Former owners of the 64 properties New York City took and transferred in Round 10 of its Third Party Transfer program, including HDFC co-op shareholders, are covered by a $60 million settlement a federal judge preliminarily approved on October 21, 2026. Claims are not open yet; notice and claim forms are to be mailed to known owners first.
What Is the Round 10 Settlement?
New York City has agreed to pay $60 million to settle claims by former owners whose properties it took through Round 10 of the Third Party Transfer (TPT) program and transferred without paying them the value of the property above what they owed in taxes and other charges. Judge Jennifer L. Rochon of the U.S. District Court for the Southern District of New York preliminarily approved the settlement on October 21, 2026, in Dorce v. City of New York, No. 1:19-cv-02216, a class action filed in March 2019.The defendants, which include the City, the commissioners of the Department of Housing Preservation and Development (HPD) and the Department of Finance, and the nonprofit Neighborhood Restore Housing Development Fund Corp., deny the allegations and say they complied with the law at all times. The settlement does not resolve claims tied to the program’s earlier rounds.
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How the Third Party Transfer Program Worked
Under the TPT program, which the City has run in 10 rounds since 1996, the City brought in rem foreclosure proceedings against properties with unpaid tax liens and other charges and transferred title to third parties rather than selling them at auction. The plaintiffs claim the City took the full value of each property, including the equity above the debt owed, without paying any of that surplus to the former owners.In Round 10, the foreclosure judgments were entered on or about December 14, 2017. According to the settlement papers, the City transferred title to 64 properties containing about 839 units. Thirty were multi-unit buildings owned by housing development fund corporations (HDFCs), the limited-equity co-ops whose residents own shares in the building. The properties were conveyed to Neighborhood Restore.
The case was dismissed early on and revived by the Second Circuit in 2021. In 2023, in Tyler v. Hennepin County, the Supreme Court held that a county violated the Takings Clause by keeping the surplus from a tax foreclosure sale beyond the tax debt. The plaintiffs’ settlement brief relies on that decision.
Who Is Covered
The settlement class is all former owners of Round 10 properties, including HDFCs and HDFC shareholders, whose property was conveyed to Neighborhood Restore through the in rem foreclosure proceedings the City brought in Round 10 of the TPT program. Class members who do not opt out are bound by the settlement.Former owners whose properties were taken in Rounds 1 through 9 are not part of this settlement. Their claims are still being litigated in the same case, and a magistrate judge heard argument on a motion to certify a class for those rounds on October 22, 2026.
How Payments Would Be Calculated
The $60 million figure was derived from HPD’s internal 2018 desktop appraisals of the Round 10 properties, which both sides accepted as a starting point while disputing whether the true values were higher or lower. After court-approved attorneys’ fees, administration costs and service awards are deducted, the remaining fund is paid to approved claimants in stages:- First distribution: 30 days after the settlement becomes final, approved claimants receive an initial pro rata share of the net fund.
- Second distribution: claimants receive their full pro rata share, and those whose calculated surplus equity is below $25,000 are paid a $25,000 minimum.
- True-up: a later payment brings earlier recipients up to their full pro rata share.
Each claimant’s total is capped at an “individualized recovery ceiling,” the greater of the property’s calculated surplus equity plus interest or $25,000. Money left after those rounds goes into an undisbursed funds pool for two years, during which class members who did not file, or whose claims were denied for insufficient documentation, can still submit claims or more information. Anything left after that reverts to the City.
Class counsel may ask for up to 30% of the fund in attorneys’ fees and costs, and for $35,000 service awards for each of two named plaintiffs. The court will decide those requests.
How to Claim and Key Dates
Claims are not open yet. Simpluris, the court-appointed claims administrator, will mail the class notice and claim form to known former owners and HDFC shareholders using records the City provides, and may also email or text them, post flyers in the Round 10 buildings and publish notice locally. The settlement website, TPTRound10Settlement.com, currently says administration has not begun.Under the schedule proposed in the settlement papers, notice goes out within 30 days of preliminary approval or of the administrator receiving the City’s records, whichever is later. Claims, opt-out requests and objections are due 90 days after that notice date, and a reminder notice follows 45 days after it. The claim form asks for documentation supporting the claim, which the administrator reviews under a preponderance-of-the-evidence standard. The final approval hearing is set for May 5, 2027 at 10:00 a.m. The exact deadlines will be printed on the mailed notice.
Other tax-foreclosure surplus settlements that followed the Tyler decision include 28 Michigan counties and six Oregon counties.
Questions
Who is covered by the NYC Third Party Transfer Round 10 settlement?
All former owners of Round 10 properties, including housing development fund corporations (HDFCs) and HDFC shareholders, whose property was conveyed to Neighborhood Restore through the in rem foreclosure proceedings New York City brought in Round 10 of the Third Party Transfer program. The Round 10 foreclosure judgments were entered on or about December 14, 2017.
How much will former owners receive from the Round 10 settlement?
Approved claimants share the $60 million fund, after fees and costs, pro rata based on the surplus equity the parties calculated for each property, up to an individual ceiling equal to the greater of that surplus equity plus interest or $25,000. Claimants whose surplus equity is under $25,000 are paid a $25,000 minimum. Payments come in several rounds after final approval.
Can I file a claim in the TPT Round 10 settlement yet?
Not yet. The settlement website, TPTRound10Settlement.com, says administration has not begun. Under the proposed schedule, notice and claim forms are mailed to known class members and claims are due 90 days after the notice date. The claim form asks for documentation supporting the claim.
Does the settlement cover properties taken in earlier Third Party Transfer rounds?
No. The settlement resolves only Round 10 claims. Claims by former owners whose properties were taken in Rounds 1 through 9 of the program are still being litigated in the same case.
Sources
• Dorce v. City of New York, No. 1:19-cv-02216 (S.D.N.Y.): order granting preliminary approval (ECF No. 542, October 21, 2026) and memorandum of law in support of preliminary approval (ECF No. 536, September 11, 2026), via the CourtListener docket.• Settlement website: TPTRound10Settlement.com.
