Can someone explain how property tax liens work in NYC. I understand that if a lien is placed on your property, a certificate is sold by the city in an auction (but apparently not anyone can bid in this auction -- who can?) Then this certificate apparently does not give you the property but the right to collect the lien amount, and you can only foreclose if no interest is paid for 90 days. But it... [more]
Can someone explain how property tax liens work in NYC. I understand that if a lien is placed on your property, a certificate is sold by the city in an auction (but apparently not anyone can bid in this auction -- who can?)
Then this certificate apparently does not give you the property but the right to collect the lien amount, and you can only foreclose if no interest is paid for 90 days. But it is not clear how this foreclosure process works. Are there notification processes and a long drawn out process or a quick auction at the end of the 90 days?
How does one find out about the auction?
Can someone buy the property from the party holding the lien certificate without a foreclosure auction?
If yes, then how are such properties marketed -- are they usually bundled wholesale or sold 1 by 1?
I have looked at the NYC HPD site that explains this process but how it actually works still mystifies me.
Any knowledge you can share will be appreciated
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Response by totallyanonymous
over 17 years ago
Posts: 661
Member since: Jul 2007
I cannot speak to NYC tax lien sales, but I've participated in ones in NJ. There, each municipality issues tax lien certificates on unpaid taxes and/or water/sewer charges. The certificates are sold at auction to investors who bid the interest rate DOWN from 18%. If a property is gought after, it may go for a premium (i.e. no interest and investor pays the town). The party upon which the tax lien is levied has 10 days to pay without penalty. After about 30-60 days, the investor must record the tax lien certificate with the county. (30-60 days because if the taxpayer pays the lien back within 30 days, it generally does not make sense to have recorded). If you don't record, however, and the property is sold, you lose. The best part is that the municipality acts as your paying agent and duns the taxpayer until they pay and then forwards news to you at which point you surrender your certificate and they send you a check. In NJ, if the taxpayer does no pay for 2 years, you can foreclose and your lien takes precedence over all existing mortgage liens because you have stepped into the shoes of the municipality and taken over the tax lien.
In NY, and other jurisdictions, they may simply auction off the property rather than issues tax lien certificates. I'm not sure.
Unfortunately, they are not sold to the "general public" in NYC, whatever that means.
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Response by totallyanonymous
over 17 years ago
Posts: 661
Member since: Jul 2007
looks like nyc offloads all their tax liens to a quasi governmental trust which issues bonds backed by them. the properties are then foreclosed upon after 60 days through public auction.
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Response by joedavis
over 17 years ago
Posts: 703
Member since: Aug 2007
Thanks -- this is what I gleaned from the NYC website also. What I would like to find out is how to find these auctions and their results,
While there are very few foreclosure auctions in Manhattan, the list for lien sales is 8 pages long.
I cannot speak to NYC tax lien sales, but I've participated in ones in NJ. There, each municipality issues tax lien certificates on unpaid taxes and/or water/sewer charges. The certificates are sold at auction to investors who bid the interest rate DOWN from 18%. If a property is gought after, it may go for a premium (i.e. no interest and investor pays the town). The party upon which the tax lien is levied has 10 days to pay without penalty. After about 30-60 days, the investor must record the tax lien certificate with the county. (30-60 days because if the taxpayer pays the lien back within 30 days, it generally does not make sense to have recorded). If you don't record, however, and the property is sold, you lose. The best part is that the municipality acts as your paying agent and duns the taxpayer until they pay and then forwards news to you at which point you surrender your certificate and they send you a check. In NJ, if the taxpayer does no pay for 2 years, you can foreclose and your lien takes precedence over all existing mortgage liens because you have stepped into the shoes of the municipality and taken over the tax lien.
In NY, and other jurisdictions, they may simply auction off the property rather than issues tax lien certificates. I'm not sure.
http://www.nyc.gov/html/dof/html/property/property_bill_taxlien.shtml
Unfortunately, they are not sold to the "general public" in NYC, whatever that means.
looks like nyc offloads all their tax liens to a quasi governmental trust which issues bonds backed by them. the properties are then foreclosed upon after 60 days through public auction.
Thanks -- this is what I gleaned from the NYC website also. What I would like to find out is how to find these auctions and their results,
While there are very few foreclosure auctions in Manhattan, the list for lien sales is 8 pages long.