Dilendorf Law Firm assists property NYC owners facing economic hardship, due to the COVID-19 pandemic, to resolve tax lien and judgment issues through payment agreements and other available mechanisms. Please feel free to contact our firm for a free consultation to discuss your situation and to learn how it can be expeditiously resolved.
In NYC the types of unpaid city debt that can be sold include:
- unpaid property taxes to the NYC Department of Finance (“DOF);
- unpaid water & sewer charges to the NYC Department of Environmental Protection (“DEP”); and
- unpaid fines or charges to the Housing Preservation & Development Agency (“HPD”);
All unpaid real property taxes, water and sewer charges, and other charges on property become liens on the day they become due and payable and may ultimately be sold to a third-party in a transaction known as the lien sale.
Properties are included in the lien sale when they meet a certain threshold of delinquency and do not qualify for a number of available exemptions like properties owned by certain senior citizens and low-income homeowners.
When is a Lien Eligible to Be Sold?
For example, for 1-3 family homes, a tax lien is sold when a property owner’s debt on the property exceeds $1,000 for over three years. For 2-3 family homes, a property will be sold if a water or sewer lien of the least $2,000 is due for over a year.
What are the Statutory Notice Requirements for Lien Sales?
When a property has liens eligible for the foreclosure sale, the City must notify a property owner via newspaper publications and by mail that a lien on their property will be sold if not satisfied. There is a 90-days notice, a 60-day notice, a 30-day notice, and a 10-day notice (“Notification Process”). Not receiving the required statutory notification is not a defense to prevent a foreclosure proceeding. Adm. Code of NYC 11-320.
Step for Avoiding the Lien Sale
1.Payment in Full of All Outstanding Charges and Fees. At any time during the required Notification Process, a property owner may pay the outstanding balance of the debt or enter into a payment agreement with the City in order to avoid inclusion in the lien sale; or
2. Enter into a payment agreement with the City. A payment plan is an agreement between a property owner and the DOF to pay the amount owed over time instead of paying the full amount all at once. Here is the link to the NYC DOF Property Tax Payment Agreement Application. Currently, the City offers repayment plans with terms that range up to 10 years with available options of depositing $0 downpayment.
The New York City Council recently passed legislation that reduces the late payment interest rate for property taxes due on July 1, 2020, for eligible property owners who have been impacted by COVID-19.
The DOF Currently offers the following repayment plans:
- Down payments for as little as $0 – Property owners do not have to make a down payment.
- For property taxes and most other charges:
- Monthly or quarterly installments are available.
- Terms of up to 10 years.
The annual interest rate property owners will be charged under a payment plan is set by law and depends on the Assessed Value of the property:
Annual Interest Rate
Assessed Value of Property
7% Less than $250,000 Through June 30, 2020 3.25% Less than $250,000 July 1, 2020 through September 30, 2020 5% Less than $250,000 October 1, 2020 through June 30, 2021 18% Greater than $250,000 Through June 30, 2021
Payment Plan Rules
After a property owner enters into a Property Tax Payment Agreement, the property owner must pay both new charges under the repayment plan and the required installment amount. If the property owner fails to make the required payment under the Payment Agreement for six months, the Payment Agreement is considered to be the default and may be canceled. Further, in the event of default, the property owner may not be legible to enter into another payment agreement for that property for the next five years absent extenuating circumstances.
Recent NYC Updates Concerning Enforcement of Lien Sales due to the COVID-19
On September 4, the Mayor announced that the last day to pay and remove properties from the tax lien sale at-risk pool has been postponed to September 24. Soon after, the governor issued an executive order prohibiting any sales of tax liens until December 3. The postponement was extended to January 1, 2021. During this time, DOF will continue to work with property owners whose tax lien is at risk of being sold.
What Happens After the Lien Sale?
What Happens After a Tax Lien Foreclosure is Initiated?
Here is the most recent list of properties eligible for the lien sale in the five boroughs:
DOF’s Property Tax Liens
- New York State Taxpayer Bill of Rights
- NYC Property Tax Lien Sale – NYC.gov
- Real Estate Tax Lien Sale Instruction Sheet
- NYC Property Tax Payment Agreement
- Property and Business Tax Forms
- Property Tax Repayment Agreement Request
- Property Tax Payment Agreement Estimator
- Extenuating Circumstances Payment Plan Reinstatement Request
- NYC Legislation Reducing the Late Payment Interest Rate for Property Taxes due on July 1, 2020
- Property Tax Lien Sale Virtual Outreach Sessions
- Property Tax and Interest Deferral Program (PT AID)
- Tax Warrants – Department of Taxation and Finance
- Requirements to Apply for PT AID Program
- New York State Tax Warrant Notice System
- Property’s Owners Rights and Obligations under the Tax Law
- NYC Tax Lien Sale: Implications of the Sale and How to Help Homeowners Avoid It
- NYC Tax Lien Tracker
DEP’s Water and Sewer Lien Sale
- Sample 90-day Notice of Intention to Sell Tax and Water Liens
- Overdue Water and Sewer Charges
- Water Debt Assistance Program for Multi-Family Homeowners
- Report of the Lien Sale Task Force
HPD’s Municipal Liens