New-York tribune., 1906-05-30
RECORDING TAX FAULTS
Is 1T CONSTITUTIONAL !?
Construction Leaues Meaning an
Doubt, Says Expert.

Many realty experts Of the opinion that the
wording OF many provisions OF the heoording Tax
law which will be IN effect July !. is so faulty
as 10 leave their meaning in doubt. Moreover.
according these same experts. the law does not
rpecify whether not mortgages recorded under
,se Mortgage Tax law OF 1906 may escape the
General Property Tax law by being rerecorded.
There are many other important omissions in the
Recording Tax measure, and owing TO certain
omissions grave doubts exist in realty circles
the constitutionality OF the act
E NJ. Bliven. lawyer and an expert on laws
Affecting real estate in this state. asked yes
terday by Tribune reporter whether mortgages
recorded prior 10 July ! next be brought under
tie Recording Tax law. and said:
While Section 2sS ot the Recording Tax law APP
nseT July i iss' It viii be Seen that the section
makes no mention as TO the date Of the execution
corded. II is that there is no expressed pro-
next except prior advanced mortgages; Whether
they or are not subject TO or may be brought
entitled 70 exemption from other taxation by rea;
II in The be new new law. kiS'''''''-'
But does the absence Of any such expressed pro-
vision prevent bringing within the Recording Tax
law mortgages recorded before the time when the
law takes effect was asked.
This question can only be safely answered in the
future" Mr. Bliven replied. 1t VIII have TO be
tried out"
Continuing. Mr.. Bliven said:
Holders OF mortgages recorded prior to July l.
lS6 were permitted by the act OF 1905 10 come
mortgage had been executed after July ! ls6. But
section 2ls Of the OF 1905. providing for opoha
also the annual tax provision which would seem
10 indicate-but by inference only-thst all mort
cages recorded prior 10 July ]. 1906, become sub
1ect TO the general property tax law and cannot
be recorded anew. This seems TO be the general
one large title company has publicly announced
which tax has been paid under the law Of 1905.
are SUBJECT 10 sGch 5 IaAanon as may afIect mem mem
have ~Ctrained ron giving too hastv opinion.
Many lawyers who attend TO the real estate affairs
OF large trust estates and lenders on mortgages,
hold a contrary view. They think that the act may
be Unconstitutional 50 far as il deprives holders
Of mortgages recorded or 10 be recorded prior 10
July ]. spe Of The benefit OF the new law. partic-
ulafly those who have availed themselves of the
priv .lege option OF coming IN under the law OF
1915, and have Te!led o. future payments or al
Tboga w6o have never been called upon 10 pay
the general tax We're willing 70 pay the half of !
per cent. bGt now may be obliged TO pay the full
i 5r III n cents for each 500 and each re,
raining major fraction thereof OF principal debt or
obligation wiz have 70 be paid for the entire exist
,noa Of the mortgage. whether it be for one OF any
Concerning The right to rerccord or record anew
difficulties will he mot with. There is considerable
doubt whether or not a register can refuse
Agreements can now be made providing for the
Payment Of the recording tax ny either the ndi-
foiIionai parts between them
The question Of usury and the uncollectibility Of
This is feature for Section Ss of the law u 1865
which declared any agreement 10 pay tax by lndl-
Nidual m0rtEaEOr TO be uSLrious and the debt un-
oollcctlle has been repealed so that in the draw
in. Of contracts for property the mortgagor may
be required 10 pay the entire tax.
There VIII be no occasion now Tor even an ap-
parent evasion of the law by any increase in the
rate Of 10 he paid the debt. so that the
borrower and not tie lender Will n reality have TO
pay the tax.
Following up the law on these lines. our lead
Ing title companies are now Offering money
duced rates interest. Some Of the corporations
and certain wise individuals who have sought 10
eVade the tax law by having their mortgages made
payable demand and simultaneously entering
into agreement extending the time for payment
of the obligation. which Of course does not appear
record. will have pay the mortgage tax under
law existing time Of recording before the
same can be satisfied and discharged Of record. as
the constitutonaty of the present law has been
upheld by she Court of Appeals