Yes, and it is one of the most expensive traps in New York City real estate. When HPD issues a vacate order, the City bills the owner for sheltering the displaced tenants, often in private hotels. That billing is often not recorded as a lien for months, so a buyer can close on a building with a clean-looking violation search and take title to a liability that can run into tens of thousands of dollars.
Free consultation: call 718-291-8555 or send us the address. Building Expediting Systems has cleared NYC violations for 27 years from our office in Forest Hills, Queens.
How the Trap Works
- A vacate order is issued, often after an illegal conversion or a fire or water loss. See what an HPD vacate order is.
- Tenants are placed by the City, frequently in hotels, and the cost is billed to the owner monthly.
- The bills go unpaid, especially when the owner is planning to sell.
- The lien is recorded months later, after the sale has closed.
- The new owner inherits it. The charge attaches to the property, not to the person who owned it when the tenants were placed.
Why Standard Searches Miss It
Title searches find recorded liens. Violation searches find open violations. Relocation billing that has been accruing but has not yet been recorded falls between the two, and most buyers, brokers and even some attorneys don’t know to look for it.
How to Protect Yourself as a Buyer
- Check for any vacate order, current or past, on the building, not just open violations.
- Ask specifically about relocation and hotel billing tied to the property, and get it in writing.
- Negotiate protection in the contract, such as an escrow or seller indemnity, if there is any history of a vacate order. Ask your attorney about the right language for your deal.
- Order a pre-purchase search that covers unrecorded exposure. Ours does. See what a pre-purchase violation search should cover.
Already Own a Building With This Problem?
If tenants placed by the City are still being billed to your property, there is a procedure to notify HPD that, as of a stated date, you are no longer responsible for their billing. See how an owner stops being billed for an HPD-placed tenant.
Frequently Asked Questions
Can a buyer be responsible for a previous owner’s HPD relocation charges?
Yes. Relocation charges billed after an HPD vacate order attach to the property and can become a lien. If the lien is recorded after closing, the new owner can end up responsible for it.
Will a title search find HPD hotel or shelter billing?
Only once it has been recorded as a lien, which can take months. Charges that are accruing but not yet recorded can be missed by a standard title search.
How do I check a NYC building for vacate orders before buying?
Search HPD and DOB records for current and past vacate orders and ask specifically about relocation billing. Building Expediting Systems includes this in its pre-purchase search, with a free consultation to start.