Sometimes you pay direct to the city.
Sometimes you pay with your mortgage payment.
Sometimes there might be arrears or money owing.
Under the law, if there are arrears this debt can take precedent over the first mortgage holder.
So……banks in general took a big interest in collecting this and equity lenders may INSIST the property tax is paid.
To help mitigate risk.
Think it depends on the length of the arrears and amount. That being said, a bank might want proof that taxes are paid and up to date. There has been two extreme examples we have seen where one home was sold off by a bank and the same bank caused such anxiety that the client had health issues, serious issues. Again, best resolved promptly.