Bulletin: NY000721

Dear Associates:

On May 9, 2025, New York State adopted legislation that revised Section 6 of the New York State Tax Law providing that when the New York State Department of Taxation and Finance files a tax warrant with the NYS Secretary of State, such filing constitutes constructive notice of the lien of the tax warrant in all 62 counties throughout New York State.  Section 6 of the Tax Law, as revised, takes effect on July 1, 2025.  Tax warrants can be electronically filed with the New York Secretary of State, and if electronically filed, can be searched in the State Tax Warrant Notice System.  Note: This is an unofficial database for reference only, and you will need to obtain an official and reliable search of the public record from the NYS Secretary of State.

As you are aware, tax warrants are enforced as judgments and once docketed, can be enforced against the judgment-debtor’s real property.  Starting July 1, 2025, all policy-issuing agents will need to conduct searches for tax warrants with the County Clerk’s Office of the county in which the subject premises are located AND the New York State Secretary of State.

Stewart Title Guaranty Company is taking the position that as far as lien attachment is concerned, all tax warrants that have been filed with the New York State Secretary of State prior to July 1, 2025 are treated as docketed as of that date and if possible, attached as liens as of that date.  You are encouraged to place the following note, for information only, beneath the exception in the title report for judgments and liens:

NOTE: As of July 1, 2025, tax warrants filed with the New York State Secretary of State constitute liens against real property located in all counties within New York State.  Searches for tax warrants will be continued with the New York State Secretary of State prior to closing, and additional exceptions may be raised.

We have already received several questions as to how the revised statute will work in practice, and the following examples are illustrative:

Scenario #1: John Doe owns real property located within New York State.  There is a tax warrant that was filed against John Doe with the Secretary of State on June 1, 2025.  That tax warrant will be treated as a lien that attached on July 1, 2025 (the date upon which this legislation becomes effective).

Scenario #2: John Doe owned real property located within New York State and executed a deed for no consideration on January 1, 2023.  A tax warrant was filed against John Doe with the New York State Secretary of State on August 1, 2024.  That tax warrant will be treated as a potential lien against the subject premises that must be addressed (the same as any other judgment docketed shortly after a no consideration conveyance has taken place).

Scenario #3: John Doe owned real property located within New York State and executed a deed for good and valuable consideration, transferring title to Jane Smith on January 1, 2023.  A tax warrant was filed against John Doe with the New York State Secretary of State on August 1, 2024.  That tax warrant does not attach as a lien against the property (the same as a judgment entered against a prior owner after a prior owner has sold the subject premises for good and valuable consideration).

Searching the State Tax Warrant Notice System will likely mean that examiners may need to charge additional search costs.  Policy-issuing agents can likely include these costs in the title bill for policies being issued in Zone 1.  Policy-issuing agents will likely not be able to include these additional costs in the title bill for policies being issued in Zone 2 though.

As a reminder, our underwriting guidelines prohibit the holding of escrowed funds in connection with New York State tax warrants or federal tax liens.  All New York State tax warrants and federal tax warrants which are liens against the subject premises (or which may become liens due to a no consideration conveyance having taken place or under other applicable statute or circumstance) must be paid from proceeds at closing.

In the event you have any questions regarding the above, please contact the Stewart Title Legal Department at 212-922-0050 and speak with any Underwriting Counsel.