When a property located in New York City has property or other tax arrears, it may be subject to enforcement actions by the City to collect the amounts due.  Depending upon the property class, condition, and amount of arrears, the City can either sell a  tax lien in a tax lien sale, or foreclose on the property that is the subject of arrears, by bringing an in rem foreclosure action under the Third Party Transfer program.

Tax Lien Sale   A tax 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. An owner whose property is subject to a tax lien sale will receive a lien sale notice, or if the property is on a published lien sale list, City records show that the property has this kind of debt.  In a tax lien sale, the City sells delinquent tax liens to a single authorized buyer. The lien holder purchases the right to collect the money that is owed to the City. Ultimately, if the property owner does not pay what is owed, the lien holder can begin a formal foreclosure proceeding in court.

Third Party Transfer--In rem Foreclosure Proceeding   If a property has a certain level of arrears and is also the subject of housing violations and/or emergency repair charges, the City may begin an in rem proceeding.  This proceeding requires an owner to pay the tax arrears or face the loss of his or her property.  If the taxes are not paid, after being awarded a foreclosure judgment in court, the City can convey the tax delinquent property to a qualified third party.  The new owner is selected based on the history and qualifications in property management that are submitted to the City.

FOR MORE INFORMATION AND ASSISTANCE REGARDING IN REM FORECLOSURE/THIRD PARTY TRANSFER PROCEEDINGS:   HPD’s Division of Neighborhood Preservation works closely with owners of buildings designated for in rem foreclosure actions to encourage them to pay their taxes in full or in installments, if acceptable to the Department of Finance. These owners are also referred for loan assistance, code enforcement, education and/or other targeted assistance.  PHONE NUMBER: (212) 863-6562 

For financial counseling regarding any of these taxes and charges, call HPD's Tax Lien Sale Hotline at 212-863-5300.

For general information about taxes and to pay online please visit the Department of Finance website at:  http://www.nyc.gov/html/dof/html/home/home.shtml

For an in-depth discussion of the history, development, and implementation of the Third Party Transfer initiative, read Breaking the Cycle of Abandonment Using a Tax Enforcement Tool to Return Distressed Properties to Sound Private Ownership (in PDF). This paper was the winner of the Pioneer Institute's Year 2000 Better Government Competition.