N.Y.C. Admin. Code tit. 27, ch. 2 § 27-2137
Recovery of expenses of receivership; lien of receiver (New York City Housing Maintenance Code)
Operative Text
a. The expenditures made by the receiver pursuant to section 27-2135 of this article shall, to the extent that they are not recovered from the rents and income of the property collected by the receiver, constitute a debt of the owner and a lien upon the building and lot, and upon the rents and income thereof. Except as otherwise provided in this section, the provisions of article eight of this subchapter shall govern the effect and enforcement of such debt and lien; references therein to the department shall, for purposes of this article be deemed to refer to the receiver and, after such receiver's discharge, the department of housing preservation and development. b. Failure to serve a copy of the order and notice required in the manner specified by section 27-2131 of this article, or failure to serve any mortgagee or lienor with a copy of the order to show cause as required by subdivision c of section 27-2132 of this article, shall not affect the validity of the proceeding or the appointment of a receiver, but the rights of the department of housing preservation and development or of the receiver shall not in such event be superior to the rights of any mortgagee or lienor who has not been served as provided therein. c. Any mortgagee or lienor who at his or her expense remedies or removes the conditions to the satisfaction of the court pursuant to the provisions of subdivision c of section 27-2134 of this article shall have and be entitled to enforce a lien equivalent to the lien granted to the receiver in favor of the department of housing preservation and development hereunder. Any mortgagee or lienor who, following the appointment of a receiver by the court, shall reimburse the receiver and the department of housing preservation and development for all costs and charges as hereinabove provided shall be entitled to an assignment of the lien granted to the receiver in favor of the department of housing preservation and development.
Under N.Y.C. Admin. Code §§ 27-2001 & 27-2137, when a court-appointed receiver spends money to correct housing conditions at a property and cannot fully recover those costs from the building's rents and income, the unpaid balance becomes a legal debt owed by the property owner and attaches as a lien on the building, the lot, and its rents. The provision also addresses how procedural notice failures affect the relative priority of that lien against existing mortgagees and lienors. Additionally, mortgagees or lienors who step in to remedy the conditions themselves—or who reimburse the receiver and the Department of Housing Preservation and Development for all costs—may acquire or be assigned an equivalent lien in their own favor.
Plain English — not legal advice.
Property owners subject to a receivership under §§ 27-2001 & 27-2137 should be aware that any receiver expenditures not covered by the building's collected rents and income will be recorded as a debt and lien against the property. Compliant operators generally maintain their buildings in a condition that avoids court-ordered receivership in the first place, thereby preventing such liens from arising. Owners with existing mortgages or other encumbrances on the property should understand that the lien priority rules in this section can affect the relative standing of those interests, particularly when required notices were or were not properly served.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
For tenants living in a building placed under court-ordered receivership, §§ 27-2001 & 27-2137 establishes the financial framework that allows the receiver to fund necessary repairs—even when rental income falls short—by creating a lien on the property itself. This mechanism is designed to ensure that remediation work can proceed and be paid for without the costs simply disappearing, which supports the receiver's ability to maintain habitable conditions. Tenants who have questions about an active receivership or their rights during one may find it useful to contact the New York City Department of Housing Preservation and Development or a local tenant-rights organization for general information.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 14, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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