State Senator Leroy Comrie and Assembly Member David Weprin have introduced legislation that would postpone the New York City tax lien sale by one year following the expiration of the COVID-19 state of emergency order.
The annual lien sale in which debt on tax delinquent properties is auctioned to private collectors was scheduled for May 15, 2020, but was delayed due to the ongoing COVID-19 crisis. As of now, the sale is scheduled to occur on September 4, 2020.
The owners of properties eligible for the tax lien sale have until September 3 to pay their debt or enter into a payment agreement with the Department of Finance.
Liens are sold to private lien servicing companies with special operating authorization by the city. Currently, these include Tower Capital Management, LLC and MTAG Services, LLC. Once a lien is sold, the property owner must arrange a payment agreement with the lien servicing company or risk legal seizure of their property.
In Senator Comrie’s Southeast Queens district, a residential community that is still recovering from the subprime mortgage crisis, as many as 600 properties are eligible for the 2020 lien sale. In years past, Senator Comrie’s office has worked closely with the Department of Finance to identify and assist property owners ahead of the annual lien sale, but COVID-19 has presented unprecedented challenges to doing community outreach.
“Homeowners facing the lien sale need ample time to consult with attorneys, enter into payment agreements, and learn about exemption programs ahead of the sale,” said Senator Comrie. “COVID-19 has made this all but impossible to do on the scale that we need it to happen. The tax lien sale can’t happen this year, and I’m going to raise hell between now and September 4 to see to it that it doesn’t.”
Assembly Member David I. Weprin added, “While I appreciate the City of New York’s delay in holding the sale thus far, it is now clear that the lien sale must be canceled this year. I am proud to join Senator Leroy Comrie as the Assembly sponsor of state legislation to eliminate the 2020 lien sale in New York City and look forward to raising havoc with the Senator to protect low and moderate income homeowners and seniors from this threat to homeownership.”
On Tuesday, the Community Housing Improvement Project (CHIP) a group that represents the owners of 400,000 rent stabilized apartments in the city, called for the sale to be delayed, claiming it would instantly wipe out decades of equity built up by working-class immigrants who have borne the brunt of the COVID-19 pandemic.
CHIP said building owners who have fallen behind in their property tax payments are almost exclusively mom-and-pop shops and many have renters who have not paid any rent for more than four months.
“The city cannot ignore the fact that the measures taken to protect tenants during this pandemic have had ripple effects, including a significant reduction in rent collections at thousands of properties,” said CHIP in a statement.
Mayor de Blasio has dismissed calls for cancelling the sale, claiming it would cost the city $57 million that could be spent paying front line workers, teachers and first responders.
At a media briefing on Tuesday, he said the property owners facing tax lien sales were in trouble with their bills before the pandemic.
“We’re talking about a situation that, you know, if folks didn’t pay what they owed before the crisis and got to the point that their property would be in a tax lien sale, I think we have to think about the fairness for everyone involved.
“There’s a huge number of people out there, no matter how tough things are, they are and have been paying their taxes – folks who are working to in every way they can keep going, and they depend on government resources. I mean and all the support we provided in terms of food and healthcare, all the things we’ve done for free for the people of this city – that has to be paid for.
“There’s no stimulus in Washington. There’s no long-term borrowing from Albany yet. It’s very hard to turn down that amount of revenue when you think about what it means for the people, the city and the services we need to provide for them.”