Sheehan v. County of Suffolk, 67 N.Y.2d 52 (1986)
A real property tax scheme providing notice to the taxpayer of taxes due, notice of delinquency, a tax lien sale, a redemption period, and notice of impending expiration of the redemption period before resale at public auction, with the county retaining any surplus, does not violate due process or constitute a taking without just compensation.
Summary
This case addresses whether a county’s tax foreclosure procedures, which involve purchasing tax liens without competitive bidding and retaining surplus funds after the property’s resale, violate the Due Process Clauses of the State and Federal Constitutions or constitute a taking without just compensation. The Court of Appeals held that such procedures are constitutional, emphasizing the property owner’s responsibility to be aware of relevant statutes and the sufficiency of the provided redemption period. The court reasoned that due process is satisfied when taxpayers receive notice and an opportunity to be heard regarding property valuation, and a lengthy redemption period mitigates any potential unfairness arising from the county’s retention of surplus funds.
Facts
Plaintiffs in Sheehan v. County of Suffolk and MacKechnie v. County of Sullivan failed to pay their real property taxes. Suffolk County notified the plaintiffs of their tax delinquency and impending tax lien sale. Suffolk County purchased the tax liens itself at a sale where it was the only allowed bidder. Plaintiffs were notified before the end of the 36-month redemption period. After the redemption period expired and the plaintiffs failed to redeem, the counties obtained deeds to the properties and later sold them at public auctions, retaining the surplus. Orange County retained the deed to one property and refused redemption.
Procedural History
In Sheehan v. County of Suffolk, Special Term dismissed the complaint upon cross-motions for summary judgment, and the plaintiffs appealed directly to the Court of Appeals. In MacKechnie v. County of Sullivan, Special Term dismissed the plaintiff’s action for failure to state a cause of action, and the plaintiffs took a direct appeal to the Court of Appeals.
Issue(s)
Whether a county’s failure to inform property owners that tax liens would not be sold at competitive bidding and that owners would not receive any surplus from the ultimate sale of the properties violated the Due Process Clauses of the State and Federal Constitutions.
Whether permitting the counties to purchase tax liens without competitive bidding and then sell the properties without turning over the surplus to the owners constitutes a taking without just compensation.
Holding
No, because an owner of property is charged with the knowledge of statutory provisions affecting the disposition of their property, and the taxpayers received sufficient notice and opportunity to redeem their property.
No, because taxpayers are given a sufficient redemption period to either pay the taxes and penalties or sell the property subject to the lien and retain the surplus.
Court’s Reasoning
The Court reasoned that property owners are presumed to know the statutory provisions governing their property. Therefore, the plaintiffs’ failure to understand the implications of non-payment, including the potential for non-competitive bidding and the county’s retention of surplus funds, was their own responsibility. The Court emphasized that “an owner of property is charged with knowledge of statutory provisions affecting the control or disposition of his or her property.”
The Court cited Texaco, Inc. v. Short, 454 U.S. 516, 531, and Congregation Yetev Lev D’Satmar v. County of Sullivan, 59 N.Y.2d 418, 423 to support its assertion that owners are responsible for knowing the law. The Court also found that due process does not require that every taxpayer be advised of all possible consequences of default, as long as they receive notice and an opportunity to be heard on the valuation of their property.
The court highlighted that the three-year redemption period provided a sufficient opportunity for the taxpayers to reclaim their property. The court cited Chapman v. Zobelein, 237 U.S. 135 and Turner v. New York, 168 U.S. 90, 94, noting that statutes allowing the state to retain excess funds upon public sale have been upheld when coupled with a lengthy redemption period. The Court distinguished United States v. Lawton, 110 U.S. 146, noting that the statute in that case required the return of any surplus.
Finally, the Court stated that there is no constitutional requirement for tax liens to be sold through competitive bidding. Citing Saranac Land & Timber Co. v. Comptroller of N. Y., 177 U.S. 318, 326-328, the Court acknowledged that legislatures can permit localities to restrict tax lien sales to governmental bodies in response to abuses by land speculators.