In a decision stronger on emotion than analysis, the Court of Appeals in Rivera v. HPD¹ recently eliminated a building owner's rapid path to determining the validity of liens placed against its building for housing preservation & development's expenses in relocating the building's tenants when the building became the subject of a city agency-issued peremptory vacate order. Assuming that the landlord is always at fault in such situations, the court allowed but a single avenue to contest the liens' validity.

Under existing law, where a building suffers an injury sufficient to require city-ordered vacating of one or more apartments and the city believes the landlord to be at fault for the building's injury, the city's Department of Housing Preservation and Development (HPD) can pass along the relocation expenses to the landowner via liens peremptorily filed against the building. Those liens become the equivalent of mechanics' liens, enforced through foreclosure proceedings authorized by the state's Lien Law through RPAPL Article 13 foreclosure proceedings.

There is both before and after Rivera, no procedure to challenge these liens except through state Supreme Court. This is unfortunate as the Civil Court's Housing Part has both the expertise and capacity to adjudicate both the finding of landlord fault and the justifiability of the city's expenses, routine matters that courts adjudicate when enforcing the laws against landlords.²

The Issue Before The Court

Rivera should only have addressed the issue actually before the court—whether an owner could use the summary discharge procedure of Lien Law §19(6) (Supreme Court order to show cause to challenge the lien) to address the validity of the amount of the lien. Instead, the court purportedly barred any address of the merits of the lien in such procedure, so long as the notice of lien appeared facially proper, writing, “Summary discharge addresses only the facial validity of the notice of lien and leaves disputes regarding the claimed expenses in the underlying liens to be resolved at a foreclosure hearing or trial.” Reiterating this position, the court cited to pre-RPAPL/pre-CPLR³ precedent, stating, “the resolution of disputes regarding the expenses claimed in a lien, should be decided after a trial, and not in a summary proceeding.” The court does not explain how CPLR 410's mandate for trials in special proceedings⁴ does not mandate trials.

Relocation Liens

The New York City Administrative Code (Code) confers upon HPD the duty to: