Getting Your Money Back from the City of Buffalo In Rem Foreclosure

Getting Your Money Back from the City of Buffalo In Rem Foreclosure

The City of Buffalo and other local cities and towns have the ability to take your property if you are delinquent on taxes, user fees, sewer fees, or water bills. They do this through an expedited foreclosure process known as an “in rem” proceeding. The City of Buffalo will file one massive lawsuit and put the owners of each property on notice.

If the owners don’t contest the foreclosure, the City of Buffalo will take the property and sell it at auction. The proceeds from the auction will be put toward the money owed and any money left will be deposited with the Erie County Comptroller.

And there the money will sit. For years. Unless you follow the very peculiar procedure necessary to get it back.

How does it work?

Now let’s say you owned a house that was worth about $50,000. For one reason or another, the sewer bill went unpaid and the City of Buffalo took the house through the in rem proceedings. You owned the house without a mortgage, or with a small mortgage that you could easily pay off. The sewer will, plus all late fees, was only $5,000. When the house goes up for auction, someone buys it for $50,000. What happens to the $45,000 difference between what the City received at the sale and what you actually owed?

You would think that the money would be returned to you. It was, after all, your house. It is not that easy. Remember, we are dealing with local government and New York law here. Nothing is easy.

So what do you have to do?

First, you have to file a Notice of Claim for Surplus Money with the Erie County Clerk.

Then, First, you have to wait until the Erie County Comptroller receives the money from the City of Buffalo. This takes months.

Next, you have to request a Certificate of Deposit from the Erie County Comptroller and a Certificate of Claims from the Erie County Clerk.

Then, you have to figure out who was actually served by the City of Buffalo when they foreclosed on the property. This will come in handy later.

You will also need to get a title search showing any liens on the property. This can take a week or two and cost a few hundred dollars.

Oh, and don’t forget a copy of the judgment of sale from the in rem auction. You will need a copy of the judgment plus some of the information from it.

Once you have collected all of this stuff, the next step is to compile it into a motion and ask the court to disburse the money to you. You will have to serve a copy of the motion on everybody who was served in the initial in rem proceeding.

Finally, if you have done everything right, the judge will theoretically issue an order directing the Erie County Comptroller to pay you the money from the sale of your house.

That sounds insane!

Sound complicated and confusing? It is. I used Erie County and the City of Buffalo as an example, but the process is similar throughout the region. If you lost real estate due to government foreclosure and the local government is holding on to extra money from the sale, give me a call. I would be happy to guide you in the right direction. If you don’t want to deal with it, I will happily do it for you.