The Legal Aid Society Applauds Public Advocate for Calling for Reform to NYC Water Lien Sale
WEDNESDAY, MAY 11, 2016

Public Advocate Letitia James called on the Administration to increase protections for homeowners ahead of its annual water lien sale, removing undue burdens on working families.

“The Legal Aid Society applauds the Public Advocate for calling for significant reform to the New York City water lien sale for one to three family properties, “ said Jenny Braun-Friedman, Supervising Attorney, Foreclosure Prevention Unit, The Legal Aid Society. “ The water lien sale has had a devastating impact on vulnerable homeowners, particularly seniors and disabled, and often leads to foreclosure and displacement that could otherwise be avoided.”




Public Advocate James Calls for Protections for Homeowners in Water Lien Sale
May 11 2016

Public Advocate James today called on the administration to increase protections for homeowners ahead of its annual water lien sale, removing undue burdens on working families. She called for low- and middle-income homeowners of one-to-three family, owner-occupied homes to be excluded from the annual water lien sale, and instead establish new education and advocacy programs to inform homeowners of their rights and responsibilities, including the creation of a citywide Homeowner Advocate. Public Advocate James was joined by members of the Coalition for Affordable Homes, community leaders, and homeowners.

“Every homeowner has a responsibility to pay their bills, but the punishment for late payment should not be selling the debt to private investors, who then charge high fees and force our working families into foreclosure,” said Public Advocate Letitia James. “Rather than imposing additional fines and liens, we must focus on programs that educate homeowners about their responsibilities and their rights, including payment plans. Owning a home is no small task, and we must create a stronger framework to support homeowners and not place undue burdens on our hardworking families.”

Every May, the City sells bonds that are backed by the water liens to a trust. This entity then has the ability to collect the debt through a “servicer” and charge high interest rates, compounded daily, on unpaid debt. Low- and middle-income owners of Class 1 properties (one-to-three family homes) are adversely impacted by the lien sale. This year’s sale takes place on Thursday, May 12, 2016. Ninety days, 60 days, and 10 days ahead of the list, the City’s Department of Finance publishes a list of eligible properties for the lien sale.

Public Advocate James is encouraged that the administration has taken steps to remove burdens on working families, including a $183 credit for Class 1 homeowners towards their water bill. However, this does not go far enough and Public Advocate James proposed that all owner-occupied Class 1 properties be removed from the water lien sale. This year’s 10 day list included 4,398 such properties. Public Advocate James also proposed that the city create a Homeowner Advocate. This individual would serve as a main point of contact to assist homeowners and their advocates in resolving issues with various agencies, and ensure that homeowners have due process, receive education about their rights and available resources, and increase accountability in City government. Public Advocate James is also dedicated to ensuring that not-for-profits, houses of worships, and other charitable institutions are not at risk of losing their properties because of the water lien sale.

“The Center commends the Public Advocate for standing up for middle- and working-class homeowners in our City,” said Christie Peale, Executive Director of the Center for NYC Neighborhoods. "We should all work to preserve homeownership and not burden our most vulnerable neighbors with excessively high interest and fees as a result of the tax and water lien sale."

“Often, my clients do not know that they can arrange an affordable payment plan with the City for their water bill; instead, their mortgage company pays the bill all at once and then applies it to their monthly payment, which can become an unmanageable debt burden and put their homes at risk,” said Bonita Dowling, a Homeowner Counselor with IMPACCT Brooklyn. “I applaud the Public Advocate for calling for a Homeowner Advocate to protect my clients.”

“Homeowners need a champion who can look out for their best interests, especially given how challenging it is for working- and middle-class families to maintain their roots in their neighborhoods,” said Rose Marie Cantanno, Supervising Attorney for the Foreclosure Prevention Project at New York Legal Assistance Group. “A Homeowner Advocate would be a benefit not only for owners, but also for keeping neighborhoods vibrant and diverse.”

“The Legal Aid Society applauds the Public Advocate for calling for significant reform to the New York City water lien sale for one to three family properties. The water lien sale has had a devastating impact on vulnerable homeowners, particularly seniors and disabled, and often leads to foreclosure and displacement that could otherwise be avoided.” Jenny Braun-Friedman, Supervising Attorney, Foreclosure Prevention Unit, The Legal Aid Society.