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Council discusses next steps in foreclosure process

The common council and controller discussed the progress of the city’s foreclosure process at a committee meeting on Tuesday. Council members looked at a list of just under 400 properties whose owners have yet to either pay off their back taxes or enter into a payment agreement with the city.

According to Controller Matthew Agresta, the purpose of providing the list was so that the council could review it and ask questions, but the council could not make any changes to the list.

“All you’re doing is reviewing it…this list is what’s going, unless we find out that somebody that actually paid, we didn’t remove. That’s the only change that’s going to be made at this point,” said Agresta.

Agresta said he hopes to  submit the list to the Montgomery County court by the end of the week. The court will make the final decision to transfer ownership of the listed properties to the city.

There was some concern expressed by Agresta and other council members as to whether County Judge Felix Catena would be available to make a decision before the end of the year. Agresta said he would look into the possibility of having County Supreme Court Judge Joseph Sise make a decision on the properties.

Alderman Ron Barone brought up a case he was familiar with where an owner whose property is being foreclosed on is trying to sell the property before the property goes to auction sometime next year.

Agresta said that by law, the city cannot accept any payments for back taxes from the properties on the list from November 20, the date of last redemption, until the date the county court decides to transfer ownership of the property to the city.

“If he sold it tomorrow…that new owner would lose interest once we took ownership,” explained Agresta.

Council members discussed the possibility of allowing previous owners to re-claim their properties before they were auctioned off by paying the taxes in full, once the city had taken ownership. Agresta said he would look into what was involved with re-conveying properties to their previous owners.

Alderman Elect Jim Martuscello added that based on his recollection of previous foreclosure auctions, that once a property has been listed for auction, the auction provider would still seek to collect a buyer’s fee if the property was transferred to someone else by the city before the auction took place.

Last week, the council voted to select NYSAuctions.com (a partnership between Haroff Auction and Realty and Absolute Auctions and Realty) to handle the city’s upcoming foreclosure auction sometime next year. However, a contract with the city has yet to be negotiated and signed.

Alderwoman Diane Hatzenubuhler said she wants to make sure that there will be a lease agreement ready to present to occupants of foreclosed properties as soon as the city takes ownership. The lease would cover the time between when the occupied properties are acquired by the city to the time it is acquired by a new owner.  She said she is concerned that some landlords may continue to pressure tenants to pay rent to them even during the time the city has ownership.*

Council members agreed to look at a draft lease agreement provided by Corporation Counsel Gerard DeCusatis with a goal of approving the agreement’s wording by the last regularly scheduled common council meeting on December 15.

* This paragraph has been edited to clarify the intent of the lease agreement is to cover the time period when the city has ownership of the properties

About Tim Becker

Tim Becker is the owner of AnthemWebsites.com LLC which publishes The Compass. He serves as both editor and a writer.

7 Responses to Council discusses next steps in foreclosure process

  1. Rob Millan says:

    “Alderwoman Diane Hatzenubuhler said she wanted to make sure that there was a lease agreement ready to present to occupants of foreclosed properties as soon as the city took ownership.”

    -How? How can the City compel the owner of private property to enter into agreement, much less enforce, any contract between them and a tenant? Answer: it cannot.

    That this would even be considered as a remedy is almost scary and may actually deter people from buying into Amsterdam real estate.

    • Tim Becker says:

      Once the ownership of the property is transferred to the city, the original property owner is out of the picture. Whether the occupant of the property is the former owner, or a tenant of the former landlord, they are living in a city owned building once the court transfers ownership, right? The lease agreement they are talking about is for after the city takes possession, not before.

      One thought that came to mind, however, is that if the occupants say “no” to the agreement, what recourse is there? Technically the city could evict them. But is the city realistically going to follow through with that given the time and expense and given that they are going to auction them off in a matter of months anyway?

      • Rob Millan says:

        Tim,
        To clarify- by ‘owner’ I meant the new owner, not the city or previous owner. I do not believe the new owner (as the ‘buyer’) can be compelled by the City (as the ‘seller’) to force a contact between the new owner and the tenant.

        Also, I do not see how ‘the city could evict’ a tenant who disagrees with an agreement between tenant and the new owner if the City is not a party to that agreement, though maybe you can clarify that?

        Make no mistake, there are far better ways to encourage owner occupancy, and I’ll assume that’s one thing Hatzenbuhler is attempting to market. And laudable at that. As I’ve mentioned in the past, other cities have brokered agreements that incentivize owner-occupied properties better than this.

      • Tim Becker says:

        Based on my understanding, the lease agreement would just cover the few months between when the city takes ownership of an occupied property and when it gets auctioned off. It wouldn’t extend past the sale to the new owners. Sorry if I wasn’t clear on that. The idea is to hold the auction in the spring. So if the city gets the properties in January, there may be a few months that the city has to be landlord for the folks living in some of those properties (not sure how many.) Although always possible a few of the occupied properties might not sell, and so then the lease would have to be extended.

        That’s why I said what I did about eviction. If the city is only a landlord for a few months, it may not be feasible to evict someone who doesn’t pay their rent. It’s going to be on the tenant’s honor, really, to continue to pay rent.

        I’ve made an edit to the story to be more clear that the intent of the lease was to cover the time the city owns the property only.

  2. Rob Millan says:

    “[T]he lease agreement would just cover the few months between when the city takes ownership of an occupied property and when it gets auctioned off.” Thanks, that definitely helps.

    I know there are some pretty tight rules in place as far as lease agreements between landlords/tenants being extended upon transfer of ownership. NYS says the landlord ‘must agree to renew the lease and a tenant may be subject to eviction at the end of the lease term.’ So at lease-end, it appears to be up to the owner as to whether or not they want to keep their tenant and up to the tenant as to whether or not they want to stay, although I know proper notice is required by both parties if not renewing.

    With few exceptions, NYS tends to be very tenant-leaning in landlord-tenant legal issues.

    https://www.ag.ny.gov/sites/default/files/pdfs/publications/Tenants_Rights.pdf

  3. diane hatzenbuhler says:

    Rob,

    My intent is to make sure that the city receives the rent money Jan 1st as opposed to the former owners.
    I base this on some slumlords who send their money collectors around to get their cash. Just want to make sure they are paying the proper entity. Some of these slumlords run real pig styes. In all cases the lease is month to month and will come with an understanding that there will be an auction in May or June. Since some of these places are in such horrible condition, it would be best for the tenant to vacate before the auction. By doing this codes can go thru and complete a thorough assessment of the property before the auction so potential buyers have an idea of the issues.

    • Rob Millan says:

      Diane, the collector isn’t the issue; the landlord is. In fact, a lot of landlords hire property management companies to manage the process of collecting rents, background checks, minor repairs, etc. Also, you cannot have a lease and be ‘month-to-month.’