Water Lien Bill Passes in City Council, A Big Win for Bed-Stuy

Sometimes the hardest fought battles are the best won.

The saying holds true for Councilmember Al Vann, whose Lien Sale Reform and Reauthorization Act languished for two years before passing in the City Council yesterday, representing a big win for homeowners, particularly in Bed-Stuy.

After a two-year fight, the bill passed unanimously, paving the way for significant reforms and protections to help New Yorkers retain their homes.

The bill is a big deal for homeowners in communities of color such as Bed-Stuy which, during the latest mortgage crisis, suffered one of the highest rates of home foreclosures in the country.

In 2007, with the threat of a mid-year water rate increase, the City Council passed legislation that allowed the administration to sell liens on outstanding water debt for the first time. Previsouly, the city's lien sale only included stand-alone property tax debt.

This new legislation, on top of the mortgage crisis, placed hundreds of thousands of New Yorkers at greater risk of losing their homes to water bill liens sales by aggressive Wall Street-affiliated debt collectors.

Vann's bill will provide an umbrella of protections for homeowners – both before and after a lien may be sold.

Homeownership is a major component of a neighborhood's stability, said Vann, particularly among the most vulnerable, such as senior citizens, the disabled, veterans and low-income residents.

"We must do all we can to protect the economic health of New Yorkers when possible," said Vann. "This bill ensures that our city agencies will take significant steps to protect homeowners, who like many New Yorkers are trying to withstand the current economic pressures.”

Some of the bill's legislative protections include:

1) An increase in the threshold for a water lien sale for two- and three-family homes from  $1,000 for one year to $2,000 for one year.

2) A payment plan for homeowners with the option of 0% down payment and 8 year repayment period to avoid having their lien sold

3) A notice to property owners that their property is listed in the lien sale with first-class mail at 90, 60, 30, and 10 days before lien sale, in addition to newspaper publication at 90 and 10 days before lien sale. 

4) Extensive outreach by the Department of Finance to enroll homeowners in property tax exemption programs that would exempt them from a lien sale (mailings, telephone calls, and notice to the City Council regarding status).

5) A requirement that the city buy back a lien from a servicer if a homeowner was found to be eligible for a property tax exemption that should have removed them from the lien sale up to 90 days following the lien sale

6) An exemption for disabled veterans and also those who were deployed to combat

The bill passed yesterday with a vote of 49-0 and now must be signed into law by Mayor Bloomberg.

“Every so often, government does great things to help those who really need it, and our passage of this bill today is a prime example,” said Vann. “I am proud of this Council.”