Since our previous discussion on New York City’s revival of the tax lien sale, several key developments have occurred that warrant attention. The Department of Finance (DOF) has proposed new rules aimed at refining the hardship installment payment plan, and the City Council’s Finance Committee has held a hearing on multiple related legislative proposals. These measures could have implications for property owners facing tax lien issues. Given the financial pressures faced by many property owners, understanding these developments is essential for those seeking to safeguard their properties.
DOF’s Proposed Rules
The DOF has introduced a set of proposed regulations intended to enhance the hardship installment payment plan. Key aspects of these proposals include:
- Allowing property owners to renew hardship installment agreements through self-certification of income and primary residence.
- Establishing procedures for removal from the tax lien sale and an appeal process for denied removal requests.
- Setting criteria for waivers of tax lien certificate surcharges for qualifying owners.
- Creating a Preservation Track program, permitting property owners to voluntarily transfer their property to a preservation purchaser in exchange for tax lien forgiveness.
- Introducing streamlined application procedures to expedite decision-making and ensure that vulnerable property owners are not unduly burdened by bureaucratic delays.
A public hearing on these rules is scheduled for February 3, 2025, and property owners or stakeholders can submit comments before that date.
Upcoming Tax Lien Sale Announcement
The New York City Department of Finance (DOF) has announced that the next tax lien sale is scheduled for May 20, 2025. Property owners at risk of inclusion will receive warning notices 90, 60, 30, and 10 days prior to the sale. The initial 90-day notice is expected to be issued around February 19, 2025. To avoid inclusion in the lien sale, property owners must address their outstanding debts by May 19, 2025.
Steps to Avoid the Lien Sale
- Pay Outstanding Charges: Settle any unpaid property taxes, water and sewer charges, or other related debts.
- Enter into a Payment Plan: The DOF offers various payment plans, including standard agreements and the Property Tax and Interest Deferral (PT AID) program, which may provide reduced interest rates for eligible participants.
- Apply for Property Tax Exemptions: Certain exemptions, such as those for senior citizens, individuals with disabilities, or veterans, can remove properties from the lien sale list.
- Utilize the Lien Sale Easy Exit Program: This program allows qualifying homeowners to request removal from the lien sale for one year, provided specific criteria are met.
- Consult Legal and Financial Experts: Property owners should consider engaging professionals who specialize in property tax issues to explore additional avenues for preventing lien sales and safeguarding property assets.
For detailed information on these options and to determine eligibility, property owners should visit the DOF’s official lien sale page (nyc.gov).
City Council Finance Committee Hearing and Legislative Proposals
On January 14, 2025, the City Council’s Finance Committee convened a hearing to review multiple legislative proposals addressing tax lien sales and related property tax enforcement issues. The main bills under discussion were:
- Intro. 782-A: Requires DOF to proactively notify property owners about available tax exemptions and include exemption information with their statements of account.
- Intro. 783: Mandates DOF to record tax liens in the ACRIS system once the debt surpasses $5,000 and remains unpaid for over three years.
- Intro. 889: Requires DOF to notify Council Members when deed- or mortgage-related documents are recorded affecting a long-held property in their district.
- Intro. 1086: Expands notification requirements, obligating DOF to alert interested parties through email, text, and mail when a real estate instrument is recorded.
- Res. 327: Calls on the State Legislature to allow retroactive application of property tax exemptions to eligible homeowners.
- Proposed Amendments: Additional amendments were discussed that could further refine notification procedures and enhance transparency in the lien sale process.
Key Takeaways from the Hearing
The hearing highlighted several major concerns and perspectives:
- Outreach to Homeowners: Advocates, including legal aid organizations, emphasized the need for greater public awareness of available exemptions to prevent homeowners from falling into arrears unknowingly.
- Fraud Prevention: Several Council Members and advocacy groups stressed the need for more robust protections against deed fraud and predatory practices, particularly in communities with high rates of foreclosure risk.
- Concerns About Recording Liens in ACRIS: While supporters argue this measure enhances transparency, others worry that making this data more accessible could inadvertently expose homeowners to predatory investors.
- Effectiveness of Existing Measures: DOF officials defended their current notification and outreach practices but acknowledged that more could be done to ensure property owners take advantage of exemptions.
- Increased Financial Burdens: Homeowners and advocacy groups highlighted the rising costs associated with property tax delinquency, stressing the importance of policies that help mitigate financial hardship.
Implications for Property Owners
For property owners at risk of tax lien sales, these developments highlight the importance of:
- Reviewing eligibility for tax exemptions and ensuring proper documentation is submitted on time.
- Monitoring property records through ACRIS and other systems to detect any unexpected recordings.
- Engaging with the DOF’s public hearing process to voice concerns or suggestions regarding the proposed hardship installment rules.
- Considering installment agreements as a means to manage tax debts and prevent liens from being sold.
- Seeking Professional Assistance: Property owners should consider consulting tax professionals, attorneys, or financial advisors to navigate the complexities of the lien sale process effectively.
- Understanding Long-Term Financial Planning: Property owners should implement financial strategies that reduce the risk of falling into delinquency and provide sustainable property ownership solutions.
Conclusion
As the tax lien sale process moves forward, the interplay between these legislative proposals, DOF’s rulemaking, and ongoing advocacy efforts will shape the ultimate outcomes for New York City property owners. Stay informed and proactive about these changes. Property owners should consider participating in the upcoming DOF hearing and reaching out to their Council Members to express their views on the proposed bills. Furthermore, proactive financial planning and seeking professional guidance can help ensure that property owners remain in compliance with tax obligations while avoiding potential risks associated with the lien sale process.