12.28 B. New Title Free And Clear But Subject To

• Jurisdiction: New York

B. New Title Free and Clear but Subject to

A deed from a county treasurer creates an absolute estate in fee¹⁹³² subject to (1) county, town, city, village or state liens for other taxes;¹⁹³³ (2) granted easements affecting the land that existed when the tax was levied;¹⁹³⁴ (3) restrictive covenants;¹⁹³⁵ (4) rights of redemption of occupants or others; and (5) cancellation. Cancellation¹⁹³⁶ in this sense means cancellation for prior payment of the taxes,¹⁹³⁷ for an illegal levy and for defects in the proceedings affecting the “jurisdiction upon constitutional grounds.”¹⁹³⁸

Despite the apparent absoluteness¹⁹³⁹ of these definitions of tax titles, certain interests (in addition to the statutory exceptions) may not be cut off by the new title:

1. Lands owned by sovereign nations used to house their representatives to the United Nations were held subject to the jurisdiction of the court, but the court chose not to exercise that jurisdiction. The court was persuaded that, if jurisdiction were exercised, the executive branch of the federal government would be embarrassed in its conduct of foreign affairs. The court contented itself with some scathing comments about foreigners being permitted to live here tax-free and being permitted to ruin some of our finest villages.¹⁹⁴⁰

2. State lands are exempt from sales in any action for the foreclosure of a tax lien under either proceeding permitted in RPTL Article 11.¹⁹⁴¹

3. While lands owned and used as a city park are not subject to tax foreclosure proceedings,¹⁹⁴² otherwise tax-exempt properties can be foreclosed if the owner claiming the exemption fails to protect its interest.¹⁹⁴³

4. Interests of the federal government are not cut off by a tax deed unless they are subordinate to the lien of the tax under federal law and federal decisions.¹⁹⁴⁴ Mortgage interests held by the federal government (other than those taken by assignment) have been held to be immune from the ordinary “super priority” of real estate taxes.¹⁹⁴⁵ Similarly, estate tax liens and judgments held by the federal government, which become liens before the lien date of the real estate tax, retain their priority.¹⁹⁴⁶

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Notes:

^[1932] . RPTL § 1136(2)(d).

^[1933] . Segar v. Youngs, 58 A.D.2d 368, 396 N.Y.S.2d 912 (3d Dep’t 1977), aff’d, 45 N.Y.2d 568, 410 N.Y.S.2d 801 (1978); Intercounty Operating Corp. v. Terry, 181 Misc. 362, 47 N.Y.S.2d 496 (Sup. Ct., Suffolk Co. 1943) (before a 1979 amendment to RPTL § 1020, a court cut off a village tax lien because...