Sec. 648.3. Payment of tax after mortgage for an indefinite amount is recorded

Tax Law, § 256

(a) If for any reason the payment of the taxes described in Part 642 of this Title is first tendered after such a mortgage has been recorded, the amount of taxes due must be computed based upon the higher of:

(1) the fair market value of the mortgaged property on the date that the mortgage was executed; or

(2) the portion of the amount secured by the mortgage on the date that the mortgage was executed which is determinable by the terms of the mortgage;

unless the commissioner grants an order authorizing the use of a sworn statement of maximum amount, as described in subdivision (b) of this section. Provided, however, in no event shall such maximum amount set forth in such statement be less than the amount described in paragraph (2) of this subdivision.

(b) Where the commissioner finds that the failure to pay such taxes was due to an honest misconception on the part of the recording officer or the mortgagor or mortgagee as to the nature of such instrument and its taxability, such as whereby the instrument was not recognized as a mortgage at the time it was recorded or was recognized as a mortgage but not a mortgage for an indefinite amount, the commissioner may grant an order expressly authorizing use of a sworn statement of maximum amount for the purpose of computing the taxes due. The maximum amount set forth in such sworn statement must be such amount secured or which under any contingency may be secured by the mortgage as of the date the mortgage was executed. Provided, however, such amount cannot be less than that portion of the amount secured on the date the mortgage was executed which is determinable by the terms of the mortgage. The amount due must include the applicable interest and penalties as provided in Part 653 of this Title.