When a New York village wants to remediate or demolish an abandoned, deteriorating building and recover the cost, what notice does it owe the mortgagee, can the county refuse to relevy unpaid remediation costs as part of village taxes, and does a tax-foreclosure sale wipe out the mortgage?

Plain-English summary

The Village of Hudson Falls had a familiar small-village problem: properties abandoned by mortgage-burdened owners while mortgagees stalled or sat on foreclosure. The properties were deteriorating and becoming unsafe. The village wanted clarity on three steps in the abate-and-recoup chain.

Question 1: Does the village have to notify the mortgagee before remediating or demolishing the building?

In a true emergency (immediate public danger), no. Calamusa v. Town of Brookhaven. Outside of an emergency, the answer is generally yes for any action that significantly affects the mortgagee's interest in the property. Demolition essentially always significantly affects the mortgage interest by wiping out building value; it requires notice. Significant remediation costs charged against the property also require notice. The constitutional anchor is Mennonite Board of Missions v. Adams, 462 U.S. 791 (1983): a recorded mortgagee has a legally protected interest, and due process requires reasonable notice before the government takes action that meaningfully affects that interest. The safest course, the AG advised, is to give the mortgagee the same notice you would give the owner.

Question 2: Can the county that collects the village's delinquent taxes refuse to relevy unpaid remediation-cost assessments?

No. Under Real Property Tax Law § 1442, when a county has agreed to collect a village's delinquent taxes, the county must collect all of them, not pick and choose between line items. But the county has a remedy: it can repeal its local law and stop collecting village taxes entirely. So the county's recourse is all-or-nothing, not item-by-item.

Question 3: If the county-collected village tax (including a remediation-cost assessment) goes unpaid through the redemption period and the county forecloses, does the mortgage get wiped out?

Generally, yes. Article 11 of the Real Property Tax Law sets up the redemption-and-foreclosure procedure. If the owner and any other interested parties (including the mortgagee) fail to redeem within the statutory period, county tax foreclosure extinguishes the mortgage interest, and a buyer at the subsequent tax sale takes fee simple absolute. Anderson v. Pease; Melahn v. Hearn; Mittelmark. Caveat: a tax sale conducted while the property is subject to a federal bankruptcy stay can be void. In re Killmer.

Currency note

This opinion was issued in 2015. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Real Property Tax Law's tax-foreclosure procedures and the constitutional notice requirements have continued to evolve since 2015, including significant constitutional development in Tyler v. Hennepin County, 598 U.S. 631 (2023), on whether and to what extent a tax authority can retain surplus from a tax sale. That decision and its New York implementations would have to be consulted for any current dispute about rights of former owners or lienholders following a tax foreclosure.

Historical context

What the opinion meant for villages

A village confronting an abandoned-building problem at the time had a roadmap: adopt a local code-enforcement law (under home-rule authority); identify the recorded mortgagees and notify them along with the owners; do the work; assess the cost as a lien against the property; route the lien through the village tax bill; and rely on the county collection arrangement. If the owner and mortgagee continued to ignore the assessment, the county tax-foreclosure machinery would eventually clear the title.

What the opinion meant for mortgagees

Recorded mortgagees received clear notice from the AG that they could not duck the consequences of property deterioration by simply not foreclosing. The village could remediate, charge the property, and ultimately wipe out the mortgage through tax foreclosure. The mortgagee's protection was procedural (notice and an opportunity to address the conditions or to redeem the tax), not a veto.

What the opinion meant for counties

A county that had agreed to collect village taxes was bound to collect all line items. The opinion gives the county a way out (repeal the collection agreement) but no item-level discretion. That mattered because some county treasurers wanted to refuse to relevy the village's larger remediation-cost assessments, anticipating collection difficulty. The AG closed that workaround.

Common questions

Q: When does the village not need to notify the mortgagee?
A: Emergency cases requiring immediate demolition or remediation to protect public safety. Calamusa v. Town of Brookhaven, 272 A.D.2d 426 (2d Dep't 2000). The "emergency" exception is narrow and tied to real, immediate danger.

