FACING LIEN TIMES
Pols push city to nix overdue-tax sale
Two state lawmakers are trying to stop the de Blasio administration from selling overdue taxes owed by delinquent property owners for debt collection or foreclosure amid the coronavirus pandemic.
Mayor de Blasio and the city Finance Department postponed a lien sale scheduled for May on the outstanding taxes, citing the COVID-19 outbreak.
But the city has rescheduled the sale to Sept. 4 for the tardy property taxes and water and sewer fees on some 9,500 residential and commercial properties, according to Finance Department records.
Once a lien is sold, property owners must arrange a payment agreement with the lien-servicing company — plus interest — or risk a legal seizure of their property. Foreclosure can be initiated six months and 30 days after the sale of the tax lien if the property owner makes no attempt at offering a repayment plan, according to Tower Capital Management, one of the city’s debt collectors on purchased liens.
The owners of properties eligible for the tax-lien sale have until Sept. 3 to fully pay their debt, enter into a payment agreement with the Department of Finance or seek a hardship exemption, the department said.
But state Sen. Leroy Comrie and Assemblyman David Weprin, both Queens Democrats, argue it’s wrong to threaten homeowners during the public-health crisis.
They have introduced a bill that would bar the city from holding a lien sale until one year after Gov. Cuomo lifts the emergency order and declares the pandemic is over.
“Homeowners facing the lien sale need ample time to consult with attorneys, enter into payment agreements, and learn about exemption programs ahead of the sale,” Comrie said.
“COVID-19 has made this all but impossible to do on the scale that we need it to happen. The tax-lien sale can’t happen this year, and I’m going to raise hell between now and September 4th to see to it that it doesn’t.”
Comrie’s Southeast Queens district has as many as 600 properties whose tax debts could be put up for sale. He noted that his district comprises largely one- and two-family homes that were hit hard by the subprime mortgage crisis a decade ago. Many property owners are still recovering from that devastation, he said.
The Finance Department and the mayor’s office had no immediate comment.
The lien sale is a last resort after city officials make numerous attempts to get property owners to pay up.
The Finance Department sends out four warning notices to owners starting three months prior to the lien sale.
Typically, more than 80 percent of owners pay the full amount owed, enter into a payment agreement or obtain a hardship exemption to remove them from the list, the Finance Department said.
The department sells the tax lien annually in bulk to city-owned trusts, which then issue interest-earning bonds secured by tax-lien certificates to institutional investors. The purchasers hire debt collectors to collect the taxes.
It was unclear how much property owners owe the city. In 2017, homeowners owed $186 million and nearly $800 million was outstanding on all properties.