By Joann Prinzivalli

In New York City, when Environmental Control Board liens (ECBs) are docketed with the County Clerk, they are enforceable in the same way as judgments for a lien period of eight (8) years from the entry date.

It has always been our understanding that ECBs must be cleared if they are docketed against the premises during the lien period regardless of the named judgment debtor, or are against the name of a party in title during the period of ownership, regardless of the address of the violation.

There has been some confusion among lawyers, and even some other title agencies, about the effect of these liens. Some have been under the impression that the lien was effective only if it was on the head against both the name of the owner and the address. This has never been our position at Insignia, and we have now heard it “on the street” that the cash-strapped City of New York has recently begun a more active crackdown on enforcement of these liens.

One way to avoid having ECB liens on other premises affecting a parcel, would be for the ownership of each parcel to be in a single purpose entity (SPE). The use of an SPE type of ownership would make it so that ECB liens, or any judgment or lien affecting another property, including, for example a large money judgment for a slip and fall on a sidewalk at that other property, won’t be an issue at a sale or refinance of a different property, even if the beneficial owner is the same. Considering the ease and flexibility of the New York LLC statute, the avoidance of dragging in ECBs and other liens that affect other properties is another advantage of keeping different properties in separate SPE ownership.