Q: What kind of remediation triggers the duty to notify?
A: Demolition almost always does. Significant cost assessments against the property generally do. Routine, low-cost remediation may not, but the AG advised giving notice as the safest course.

Q: What does "redemption period" mean for tax foreclosure?
A: The window in Real Property Tax Law §§ 1110-1122 during which the owner and other interested parties can pay the delinquent tax (plus penalties) and reclaim clear title. After the redemption period, the county can begin foreclosure under §§ 1123-1137.

Q: Does the village have to use the county tax-collection route?
A: No. The village can collect its own taxes. But if it has agreed with the county for county collection (per § 1442), then the county's obligation is all-or-nothing.

Q: What happens to the mortgagee's lien after a county tax-foreclosure sale?
A: The lien is extinguished, and the buyer takes fee simple absolute. Real Property Tax Law § 1136(3); Anderson v. Pease. The exception is a sale conducted in violation of a bankruptcy stay or other procedural defect; in that narrow case, the sale may be void.

Q: What is a "publicly-recorded mortgagee"?
A: A mortgage lender whose interest is recorded in the county clerk's office. The recording is what makes the mortgagee's interest constructively known to the world (and discoverable by a village considering remediation). An unrecorded mortgagee may not have the same notice protection because the village wouldn't know who they are.

Background and statutory framework

The opinion synthesizes three layers of New York law:

1. Home-rule authority for code enforcement. Municipal Home Rule Law § 10(1)(ii)(a)(12) authorizes local laws relating to health, safety, and well-being. Subsection (9-a) authorizes assessment of remediation costs against real property as a lien. Village Law § 4-412(1)(a) and § 4-414 confirm village authority. D'Angelo v. Cole, 67 N.Y.2d 65 (1986), is the foundational New York case on village remediation authority.

2. Tax-collection mechanics. Village Law § 5-518(5) provides that unpaid assessments roll into the annual village tax levy. Real Property Tax Law § 1442 governs county collection of village taxes by inter-municipal agreement; subsections (3) and (4) require the county to relevy and collect all delinquent taxes assigned to it.

3. Tax-foreclosure procedure. Real Property Tax Law Article 11 sets up the redemption period (§§ 1110-1122) and foreclosure procedure (§§ 1123-1137). Section 1136(3) extinguishes prior interests, including mortgages, upon properly-conducted tax foreclosure. Anderson v. Pease, Melahn v. Hearn, and Mittelmark v. County of Saratoga confirm the buyer's title.

The constitutional layer is Mennonite Board of Missions v. Adams, 462 U.S. 791 (1983), holding that a recorded mortgagee is entitled to notice and an opportunity to be heard before government action significantly affects its interest. The opinion uses Mennonite as the rule and U.S. Bank v. Denisco, Zaccaro, U.S. Trust Co. v. Ramapo, First National Acceptance v. Utica, and Garden Homes Woodlands Co. v. Dover to map the rule onto the village-remediation context.

Citations and references

Statutes:
- N.Y. Municipal Home Rule Law § 10(1)(ii)(a)(9-a), (12)
- N.Y. Village Law § 4-412(1)(a), § 4-414, § 5-518(5)
- N.Y. Real Property Tax Law Article 11; §§ 1110-1122 (redemption); §§ 1123-1137 (foreclosure); § 1136(3) (extinguishment of liens); § 1442; § 1442(1), (3), (4) (county collection)

Cases:
- D'Angelo v. Cole, 67 N.Y.2d 65 (1986), village authority for code enforcement
- Lane v. City of Mount Vernon, 38 N.Y.2d 344 (1976), demolition cost recovery
- Calamusa v. Town of Brookhaven, 272 A.D.2d 426 (2d Dep't 2000), emergency exception to notice
- Mennonite Bd. of Missions v. Adams, 462 U.S. 791 (1983), mortgagee notice requirement
- U.S. Bank Nat'l Ass'n v. Denisco, 96 A.D.3d 1659 (4th Dep't 2012), recorded mortgagee's protected interest
- Zaccaro v. Cahill, 100 N.Y.2d 884 (2003), notice requirement application
- U.S. Trust Co. of N.Y. v. Town of Ramapo, 168 Misc. 2d 931 (Sup. Ct. Rockland Co. 1996); First Nat'l Acceptance Co. v. City of Utica, 26 F. Supp. 3d 185 (N.D.N.Y. 2014), demolition notice
- Garden Homes Woodlands Co. v. Town of Dover, 95 N.Y.2d 516 (2000), significant assessment notice
- Anderson v. Pease, 284 A.D.2d 871 (3d Dep't 2001); Melahn v. Hearn, 60 N.Y.2d 944 (1983); Mittelmark v. County of Saratoga, 85 A.D.3d 1359 (3d Dep't 2011), fee simple absolute on tax foreclosure
- In re Killmer, 513 B.R. 41 (Bankr. S.D.N.Y. 2014), tax sale void under bankruptcy stay

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/2015-3_pw_0.pdf

Original opinion text

Municipal Home Rule Law §§ 10(1)(ii)(a)(9-a), 10(1)(ii)(a)(12); Village Law §§ 4-412(1)(a), 4-414, 5-518(5); Real Property Tax Law §§ 1110-1122, 1123-1137, 1136(3), 1442, 1442(1), 1442(3), 1442(4), Article 11

Discussion of certain procedures to abate dangerous conditions of abandoned buildings and to recoup costs of such abatement.

August 4, 2015

William L. Nikas
Village Attorney
Village of Hudson Falls
116 Oak Street
P.O. Box 267
Hudson Falls, New York 12839-0267

Informal Opinion
No. 2015-3

Dear Mr. Nikas:

You have asked several questions relating to the Village's authority with respect to unsafe buildings. You have explained that the Village is faced with several properties that have been abandoned by owners unable to pay the mortgage but on which the mortgagees have not yet begun to foreclose. Under these circumstances, the condition of the property may deteriorate and become unsafe. Your questions relate to the process through which the Village can remediate unsafe conditions and seek reimbursement for its remediation costs from the property owner or another party with an interest in the property.

As background, it is well-established that a village may adopt a local law establishing standards for maintaining safe conditions on privately-owned real property. Municipal Home Rule Law § 10(1)(ii)(a)(12); Village Law § 4-412(1)(a); D'Angelo v. Cole, 67 N.Y.2d 65 (1986); Op. Att'y Gen. (Inf.) No. 98-35. Further, the local law can provide that the village is authorized to perform the necessary maintenance or remediation if the property owner fails to and that the village's costs of remediation may be imposed on the real property owner as an assessment. Municipal Home Rule Law § 10(1)(ii)(a)(9-a),(12); Village Law §§ 4-412(1)(a); 4-414; D'Angelo v. Cole, 67 N.Y.2d 65 (1986); Op. Att'y Gen. (Inf.) No. 85-13. Under the same authority, the local law can provide that the village can demolish an unsafe building and that the property owner must reimburse the village for demolition costs. Lane v. City of Mount Vernon, 38 N.Y.2d 344 (1976); Op. Att'y Gen. (Inf.) No. 98-35; 9 Op. Counsel State Bd. of Equalization & Assessment No. 105 (1992). I understand that the Village has adopted such a local law.

Your first question is whether the Village must provide notice to the mortgagee of the real property abandoned by the owner if the Village intends to maintain, repair, or demolish the property. Of course, a village faced with emergency circumstances that necessitate the immediate demolition or remediation of an unsafe building to protect the public from imminent danger will not have time to, and need not, provide advance notice to the owner or the mortgagee. See Calamusa v. Town of Brookhaven, 272 A.D.2d 426 (2d Dep't 2000). But in the absence of such circumstances, the Village would be well-advised to provide notice to the holder of a publicly-recorded mortgage. Such a mortgagee possesses a legally protected interest in the mortgaged property. Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 (1983); U.S. Bank Nat'l Ass'n v. Denisco, 96 A.D.3d 1659, 1661 (4th Dep't 2012). To the extent the Village's remediation would significantly affect the mortgagee's interest in the property, the Village must provide the mortgagee with notice of its intended action and an opportunity to address the conditions to be remediated. See Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 798 (1983); Zaccaro v. Cahill, 100 N.Y.2d 884 (2003). Demolition of the building on the property likely would significantly diminish the value of the mortgaged property and, if so, notice must be provided to the mortgagee. See U.S. Trust Co. of N.Y. v. Town of Ramapo, 168 Misc. 2d 931 (Sup. Ct, Rockland Co., 1996); First Nat'l Acceptance Co. v. City of Utica, 26 F. Supp. 3d 185 (N.D.N.Y. 2014). Similarly, assessing significant remediation costs against the property likely would require notice. See Garden Homes Woodlands Co. v. Town of Dover, 95 N.Y.2d 516 (2000). The impact of other actions related to remediation of dangerous conditions must be determined on a case-by-case basis; the safest course, however, would be for the Village to provide the mortgagee with notice in instances where notice would be provided to the property owner.

