collection of delinquent tax liens arising\nthereafter against the parcel, it may direct the enforcing officer to\nissue a certificate of prospective cancellation, setting forth the\nrelevant facts. The enforcing officer shall file a copy of the\ncertificate with the assessor of the assessing unit in which the parcel\nis located and with the county director of real property tax services.\nThe parcel shall thereby become exempt from taxation notwithstanding any\nother provision of law. The parcel shall remain exempt until the\ngoverning body determines that the parcel should be restored to the\ntaxable portion of the assessment roll, and the enforcing officer files\na certificate of restoration, setting forth the relevant facts, with the\nassessor and county director of real property tax services.\n