AG James and others call for delay and reform to city’s tax lien sale program

September 2, 2020 Rob Abruzzese

Attorney General Letitia James, seen here, and 56 other state and local politicians wrote the mayor a letter on Monday demanding that he delay the annual tax and water lien sale. Photo: Alex Brandon/AP

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Attorney General Letitia James is leading a coalition of 57 elected officials from the city and state who have demanded that Mayor Bill de Blasio delay the city’s annual tax and water lien sale until after the COVID-19 pandemic ends.

James renewed her call for reforms and outlined proposals that she made when she was public advocate that she would like the city to institute. These reforms could save 4,700 small one-to-three family homes that are currently eligible for sale.

“Now is the time to support hardworking homeowners, not saddle them with undue financial burden,” said Attorney General James. “The tax lien sale has a disproportionate impact on communities of color and will only exacerbate the financial hardships so many are already facing in the middle of a pandemic.

“It’s incumbent on the government to protect the people — not kick them when they’re already down — and I urge Mayor de Blasio to take action immediately.”

The lien sale was originally set to take place on May 15, 2020, but it was delayed until September due to the pandemic. Sept. 3, 2020 is the last day that homeowners who have not paid property taxes, water bills and other charges against the property can pay off their debt before the charges become tax liens that may then be sold at auction by the NYC Department of Finance.

The terms on the sales are dramatic, James said, and they include 5 percent surcharges, legal fees, and a 9 or 18 percent interest rate compounded daily. James said that it is these fees that turn a small debt into a foreclosure sale.

James quoted de Blasio to himself in the letter when she said that families are hurting and don’t have money to pay bills. “‘We want to be fair. We want to be more understanding,’” James said, quoting de Blasio.

As public advocate, James had previously called for reforms to the tax lien sale program and she renewed those demands in the letter: eliminating water and sewer lien sales for low and middle-income occupants of one-to-three family homes, creating a “homeowner advocate” to help people navigate tax lien sales, and excluding non-profit organizations and houses of worship from the water lien sale and the property tax lien sale.

There are currently 2,639 houses on the list and 49 nonprofits with only a water debt.

The letter was co-signed by Congressmembers Gregory Meeks and Jose Serrano as well as by City Comptroller Scott Stringer, City Council Speaker Corey Johnson, Borough President Eric Adams and two other borough presidents, nine state senators, 13 assemblymembers, and 28 City Council members.

“At a time of deep financial instability across our city, especially in vulnerable communities of color, I urge the Department of Finance to cancel this year’s lien sale for small property owners,” said State Sen. Zellnor Myrie. “City government should be working to support homeowners burdened by the pandemic and recession, not selling off their accumulated wealth to the private market.”