Your second question relates to the Village's ability to recover unpaid remediation costs from the county that serves as the Village's collector of unpaid taxes (the County). As described above, a village is authorized to adopt a local law under which expenses incurred by the village while remediating dangerous conditions on private property that the property owner was obligated but refused to do himself are imposed as an assessment against the real property. Such an assessment, if unpaid, becomes part of the annual village tax levy against the property for the purpose of collection. Village Law § 5-518(5).

Under Real Property Tax Law § 1442(1), a village may request and a county can enact a local law providing that the county will collect delinquent village taxes. I understand that the Village and the County have done so. Under this arrangement, the county relevies the unpaid village taxes upon the real property owner for collection by and owing to the county and pays the village the amount of unpaid village taxes. Real Property Tax Law § 1442(3),(4). Thus, if the Village has adopted a local law that assesses unpaid remediation costs against the real property, delinquent village taxes to be relevied and collected by the County might include costs incurred by the Village in abating dangerous conditions on abandoned property. You have advised that these costs could amount to tens of thousands of dollars. Accordingly, your question is whether the County validly can refuse to relevy the remediation costs and pay the amount of the costs to the Village.

We are of the opinion that the County cannot refuse to relevy the remediation costs and pay the amount of the costs to the Village. Section 1442 of the Real Property Tax Law, authorizing a county to adopt a local law providing for the collection of delinquent village taxes, does not authorize a county that has adopted such a local law to choose which unpaid items included in a village tax bill to relevy and collect. We are of the further opinion, however, that the County can refuse to collect all of the Village's delinquent taxes in the future unless the Village agrees not to include such special assessments in its tax roll. To do so, the County can simply repeal its local law providing that it will collect the Village's delinquent taxes.

Your third question is whether a mortgage lien will be extinguished by the sale of real property conducted after the village tax, including a special assessment for remediation costs, is relevied by the County and remains unpaid. As explained below, we are of the opinion that the mortgage lien generally will be extinguished.

Article 11 of the Real Property Tax Law establishes the procedure for the enforcement of the collection of delinquent property taxes. Under this procedure, the property owner and other parties with an interest in or lien upon the property are given a period of time in which to redeem the property by paying the delinquent taxes and associated penalties. Real Property Tax Law §§ 1110-1122. If the owner or another interested party does not redeem the property within the redemption period, the County can begin a proceeding to foreclose on the property. Real Property Tax Law §§ 1123-1137. By following this procedure, the mortgage interest is extinguished and the County will obtain full title to the property. Real Property Tax Law § 1136(3); Anderson v. Pease, 284 A.D.2d 871 (3d Dep't 2001). Assuming the County complies with all legal requirements, a purchaser of the real property at a subsequent tax sale will obtain title in fee simple absolute. Melahn v. Hearn, 60 N.Y.2d 944, 946 (1983); Mittelmark v. County of Saratoga, 85 A.D.3d 1359, 1360 (3d Dep't 2011); cf. In re Killmer, 513 B.R. 41 (Bankr. S.D.N.Y. 2014) (tax sale void when conducted while property subject to bankruptcy stay).

The Attorney General issues formal opinions only to officers and departments of state government. Thus, this is an informal opinion rendered to assist you in advising the municipality you represent.

Very truly yours,

KATHRYN SHEINGOLD
Assistant Solicitor General
in Charge of Opinions