In the past, the City's real property tax policy resulted in long-term City ownership and management of large numbers of tax delinquent residential properties. Not only did the policy fail to address the underlying reasons for tax delinquency and abandonment, but the City was unable to quickly resell the properties to responsible private owners.

In 1996, in an effort to more effectively link property tax enforcement and housing preservation policies, the City obtained legislative changes that have altered the process by which the City forecloses on tax delinquent properties.

• Local Law #26 of 1996 now permits the Commissioner of Finance to sell the tax liens of properties which have tax arrears, but are not distressed;

• For distressed and other buildings, under Local Law #37 of 1996, DOF can initiate an in rem foreclosure proceeding that will require the owner to pay his or her taxes or face the loss of his or her property;

• If the taxes are not paid, the City can convey a tax delinquent residential property to a qualified third party after a Court-rendered in rem judgment.

HPD’s Division of Neighborhood Preservation staff and Neighborhood Preservation Consultants work with owners of buildings designated for in rem actions to encourage them to pay their taxes in full or in installments, if acceptable to the Department of Finance (DOF). These owners are also referred for loan assistance, code enforcement, education and/or other targeted assistance.

PHONE NUMBER: (212) 863-6562

Supplementary Materials:

• Tenants may petition HPD for tenant ownership of their building. The following documents are used in completing the tenant petition process: the Tenant Petition, Sponsor Letter and a list of previously qualified not-for-profit developers (in PDF). For further information on the tenant petition process, please see the RFQ described in the above bullet.

• 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.

• A description of the Third Party Transfer Process (in PDF)

• The link below leads to properties that remain active in the Round 7 of the third party transfer in rem foreclosure process as of October 18, 2006. Through third party transfer actions, the City of New York identifies distressed and other properties with tax arrears and, based on law, gives the owners of those properties specified periods of time to pay their taxes and other liens in full or to apply to HPD for an installment agreement to pay over time. If owners fail to do so, HPD then transfers the properties to third parties, which include for-profit housing development companies and not-for-profit housing organizations. Tenants may also apply through a not-for-profit organization for eventual ownership.

  Round 7 is scheduled for transfer around the fall of 2007. The properties are transferred first to Neighborhood Restore (NR), a not-for-profit holding company that contracts with HPD to oversee the eventual permanent owners of the properties as these eventual owners work to stabilize the buildings, scope rehabilitation needs and arrange financing to complete the rehabs. Once these tasks are completed, usually within one year after transfer to NR, the properties are transferred to the permanent owners. 

• Properties that remain active in the Round 7 (files in PDF) of the third party transfer in rem foreclosure process as of October 18, 2006. Eligible properties from this process are scheduled to transfer around the fall of 2007.