NYC’s 2025 Tax Lien Sale: Key Points for Commercial and Apartment Building Owners

As New York City revamps its tax lien law and gears up for the next lien sale in May 2025, owners of commercial properties, larger apartment buildings, and other non-owner-occupied properties should remain vigilant. While the core policy shift leans heavily toward protecting small homeowner-occupants, these changes still matter for larger entities that need to stay current and strategic about property taxes—especially if you’re contesting assessed values through tax certiorari proceedings.

Important Dates and Effective Dates
Local Law 82 of 2024, which substantially amended the City’s tax lien procedures, became law on July 30, 2024. Most provisions took effect 90 days later—around late October 2024—though certain requirements may be phased in after 180 days. This timeline means the reformed lien sale rules and enhanced outreach efforts will be firmly in place by early 2025, well before the scheduled lien sale in May 2025.

When and Why Liens Can Be Sold
Under the updated rules, the length of time that charges must be overdue before the City can sell a lien varies by property type. For commercial properties and larger residential buildings that do not qualify as HDFC rentals or small mixed-use buildings, the threshold remains 1 year of overdue charges. Owners should note:

• Commercial Properties, Larger Residential Rentals, Other Vacant Land: 1 year overdue
• HDFC Rentals: 2 years overdue
• Residential Cooperatives, Developable Class 1 Vacant Land, Small Store/Office with 1–2 Apartments Above: 3 years overdue

This timeframe hasn’t significantly changed from prior lien sale rules for larger commercial and non-HDFC rental properties. The biggest shifts in the new law target homeowner-occupied properties, offering them more time and special payment or deferral options. Commercial owners, by contrast, will continue largely under the previous regime—delinquencies after one year can still trigger a lien sale.

No Special Protections for Owners Contesting Their Assessed Values
A critical point for those engaged in tax certiorari (the process of challenging the assessed value to reduce real property taxes) is that a pending challenge does not prevent a lien from being sold. Even if you believe the assessment or other charges are incorrect and have a tax certiorari case pending, the City may still sell the lien if the overdue charges hit the time threshold.

This means you must either pay the outstanding charges or enter into an installment agreement to avoid the lien sale. If your certiorari proceeding ultimately succeeds and you secure a reduction, you will be entitled to a refund or a credit—but you must first ensure the lien isn’t sold. Waiting for a contested assessment result without paying risks much bigger headaches down the line.

Installment Agreements: A Practical (But Not Interest-Reducing) Tool
If paying the overdue charges outright before the February 2025 90-day list publication isn’t feasible, consider entering into an installment agreement with the Department of Finance. While such agreements can prevent your property from appearing on the lien sale list, they do not reduce the interest rate. You’ll continue to incur interest, but at least you’ll avoid the immediate threat of a lien sale in May 2025.

HPD’s Heightened Role and What It Means for Larger Buildings
New provisions require the Department of Housing Preservation and Development (HPD) to inspect certain repeatedly delinquent multi-family properties before the lien sale. Although HPD’s attention is primarily geared toward safeguarding tenant conditions in distressed buildings, larger rental buildings that frequently show up on lien lists may now face closer scrutiny. This can mean:

• More inspections for code compliance, building maintenance, and tenant protection measures.
• Potentially higher costs or mandated repairs if deficiencies are found.
• Added pressure to ensure timely tax payments to avoid drawing HPD’s focus and incurring further regulatory action.

Have the Rules for Commercial Properties Changed Significantly?
For commercial and larger residential rental properties, the fundamental lien sale triggers and timelines remain largely the same as in previous iterations of the law. The main changes primarily benefit smaller, owner-occupied homes and condos, adding special payment and deferral options those owners can use to stave off lien sales. Commercial owners receive none of these new “breaks.”

What has changed is the City’s overall enforcement posture, outreach, and transparency. You can expect:

• More rigorous and timely notices before the lien sale.
• Heightened emphasis on ensuring you’re aware of delinquencies well in advance.
• More public reporting on properties approaching lien sale status, meaning more scrutiny on repeated offenders.

Action Items for Commercial Owners and Managers

1. Review Tax Bills and Deadlines: Check if you have outstanding charges that exceed 1 year. If so, settle them before February 2025 or seek an installment agreement.
2. Don’t Rely on Pending Certiorari: Even if you’re confident you’ll win a tax reduction, pay now to avoid the lien sale and seek a refund later.
3. Monitor HPD Inspections: If your building has a history of chronic delinquency, expect closer HPD attention. Proper maintenance and code compliance are more critical than ever.
4. Stay Informed: As the City refines and updates its approach, keep tabs on any rule changes. Talk to your property tax attorney, especially if you’re navigating certiorari cases or uncertain about your installment agreement options.

Conclusion
While the new tax lien law’s headline changes focus on protecting small homeowners, commercial property owners, cooperative boards, and managers of larger buildings must not become complacent. Your underlying rules—1 year overdue equals lien sale risk—remain intact. Pending assessment challenges won’t shield you. And with the law now effective, the City’s oversight and enforcement are only intensifying. Proactive tax management and strategic installment agreements (if needed) remain your best tools to keep your property off the lien sale list and out of regulatory crosshairs.

See prior coverage:

• NYC Comptroller Weighs in the New FY2025 Budget’s Reliance on Property Taxes, and the Reauthorized Tax Lien Sale | Rosenberg & Estis, P.C.
• More New Yorkers Have Stopped Paying Property Taxes – Bloomberg