FOR IMMEDIATE RELEASE
March 16, 2011
MAYOR BLOOMBERG SIGNS LEGISLATION EXTENDING THE CITY'S AUTHORITY TO SELL LIENS BASED ON DELINQUENT PROPERTY TAX, WATER AND SEWER CHARGES UNTIL 2014
Remarks by Mayor Bloomberg at a Public Hearing on Local Laws
"The first of three bills before me today is Introductory Number 26-A, sponsored by Council Members Vann, Comrie, Brewer, James, Mark-Viverito, Arroyo, Williams, Gennaro, Ferreras, Lander, Dickens, Dilan, Gentile, Jackson, Greenfield, Barron, Sanders, Rivera, Levin, Foster, Seabrook, Rose, Eugene, Koslowitz, Chin, Gonzalez, Nelson, Reyna, Rodriguez, Van Bramer, Mealy, Mendez, Wills, Crowley, Palma, Cabrera, Vacca, Ulrich, Koo and Koppell. Introductory Number 26-A extends the City's authority to sell liens on delinquent tax, water, and property related charges until 2014.
"A lien is a legal claim against real property for unpaid property taxes, water, sewer or other property charges, as well as the interest due on these taxes and charges. When an outstanding amount has been delinquent for a legally specified period of time, and the City has mailed notice to the property owner, the City of New York is allowed to sell a lien to an authorized third party for collection.
"The City was first given the authority to sell property tax liens in 1996. Before then, the only collection enforcement tool that we had was the 'in rem' program, which allowed the City to take ownership of properties in debt. The 'in rem' program proved to be too expensive for the City to manage and so the lien sale program was developed with the goal of reducing the costs associated with collecting property tax, water, and other municipal debt, while increasing the overall collection rates.
"Since 1996, the City Council has passed ten local laws extending, amending, or expanding the lien sale program. The last extension of lien sale authority, in December 2007, also granted the authority to sell stand-alone water delinquency charges for 2 and 3 family homes. Over the past fifteen years, the City has received over $5 billion dollars in property tax and water payments as a result of compliance with the program.
"Introductory Number 26-A reauthorizes and extends to 2014 the authority to sell liens based on delinquent property taxes or delinquent water and sewer charges. This legislation also adds the authority to sell liens of delinquent Emergency Repair Program and Alternative Enforcement Program charges for multi-family homes independent of other delinquency after one year and $1,000 in outstanding charges. In addition, Introductory Number 26-A includes Housing Development Fund Corporation rental units in the lien sale after two years and $5,000 in delinquent charges. These buildings had been statutorily excluded in the past.
"Protections for the City's most vulnerable - senior citizens, people with disabilities, and low-income homeowners - have remained in place and a new exemption for veterans has been included. In addition, the threshold for water lien sale for 2 and 3 family homes has been extended from one year and $1,000 to one year and $2,000 in overdue payments.
"Introductory Number 26-A also requires notification mailings at 90, 60, 30, and 10 days prior to the lien sale and publication of the lien sale list in major newspapers at 90 and 10 days. Other pre-sale outreach measures include a mailing to property owners twice a year with information on tax exemptions, the lien sale process, payment plans, and contact information for the ombudsperson at the Department of Finance and Department of Environmental Protection. After the lien has been sold, the third party collector is required to send an initial letter to the property owner explaining the servicer's role and itemized bills on all pay-off statements including a breakdown of initial outstanding debt, interest, surcharges, and fees.
"Introductory Number 26-A strikes a balance between the City's need to maintain reliable collections and the essential goal of preserving home ownership. This legislation provides an essential set of enforcement tools while maintaining a safety net for our most vulnerable populations. Most importantly, this legislation remedies the unfair burden placed on responsible property owners who carry the costs of water and sewer service for those who do not pay.
"I would like to thank Department of Finance Commissioner David Frankel, Department of Environmental Protection Commissioner Cas Holloway, Department of Housing Preservation and Development Commissioner Rafael Cestero, Office of Management and Budget Director Mark Page, and all the agency staff who worked on this bill, including John Grathwol, Assistant Director at OMB, Steve Ackerman, Senior Counsel at the Law Department and Massiel Garcia from my Office of City Legislative Affairs. I would also like to thank the City Council for approving this legislation."
Stu Loeser/Evelyn Erskine (212) 788-2958
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