OGDENSBURG — City officials have allowed a family to live three years virtually for free in a home the city took over for back taxes.

“It’s a black eye,” said Arthur J. Sciorra, city manager. “It’s clear that this fell through the cracks.”

The property at 819 Knox St. was obtained by the city through foreclosure on June 23, 2008, after the previous owner, Barry Burke, was unable to pay $25,900 in delinquent property taxes. When the city took control of the property, it was still inhabited by the previous owner’s brother, Brett A. Burke, his wife, Barbara Seguin, and their three children.

“We live here now,” Mr. Burke said Tuesday. “We’re waiting to close on the property.”

However, according to Philip A. Cosmo, city comptroller, the family has paid no rent or taxes on the property since the city took the title.

“The way I look at it, if people have been living there three years, we’re out about $18,000 in revenue from rent alone,” said Michael D. Morley, deputy mayor.

The single-family home had an assessed taxable value of $86,200.

“Nobody seems to be in charge,” said Mr. Morley. “No one seems to know anything.”

“I had no idea about this situation,” said Mr. Sciorra. “I know about it now.”

According to a series of emails from J. Justin Woods, city director of planning and development, to Code Enforcement Officer Mark Jacobs, Mr. Sciorra was being updated on the situation as early as April 2009, when the family notified the city of their intention to buy the home. He was also included in emails sent later that year and was again reminded of the property’s status in a July 20 memorandum from Mr. Woods.

“As soon as the city took the property, the Burkes contacted us and told us they wanted to stay,” Mr. Woods said. “They didn’t have much money and wanted us to work with them.”

Normal procedure is for the city to either sell tax-foreclosed property to its current tenants, or to have the tenants evicted, Mr. Sciorra said. When the city took title, the property was below code and uninhabitable, Mr. Woods said. The city used a portion of $124,760 granted from the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program to perform maintenance and repairs on the property.

At the time, the grant application said the city estimated that repairs to the property would cost $55,000 due to “years of neglect.” According to the memo, rehabilitation work was completed in December 2010.

“I can tell you that the work done on the house is very subpar,” Mr. Burke said.

While the city had to seek out grant funding for the family, it did not seem to bring the issue of a non-paying tenant living in city-owned property to light.

“Before we did the rehabilitation on it, we had to inspect the house,” said Mr. Morley. “The house was inspected, people were living in it and we didn’t report it.”

Mr. Morley said that housing rehabilitation, once managed by the city, is now contracted out to C.W. Augustine Inc. of DeKalb Junction. Since that time, Mr. Morley said the city has had difficulty keeping up with tax-foreclosed property in its various rehabilitation programs.

“We used to get reports,” said Mr. Morley. “Since we started contracting out the work, we don’t get them anymore.”

Mr. Burke said that the arrangement to live tax and rent free was not his idea. He said it was the city’s idea.

“I was asked not to pay rent to the city,” said Mr. Burke. He declined to reveal who made the request.

Mr. Cosmo inquired about setting up a lease and charging the family rent for the property in 2009, according to emails among officials obtained Tuesday, but the city attorney working on the case, A. Michael Gebo, did not follow up on the inquiry.

“I recommended we not charge rent, only water and sewer fees,” Mr. Woods said. “We could have been obligated to pay rent if we had to relocate the family during the home rehabilitation, according to the Neighborhood Stabilization Program.”

In a Sept. 22, 2009, email, Mr. Woods addressed the issue.

“If they continue ‘squatting’ and move voluntarily before we begin renovations, then we won’t open that can of worms,” he wrote.

Mr. Woods also cited theft and vandalization of vacant city-owned properties as reasons to keep the family in the home while negotiating the sale of the property.

Councilman Douglas G. Sholette pointed the finger at Mr. Woods.

“I assumed that our housing and planning director was on top of things, and he wasn’t,” said Mr. Sholette. “I assume the city manager is taking care of it.”

Also at issue was whether the tenant family would have to move during rehabilitation and renovation.

“How did we renovate the house with people living it?” said Mr. Morley. “We’re talking about knocking down walls and rebuilding plumbing — we could have exposed them to asbestos or lead paint.”

The question remains whether the city will pursue collecting back rent and taxes from the Burke family.

“I’d like to see us collect it,” said Mr. Morley. “Until it’s sold, we should be collecting rent. I can’t tell you how much we put into rehabilitating it, but I’m sure we’re going to lose money,”

In internal email, the city also discussed the possibility of evicting the tenants.

“That sat for months on a previous attorney’s desk,” said Mr. Sciorra. “No one actually looked at the fact that someone was living there.”

If the property is sold to the current tenants, Mr. Sciorra said that the city will recoup back taxes as part of the sale.

“I hope to have the sale of the property before the council soon,” said Mr. Sciorra. “In the end, we’re going to get this on the tax rolls.”

In the meantime, Mr. Burke hopes that the city won’t pursue back rent as he waits to close on his house.

“We won’t be able to pay,” said Mr. Burke. “We have a good thing here, and they’re going to ruin it.”

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