§ 1197. Claims for surplus. 1. Any person who had any right, title,
interest, claim, lien or equity of redemption in or upon a parcel
immediately prior to the issuance of the judgment of foreclosure may
file a claim with the court having jurisdiction for a share of any
surplus resulting from the sale of such property. Such claims shall be
administered and adjudicated, and such surplus shall be distributed, in
the same manner as in an action to foreclose a mortgage pursuant to
article thirteen of the real property actions and proceedings law,
subject to the provisions of this section.

2. (a) Where the property was sold by a public sale, the amount paid
for the property shall be accepted as the full value of the property. No
party may maintain a claim for surplus or any other claim or action
against the tax district on the basis that the amount paid for the
property did not fairly represent the property's value.

(b) Where the property was sold by other than a public sale, a
claimant may make a motion, upon notice to the enforcing officer, for
the surplus to be recalculated on the basis that the property's full
value on the date of the sale was substantially higher than the value
used to measure the surplus pursuant to subparagraph (ii) of paragraph
(a) of subdivision one of section eleven hundred ninety-six of this
title. If the court or its referee finds that a preponderance of the
evidence supports the claimant's position, the court may direct the
enforcing officer to recalculate the surplus based upon the property's
value as determined by the court or referee. The court may further
direct the enforcing officer to pay the difference into court to be
distributed as required by this section.

3. Where the court has appointed a referee to preside over the
proceedings pursuant to subdivision two of section thirteen hundred
sixty-one of the real property actions and proceedings law, it shall not
be necessary for such referee to make a report of such proceedings; nor
shall it be necessary for the court to confirm by order or otherwise
such proceedings.

4. In the case of residential property, if at the time of the
confirmation of the report of sale, no former homeowner has filed a
claim for surplus, and there are surplus proceeds that remain to be
distributed, the proceeding shall remain open for at least three years
from the confirmation of the report of sale, or for such longer period
as the court may direct. If a former homeowner should file a claim for
surplus during such period, the court shall proceed as if it had been
timely filed.

5. At the conclusion of such proceedings, any surplus funds that have
not been claimed shall be deemed abandoned but shall be paid to the tax
district, not to the state comptroller, and shall be used by the tax
district to reduce its tax levy.

6. To the extent the provisions of article thirteen of the real
property actions and proceedings law are inconsistent with the
provisions of this article, the provisions of this article shall govern.