Saturday 16 December 2017

Not Your Grandfather’s City

Rules and regulations from New York City government agencies change on a constant basis. While new or revised laws are often meant to be protective for tenants and landlords, they are nonetheless very onerous and cumbersome. With over one thousand city inspectors who issue more than 500,000 violations annually across 975,000 buildings, New York City is one of the most challenging arenas for real estate management. With new laws, strict regulations, high fines and aggressive collection methods, managers need to adapt quicker than ever to avoid penalties. After all, it’s not your grandfather’s city anymore.

This column will highlight some of the latest regulations affecting New York City property management.

ENVIRONMENTAL CONTROL BOARD
In the past, recipients of ECB violations had twelve months to reopen a defaulted violation. The new guidelines issued by ECB drastically shorten the reopening time frame to only 45 days from the original hearing date. As per the new regulations, reopening a defaulted violation after 45 days will only be allowed if specific documented proof was available (e.g. respondent was not the owner of the property at the time the violation was issued). ECB further limits the reopening of violations by only allowing violations to be reopened one time. Therefore, it is more critical than ever to ensure that all the proper proof documents are in order before attempting to reopen a violation.

Speaking of having proof documents in order, ECB has now instructed the Administrative Law Judges to not grant adjournments at hearings except in truly extenuating circumstances. Therefore, in order to be able to have your violation dismissed or penalty reduced at the hearing, you must be ready to provide all proof at the first hearing.
DEPARTMENT OF BUILDINGS AND FDNY
The DOB and FDNY violations that are not dismissed at a hearing require a certificate of correction to resolve their status. In order to certify correction for DOB violations, you are now required to provide actual pictures of the corrective work that was done, even when an application was filed and signed off.

The Boiler, Elevator, and Façade divisions of DOB will no longer accept new building ownership as grounds for dismissal for violations issued for not filing the required reports.  They now take the position that it is the new owners’ responsibility to make sure there were no violations prior to purchasing the building.
Several DOB penalty amounts have increased significantly. Boiler violation penalties have increased from $500 per year per building to $1,000 per year per boiler. Elevator violation penalties have increased from $1,000 per elevator device to $3,000 per elevator device (personal elevators, dumbwaiters and escalators included). Façade violations have increased from $150 per month for late filing to $250 per month along with an additional $1,000 penalty for every year filing late. In addition to these penalties, filing fees were increased for all of the above reports.

The last new law I wanted to share with you comes from New York State; yes, they’re getting involved too. The NYS Assembly has passed a law requiring DOB to collect, for the benefit of the state, a $1,500 civil penalty for all Class 1 Immediately Hazardous violations that are not certified as corrected within 60 days of issuance. Any such violation, that is not certified as corrected within that time frame, will receive an additional DOB violation that can only be dismissed once the $1,500 payment is received. This penalty is separate from the ECB penalty and the DOB civil penalty for work done without a permit. This is potentially a third penalty for the same violation.

Even though it can be difficult at times, we still love managing real estate in New York City. Staying knowledgeable and prepared only make it easier.

Mark Hertz is president at Mark Hertz Company, which specializes in professional ECB representation and expediting services to reduce violations for sales, refinancing and real estate tax abatement (J51). For more information contact (888) 338-9606 or www.dobnycviolations.com.

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