The NYC Department of Environmental Protection (DEP) bills for water and sewer separately from property taxes. When bills go unpaid, DEP attaches a lien to the property — and those liens can also be sold in the annual NYC lien sale.
The good news: a DEP lien does not stop a sale. Like any lien, it gets paid off at closing from the proceeds. As long as the home has enough equity to cover the lien plus the mortgage, the sale closes normally.
Where homeowners get into trouble is when the water debt grows for years undetected — sometimes from a leak, sometimes from estimated billing on a vacant property. By the time it's noticed, the balance can be tens of thousands of dollars.
If you've gotten a DEP delinquency notice or the water bill arrived while handling an inherited or vacant property, get a payoff figure first. Then you can decide whether to pay it down, dispute it, or sell and let the title company handle it.