The City Collector is authorized and empowered to claim against
the proceeds of a policy of fire insurance insuring the interest of
an owner and issued on real property located within the City upon
which there is erected any residential, commercial or industrial building
or structure, except a one- or two-family residential structure, to
the extent of any liens for taxes, special ad valorem levies, special
assessments and municipal charges arising by operation of law against
the property and remaining undischarged for a period of one year or
more. He shall cause a notice of intention to claim against the proceeds
of such policies of fire insurance as described in § 22
of the General Municipal Law to be served upon the State Superintendent
of Insurance for entry in the index of liens maintained by him as
provided in § 331 of the Insurance Law; provided, however,
that the City Collector shall release or return to the insured any
amounts to which the City is otherwise able to claim if the insured
agrees with the City in writing to restore the affected premises to
the same condition that it was in prior to the time that the lien
arose or an improved condition.
The City Collector may retain enough money from the proceeds
of the fire insurance policy to pay the taxes, interest and penalties
due on the insured property until such time as an insured has restored
the property to its original condition, or he may agree with an insured
to release part of the retained sum as certain agreed portions of
the necessary restoration at work are certified as completed by the
City Building Inspector.