When a New York City property has tax arrears, it may be subject to enforcement actions by the city to collect the amounts due. Depending upon the property class, condition, and amount of arrears, the city can either sell a tax lien, or foreclose on the property that is the subject of arrears by bringing an in rem action under the Third Party Transfer program.
Tax Lien Sale
A tax lien is a legal claim against real property for unpaid municipal charges, such as property taxes, housing maintenance, water, sewer, demolition, etc. An owner whose property is subject to a tax lien sale will receive a lien sale notice and the lien sale list will be published publicly. In a tax lien sale, the City sells delinquent liens to a single authorized buyer, who does not take title to the property, but does purchase the right to collect the money owed plus interest and fees. Ultimately, if the property owner does not pay, the lien holder may foreclose and the building will be sold at auction. Paying Municipal Arrears FAQ.
For more information about the Tax lien Sale, visit nyc.gov/liensale, or call 311. From outside NYC call 212-NEW-YORK. People with hearing impairments should call TTY: 212-504-4115. For general information about taxes and to pay online please visit the Department of Finance website.
If you have questions specific to an Emergency Repair charge, Alternative Enforcement Program (AEP) charge, Demolition charge or other HPD fee on your property tax bill, you can see the charges online or you can contact HPD directly for details about the charge at 212-863-6020 or hpderp@hpd.nyc.gov.
However, please be advised that failure to protest HPD Emergency Repair, AEP, or Demolition charges within the period identified on the statement of account from the Department of Finance negates an owner’s right to contest the charge in any subsequent administrative or judicial proceeding.
If a property has a certain level of arrears, housing violations, and/or emergency repair charges, the city may begin an in rem proceeding. This proceeding requires an owner to pay the tax arrears or face the loss of his or her property. If the taxes are not paid, after being awarded a foreclosure judgment in court, the city can convey the tax delinquent property to a qualified third party. The new owner is selected based on the history and qualifications in property management that are submitted to the city.
For an in-depth discussion of the history, development, and implementation of the Third Party Transfer initiative, read Breaking the Cycle of Abandonment Using a Tax Enforcement Tool to Return Distressed Properties to Sound Private Ownership (in PDF). This paper was the winner of the Pioneer Institute's Year 2000 Better Government Competition.
