Homeowners can have liens placed on their property from city debts, most commonly unpaid property taxes and water and sewer charges. NYC periodically sells unpaid debts to private bidders, who can then add high fees and interest to the amount owed and bring a suit for foreclosure based on the higher amount. Before the lien is sold by the City, homeowners receive notices of intent to sell the lien.

To help prevent missed property tax payments, state and NYC property tax exemptions exist for low-income senior citizens, persons with disabilities, active duty military, and veterans. These exemptions could decrease the amount owed for property taxes.  See the Property Tax Exemptions link under Relevant Resources for a list of applicable exemptions.

Homeowners who have liens that are scheduled to be sold should contact the City about entering into a payment plan or applying for an exemption from the lien sale (see Exemptions Eligibility Checklist). Otherwise, paying the debt after the lien is sold to a debt buyer could be more burdensome. Advocates may also be able to help the homeowner payoff the lien completely using a gap loan.

If the lien has already been sold and a foreclosure action has been brought, then the counselor should refer the client to legal services.

Tip

For tax lien foreclosures, advocates should ask clients whether they received any of the required notices from the Department of Finance. A lack of notice can serve as a defense against the foreclosure. Many homeowners have tax lien foreclosures filed against their property where the required notices were never sent due to a bad address in the Department of Finance’s records. A referral to a legal services provider should be made at this point.

You can also check the block and lot number for tax liens and tax lien foreclosures to look out for any wrongly-filed foreclosures and errors by the Department of Finance.