Title 2 Department of Audit and Control - Chapter II Municipal Affairs - Subchapter E. Administration of Funds Paid into Courts of Record - Part 70 Administration of Funds Paid into Courts of Record - s 70.9 Investments.

Published: 2021-01-15

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A county treasurer may invest court and trust funds in his charge in securities that are legal investments for trustees, subject to the following conditions:

(a) Loans upon real property should not be made:

(1) where property is encumbereds and/or situated outside the county in and for which the funds were paid into court;

(2) by uniting the funds of separate and distinct actions, proceedings or accounts;

(3) for more than 50 percent of the value of the property;

(4) without an order of the court having jurisdiction of the funds distinctly specifying the securities to be taken. This order should provide for payment of the mortgage recording tax. (See Tax Law, art. 11).

(b) Loans upon real property shall not be made until the treasurer is furnished with:

(1) a bond and mortgage containing interest, insurance, tax and assessment clauses;

(2) an abstract of title of such property showing the title to be perfect in the borrower and free and clear of all incumbrances or, with a title policy of some responsible guaranty company;

(3) a tax search indicating that all taxes and assessments have been paid to date;

(4) an affidavit of title in the form prescribed by the State Comptroller;

(5) a fire insurance policy in the amount of the loan, the policy not to contain and co-insurance clause, which must at all times be assigned to the treasurer as collateral for the loan.

(c) The county treasurer shall require all interest and all taxes and assessments on property covered by a loan to be paid promptly when due. When the interest on an investment shall not have been paid within 30 days after the same shall become due and payable, the county treasurer shall immediately notify the State Comptroller of such default, together with any reason within his knowledge why such interest was not paid.

(d) The county treasurer shall require each policy of insurance on property covered by loans to be succeeded by a similar policy immediately upon its expiration. When such policy shall not be so succeeded, the county treasurer shall at once notify the State Comptroller of such default, together with any reason within his knowledge why such policy was not so succeeded.

(e) A county treasurer shall not transfer, sell or assign any stocks, bonds, mortgages or other security representing funds or property paid into court except pursuant to an order of a court of competent jurisdiction.