Lien Sale

All overdue water and sewer charges are considered a lien against your property. The City has the authority to sell this lien to a third party, or lienholder, in a process called a lien sale. The following property types are eligible:

• Tax Class 1 mixed use, two and three family homes with $3,000 or more in water and sewer charges outstanding for a year or more.
• Tax Class 2 multi-family homes including condos with $1,000 or more in water and sewer charges outstanding for a year or more and HDFC rentals with $5,000 or more in water and sewer charges outstanding for two years or more. HDFC condos and coops are ineligible for the lien sale.
• Tax Class 4 commercial properties with $1,000 or more in water and sewer charges outstanding for a year or more.

When the City sells a lien, it is not selling the property. The new lienholder does not take title to the property. The lienholder purchases the right to collect the money that was previously owed to the City. Ultimately, however, if the property owner does not pay what is owed, the lienholder can begin formal foreclosure proceedings.

Download the Report of the Lien Sale Task Force September 2016

If you have received a lien sale notice by mail or if your property has been listed on a published lien sale list, it means that our records show that your delinquent water and sewer charges meet the eligibility criteria for the lien sale.

As a result, a lien for the entire delinquent amount will be sold in the lien sale, unless you resolve your debt before the deadline on the notice.

The most important thing for you to do is to reach out to Customer Service. You must arrange for payment, or, if you think that you do not owe the money, you must dispute the charges with us on or before the deadline on the notice. If payment has not been arranged by the deadline on the notice, and the charges are not in dispute, the lien on your property will be sold.

Mixed use, 2 and 3 family homes are eligible if they owe $3,000 or more in water and sewer charges outstanding for a year or more. Multi-tenant residential properties, including condos, and most commercial buildings, are eligible for the lien sale if they owe $1,000 or more in water and sewer charges outstanding for a year or more. HDFC rentals are eligible if they owe $5,000 or more in water and sewer charges outstanding for two years or more. HDFC condos and coops are exempt from the lien sale.

Single-family homes and residential customers receiving the Senior Citizen Homeowners’ Exemption (SCHE), the Disabled Homeowners’ Exemption (DHE), the State Personal Income Tax (PIT) Circuit-Breaker Tax Credit, a Veteran’s exemption, or the State Soldiers and Sailors Act Benefit (SSAB) are exempt from the lien sale. Active-duty military personnel may also request an exemption from the lien sale by completing an affidavit that provides information about their military service, their property, tax warrants, Environmental Control Board violations, etc. You can download this affidavit at nyc.gov/liensale.

You may be eligible to be removed from the lien sale for one year at a time and up to 3 times, if:

• You own a one-, two-, or three-family home or condominium unit.
• The property is your primary residence.
• You do not own any other properties in New York City.
• The combined annual income of all owners and their spouses who reside at the property is less than $107,300.

If you meet these requirements and are not able to pay what you owe or enter into a payment agreement, you can submit a Lien Sale Easy Exit Program application to the NYC Department of Finance.

You may still be eligible for other collections enforcement actions. For additional information, please visit Overdue Water & Sewer Charges.

To learn how you can make a payment, please visit How to Pay.

If you have received a lien sale notice or would like to consolidate your debt, you may be eligible for a payment agreement, which will allow you to gradually pay off your debt over time. We offer payment agreements to customers with $0 down and a repayment period lasting anywhere from 3 months to 10 years. The property owner should have a valid form of identification to enter into a payment agreement. If you wish to enter a payment agreement to pay off outstanding water and sewer charges, please contact us at 718-595-7890 or collectionsunit@dep.nyc.gov.

Property owners or their representatives should attempt to pay before the deadline on the notice to ensure timely processing and to prevent the sale of the lien(s). Partial payments or payments in full may be made by any person or entity at any time.

