NY Tax L § 258 (2021)
2021 New York Laws TAX - Tax Article 11 - Tax on Mortgages 258 - Effect of Nonpayment of Taxes.

§  258. Effect of nonpayment of taxes. 1. No mortgage of real property   shall be recorded by any county clerk or register, unless there shall be   paid the taxes imposed by and as in this article provided.  No  mortgage   of  real  property which is subject to the taxes imposed by this article   shall be released, discharged of record or received in evidence  in  any   action or proceeding, nor shall any assignment of or agreement extending   any  such  mortgage be recorded unless the taxes imposed thereon by this   article shall have been paid as  provided  in  this  article.  Provided,   however,  except  as  otherwise  provided  in  subdivision  two  of this   section, in order to obtain a release or discharge of record  where  the   mortgagor  is  not  liable  for the special additional tax imposed under   subdivision one-a of section two hundred fifty-three  of  this  chapter,   such  mortgagor  or  any subsequent owner of the mortgaged property or a   part thereof may pay the tax imposed under such  subdivision  one-a  and   penalty,  and  may  either  apply  for  the  credit allowable under this   chapter for payment of such additional tax or may maintain an action  to   recover the amounts so paid against any person liable for payment of the   tax   or  any  subsequent  assignees  or  owners  of  such  mortgage  or   consolidated mortgage of which such mortgage  is  a  part,  as  if  such   amounts  of  tax and penalty were a debt personally owed by such persons   to the mortgagor or subsequent owner.  No judgment or final order in any   action  or  proceeding  shall  be  made  for  the  foreclosure  or   the   enforcement  of any mortgage which is subject to any tax imposed by this   article or of any debt or  obligation  secured  by  any  such  mortgage,   unless  the  taxes  imposed  by  this  article  shall  have been paid as   provided in this article; and, except otherwise provided in  subdivision   two of this section, whenever it shall appear that any mortgage has been   recorded without payment of a tax imposed by this article there shall be   added  to  the tax a sum equal to one-half of one per centum thereof for   each month or fraction of a month for the period that  the  tax  remains   unpaid  except  where  it  could  not be determined from the face of the   instrument that a tax was due, or where an advance has been  made  on  a   prior  advance mortgage or a corporate trust mortgage without payment of   the tax, in which case there shall be added to the tax a  sum  equal  to   one  per  centum  thereof  for each month or fraction of a month for the   period that the tax remains unpaid. In any case where a mortgage of real   property subject to a tax imposed by this article  has  heretofore  been   recorded or is hereafter recorded in good faith, and the county clerk or   register has held such mortgage nontaxable or taxable at one amount, and   it  shall  later  appear  that  it  was  taxable or taxable at a greater   amount, the commissioner of taxation and finance may remit the penalties   in excess of one-half of one per centum per month.2. In any city in this state having a population  of  one  million  or   more,  in  order  to  obtain  a release or discharge of record where the   mortgagor is not liable for the special  additional  tax  imposed  under   subdivision  one-a  of  section two hundred fifty-three of this chapter,   such mortgagor or any subsequent owner of the mortgaged  property  or  a   part  thereof  may pay the tax imposed under such subdivision one-a with   accrued interest and any penalties, and may either apply for the  credit   allowable  under  this chapter for payment of such additional tax or may   maintain an action to recover the amounts so  paid  against  any  person   liable  for  payment of the tax or any subsequent assignees or owners of   such mortgage or consolidated mortgage of which such mortgage is a part,   as if such amounts of tax and penalties were a debt personally  owed  by   such  persons to the mortgagor or subsequent owner. No judgment or final   order in any action or proceeding shall be made for the  foreclosure  or   the  enforcement  of any mortgage which is subject to any tax imposed by   this article or of any debt or obligation secured by any such  mortgage,    unless  the  taxes  imposed  by  this  article  shall  have been paid as   provided in this article; and whenever it shall appear that any mortgage   has been recorded without payment of a tax imposed by this article there   shall  be  added  to the tax interest on the amount of tax not paid. The   commissioner of taxation and finance shall set the rate of  interest  to   be  paid  on any underpayment of tax imposed by this article at the rate   of interest  prescribed  in  subsection  (e)  of  section  one  thousand   ninety-six of this chapter for underpayments of tax. Such interest shall   be compounded daily. In addition to interest there shall be added to the   tax  a  penalty  of  ten  percent of the amount of tax due for the first   month of delay in payment of the tax plus two percent of the  amount  of   tax  for  each month of delay thereafter, up to a maximum of twenty-five   percent, where  it  could  not  be  determined  from  the  face  of  the   instrument  that  a  tax was due, or where an advance has been made on a   prior advance mortgage or a corporate trust mortgage or a re-advance had   been made on a mortgage where the original indebtedness it  secured  had   been  paid  in  whole  or  in part. In any case where a mortgage of real   property subject to a tax imposed by this article  has  heretofore  been   recorded or is hereafter recorded in good faith, and the county clerk or   register has held such mortgage nontaxable or taxable at one amount, and   it  shall  later  appear  that  it  was  taxable or taxable at a greater   amount, the commissioner of taxation and finance may remit the penalties   but not interest.