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Since 1996, the New York City Department of Finance has held a tax lien sale where it sells New Yorkers’ delinquent debt to third-party debt collectors. These collectors then tackle high fees, benefiting New York homeowners in financial difficulty. Due to the pandemic, the sale of the lien did not take place in 2020, but according to the agency, that may not be the case in 2021.
Attorney General Letitia James has previously spoken about the inequity created and maintained by the sale of tax lien. In a 2020 letter to Mayor Bill de Blasio and Chairman of the Board Corey Johnson, James said the sale is fueling “the displacement of long-time landlords and tenants, the destabilization of neighborhoods and the transfer of wealth from landlords to lenders. and real estate speculators â€.
On the date of sale, a private collector purchases a lien debt, which is made up of late property taxes, utility bills, and other unpaid bills. Once the lien is sold, the buyer adds fees and interest of up to 18% which then escalate, aggravating the debt. This often punishes people who are already struggling to pay their taxes and bills.
For small family homes, a tax lien is sold if an owner has incurred a debt of at least $ 1,000 for more than three years. For larger homes, a water or sewer lien of at least $ 2,000 can also be sold if it has been owed for more than a year.
Although the sale did not take place in 2020, homeowners who did not opt ​​out of the tax lien list risk taking on more debt and foreclosure. Do your due diligence to make sure your bills are in order, as the lien sale can be reinstated any time after August 2021. If you need assistance, call the Center for New York City Neighborhoods at 646-786 -0888 or go to cnycn.org/get-help be put in touch with a free, non-profit housing advisor.
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