Tax liens for sale in Malverne

Investors take part in annual transactions at Village Hall


Where in Malverne can you get 12 percent annual interest on your money without investing in the stock market? The answer is on Church Street.

On March 9, 15 people assembled on the second floor of Village Hall. Most had known one another for at least several years; a few sat quietly by themselves. Their goal, however, was the same: to purchase liens on 14 Malverne properties during the village’s annual tax lien sale.

Why would anyone want to purchase a tax lien? “Because they receive 1 percent interest on their money per month,” said Village Clerk Terry Emmel.

Instead of getting stiffed on taxes that property owners don’t pay after repeated warnings, the village sells the liens on the property each year. Anyone interested can attend the sale — typically scheduled around the beginning of March. And it’s usually the same people.

“This is their business; this is what they do,” said Emmel. “We see the same people every year.”

A buyer purchases a lien by paying the outstanding taxes owed on the home or building. Once the sale is completed, and the checks have cleared, the purchaser receives an accounts claims certificate, which entitles him to 1 percent interest on his investment — per month — until the homeowner pays off the outstanding taxes. The homeowner must pay the tax lien, in addition to interest owed for the village, to clear the lien.

Because the village acts as the administrator of the process, the lien holder never deals directly with the homeowner and the village’s tax lien process provides an added layer of protection against a homeowner who tries to skirt payment.

Emmel stated that she’s not thrilled that the village is forced to hold such sales. “We try really hard to collect. We don’t want to do this,” she said, but the practice does make the village “whole” in its tax collection. “We usually do sell every lien,” she said.

Occasionally, people will pay off their outstanding taxes within the year, said Emmel. “Out of 13 liens sold at the March 2016 tax sale, three were paid during the year,” she said, adding that the village processes roughly 3,190 tax bills annually.

If taxes aren’t paid within the year, the tax lien carries over to the following year, and another one on the property is offered — with the person who purchased the original lien getting first right of refusal. Emmel said that after two years of unpaid taxes, the lien holder has the right to start foreclosure proceedings.

Few of the 15 people who attended the sale last Thursday wanted to comment. “You’re doing an article on this?” said one attendee who declined to be identified. “You’re going to get a kajillion people here next year! Do I want to talk to you? Naaah.”

A lawyer who said he has been purchasing tax liens for three years said that with interest rates low, he takes the time and the effort to purchase liens. “If you have a little money hanging around, this is something you can do,” he said. “You can’t make a ton of money from it, but if you go from village to village, you could.”

And that was exactly the strategy for some — such as Bill. The former Lynbrook resident, who now lives on the North Shore, and identified himself only by his first name, said he owned more than 200 tax liens in villages throughout Long Island.

How many villages does he visit for tax lien sales? “Well, there are a lot of them,” he said as he made his way to make a payment for his bid.