Anglo Irish Bank has ended up advancing millions of dollars to cover unpaid property tax, operating and construction costs on a New York city condominium development it foreclosed earlier this month.

The bank is providing $2m to finish building works and to pay for heat, electricity, hot water and staff at Rector Square, a partly-occupied Battery Park development it financed for $165m in 2005.

Anglo is also fronting an unspecified amount to replace missing property tax payments made by the condo owners to the previous property manager, but which appear to have been misspent or mislaid. Annual property tax payments, due to the local authority, could exceed $2m. A spokeswoman for Anglo would not comment on the figure.

Last month, Anglo petitioned the New York state Supreme Court to foreclose on Rector Square after developer Yair Levy had failed to keep up with payments on the $117m remaining on a $165m mortgage from the bank. Levy also violated several conditions on the loan which required him to complete renovations to the building, maintain a common fund for utilities and basic services, and pay local authority charges, including $631,000 in lease payments to Batter Park City Authority.

A letter sent by the receiver, Michael Miller, to Rector Square residents two weeks ago indicates that Levy and his property manager, Cooper Square Realty, put capital money and payments set aside for taxes into the common fund and spent it down. Nonetheless, residents were left without heat and hot water for several days this winter as basic services were shut off for failure to pay.

According to residents quoted in local newspapers, common areas for the 204-unit building had been left unfinished, with exposed wiring.

The judge who granted foreclosure is requiring Anglo to put $2m towards completing the renovations on the building, which was erected in 1985 on infill along the Hudson River in Lower Manhattan.

Levy is the founder of YL Real Estate developers and one of the most prominent property moguls in New York. He has ownership stakes in billions of dollars worth of developments in the city, including the troubled Anglo-funded Park Columbus on the Upper West Side, where contractors are suing Levy for failure to pay.

Anglo has also been embroiled in the landmark Apthorp Building, where its $393m mortgage has been thrown into jeopardy as one of the owners is contesting the terms of a loan restructuring after months of court battles with his business partner over control of the project.