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Volume 5 - Opinions of Counsel SBEA No. 123

Opinions of Counsel index

Correction of errors (refund) (insufficient description of parcel); Taxes (cancellation) (refund) (insufficient description of parcel) - Real Property Tax Law, §§ 556, 557, 1026, 1030:

Where neither the purchaser of real property at a county tax sale nor the county which sold such property is able to locate the parcel due to an inadequate description, the initial tax sale is subject to cancellation under section 1026 of the Real Property Tax Law. A refund of the purchase price may be paid to the tax sale purchaser pursuant to section 1026 or 1030. No refund for taxes paid in past years on such inadequately described parcel is available pursuant to Title 3 of Article 5 of such law (“Correction of Errors”). Current year’s delinquent taxes on an inadequately described parcel may be cancelled by the county treasurer pursuant to section 557 of such law.

We have received an inquiry from an individual involving property which she acquired at a county tax sale several years ago. Specifically, she states that neither she nor the county has been able to locate this parcel due to an inadequate description of the same, that she has asked for a refund on all taxes paid by her on the property, and that the county has informed her that she must prove there is no such parcel in order to secure such a refund.

The initial tax sale to the individual in question may itself be subject to cancellation, and the purchase money refundable. Section 1026(2) of the Real Property Tax Law provides that the county treasurer, having discovered that a tax sale was invalid, shall “on application of a person having an interest therein at the time of the sale, on receiving proof thereof, cancel the sale and refund the purchase money and interest thereon to the purchaser, his representatives or assigns.” A purchaser at the sale is a proper applicant (People v. Woodruff, 57 App. Div. 342, 68 N.Y.S. 100). An insufficient description of the property involved is a ground for cancellation under this section (see, 1936, Op.Atty.Gen. 195). Implementation of section 1026 requires that the party claiming under the tax deed deliver to the county treasurer an instrument of abandonment of any claims under the tax deed, save the right to a refund.

Section 1030 of the Real Property Tax Law may also be utilized to secure a purchase money refund. Subdivision one of this section reads:

Whenever any purchaser under a sale held pursuant to section ten hundred six of this chapter is unable to obtain possession of the real property purchased by him, or when the county treasurer has cancelled any such sale, or when any such sale has been cancelled by a judgment of a court of competent jurisdiction, in either case by reason of an error or irregularity in the assessment of the real property or in the levying of a tax thereon, or in proceedings for the collection thereof, the board of supervisors of the county shall refund the purchase money paid, with interest, in the same manner as are other claims against the county.

Regarding a refund of taxes already paid on the property in years passed, a statutory remedy would not appear to be available. Administrative refund of property taxes erroneously assessed and collected is governed exclusively by Title 3 of Article 5 of the Real Property Tax Law, the so-called “Correction of Errors” law (see, Real Property Tax Law, § 556). Our review of the facts in the given case would indicate that this statute is not applicable. That is, the type of error made does not fit within any of the definitions of correctable errors contained in section 550. Consequently, it is our opinion that a taxpayer in such a situation would seem to be left to his remedy at law, in the form of an action for money had and received. It has been held that the New York rule permits recovery by a taxpayer where he voluntarily pays taxes by mistake even though such mistake arose from want of care on the taxpayer’s part. This right to recovery is based on the equitable principle that money should be restored to a taxpayer where it has been paid under plain, palpable mistake (Loconti v. The City of Utica, 61 Misc.2d 855, 306 N.Y.S.2d 772).

The individual in question also states that she has stopped paying the taxes on the property in question, and that as a result the county will again sell a lien against the property for these delinquent taxes. In the event the initial tax sale is not cancelled, section 557(2)(a) of the Real Property Tax Law offers administrative relief from the burden of current year’s taxes charged against inadequately described property:

The county treasurer shall examine the accounts of arrears of taxes received from the collecting officers of each city and town and shall reject all taxes charged on real property so inaccurately described that the collection of taxes by the sale of such real property cannot be enforced. . . .

December 8, 1976

Updated: