by David Gray Carlson
This is the first of a two-part series that takes an in-depth look--the first ever--at how New York's CPLR governs (perhaps mis-governs) the transfer of property from debtors to creditors by creation of liens. The first installment begins by discussing the birth and death of liens on real property and unorthodox priority rules the New York legislature, in its wisdom, has chosen to create. Sales procedure is examined, and constitutional difficulties are shown to exist. The interaction of judicial liens under the recording act is analyzed, and the traditional wisdom that creditors have no status under the recording act is challenged. The peculiar law of rents and the conceptual difficulty in levying them is covered. Exemptions are discussed. In particular, bad law exists when a senior mortgage is foreclosed and junior judicial liens exist. Under these circumstances, the debtor loses the exemption. The article shows how bankruptcy can successfully restore the exemption when a senior mortgage is in default. Finally, the Supreme Court's governance of tax liens is criticized for needlessly creating bad rules with regard to after-acquired real estate by a debtor who owes both a judgment and federal taxes.