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Volume 4 - Opinions of Counsel SBEA No. 8

Opinions of Counsel index

Assessments, generally (notice of increase) (escrow accounts) - Real Property Tax Law, § 510:

Notices of increased assessments sent pursuant to section 510 of the Real Property Tax Law must be sent to the property owner and not the mortgagee bank which pays the taxes from escrow accounts.

Section 510 of the Real Property Tax Law, as amended by Chapter 284 of the Laws of 1974, requires assessors in cities (except New York City), towns and those counties which have county assessment, to mail notices of increased assessments to property owners not later than ten days prior to grievance day (New York City, exempted from this statute, has similar provisions in its city charter). It is an important part of the assessment process that property owners receiving an increased assessment be notified of such fact and of their right to appeal such assessment to the board of assessment review and the courts.

In recent years, a practice has developed whereby owners of mortgaged property pay their taxes as part of, or together with, their mortgage payments to the mortgagee bank, which holds such money in escrow until such time as the taxes become due when the bank pays the taxes out of such accounts. We have previously stated:

Where an escrow account arrangement exists with respect to mortgaged property, and the owner of the real property makes a written request that his tax bills be sent to the mortgagee bank, this request should be honored by the tax collector. (3 Op.Counsel SBEA No. 120)

However, while we recognize the merit in this escrow arrangement to the property owner, mortgagee, and municipality alike, the notice of increased assessment must be sent to the owner.

Accordingly, we do not feel it is proper to list property on the assessment and tax rolls in the name of the owner in care of the bank’s address. Rather, the roll should reflect the owner’s name and address. A bank code may be added to the description to facilitate the mailing of tax bills, but until such time, all notices should be sent directly to the property owner. Those municipalities using computerized rolls should have little difficulty in implementing such a procedure, nor should those municipalities using handwritten rolls be unable to proceed in this manner.

February 24, 1975

NOTE:  Construes law prior to L.1989, c.440.