Authorized Representatives

Property owners can use an authorized representative to enter a payment agreement. An authorized representative must have valid identification and be any one of the following:

• Anyone who presents a notarized letter of authorization issued by the property’s owner*.
• Anyone who presents a valid (issued within the last 12 months) or durable power of attorney issued by the property’s owner (note that a power of attorney expires upon the death of the property owner)*.
• Anyone who presents a document from a Court declaring that they have the authority to transact business on behalf of the property as an executor/executrix, administrator, trustee etc.*.

*Heirs/heiresses to properties must have at least one of the above named documents in order to enter into a payment agreement. If an heir/heiress does not have the required documentation, they may not enter into a payment agreement with us. However, heirs/heiresses may be able to receive a stay by signing an Agreement for Intestate Property, which states that we will give the heir/heiress at least one year to acquire the necessary documentation authorizing them to conduct business on behalf of the property in question Download the NYC DEP Agreement for Intestate Property.

Defaulting on Payment Agreements

In the event of any failure to pay the full consolidated bill each month, when the payment is due, DEP and the NYC Water Board will undertake all efforts provided under law and equity to recover the full sum due. Customers who default on their payment agreement by missing partial or full monthly payment(s) for a period of seven or more months may cure the default by:

• Bringing all installment payments, current charges and interest that are outstanding at the time of default to a current status; or
• signing a new payment agreement for the current balance which must include at least a 20% down payment.

If the customer fails to either cure the defaulted payment agreement or sign a new payment agreement prior to the City tax lien sale and the delinquent charges are sold, no payment agreement may be entered into for the subsequent charges for the subject property for a period of five (5) years unless they claim and have proof of extenuating circumstances as described below. If the property is subject to another tax lien, the customer may elect (one-time only) to enter into an installment agreement for the amount due that is subject to the subsequent tax lien before the end of the five-year period and without a claim of extenuating circumstances, but they must make at least a 20% down payment. Extenuating circumstances may be defined as:

• The death of the signatory to the agreement, of any person named on the deed for the property or of a contributing household member**.
• A loss of income to the signatory, to any person named on the deed for the property or to a contributing household member** due to his or her involuntary absence from the property for any consecutive period of six months or more for treatment of an illness, for military service, or pursuant to a court order, that results in a default of the agreement or inability to cure the default prior to the date of sale of the tax lien or tax liens.
• A loss of income to the signatory to the agreement, to any person named on the deed for the property or to a contributing household member** due to his or her unemployment for any consecutive period of six months or more that results in a default of the agreement or inability to cure the default prior to the date of sale of the tax lien or tax liens.

**A “contributing household member” shall mean any person eighteen years of age or older who has lived in the property that is the subject of the installment agreement at least since the execution of the agreement and has paid household expenses since the execution of the agreement in an amount equal to at least fifty percent of each installment amount due under the agreement.

By paying your monthly consolidated bill in full and on time every month, the lien on your property will not be subjected to a City tax lien sale or any further collection action.

For more information, connect with Customer Service.

Eligible customers who do not arrange for payment before the deadline on the lien sale notice will have their water and sewer charges sold in the lien sale.

Within 90 days after the lien sale date, the City notifies all property owners by mail of (a) the terms and conditions under which the lien was sold, (b) the name of the new lienholder and (c) the name of the lienholder’s authorized representative whom the property owner should contact. The representative will also contact the property owner to discuss payment arrangements.

Multi family homeowners who are on the 90-day lien sale list and are currently under threat of foreclosure or mortgage delinquency may apply for the Water Debt Assistance Program. If qualified, we will remove their property from the upcoming lien sale and defer the debt until the property is sold, refinanced, or the owner has the ability to pay the debt. Learn more about the Water Debt Assistance Program.

If you have received a lien sale notice or your property has been published on a lien sale list, the most important thing for you to do is to reach out to Customer Service.

The Ombudsman Office provides special assistance to all water and sewer account holders undergoing the lien sale process. To contact the Ombudsman, please call (718) 595-6628 or send an email to ombuds@dep.nyc.gov.