News | Proctor Real Estate Law, PLLC

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New Building Façade Maintenance and Safety Rule

The New York City Department of Buildings (“DOB”) has a new rule relating to the safety and upkeep of building façades, particularly concerning parapet walls. A parapet wall is a protective barrier found on the edge of our building's roof, similar to those on bridges or balconies.

As of September 2023, the rule titled "periodic observation of building parapets requirement" takes effect. This regulation mandates inspection requirements for all buildings that have parapet walls extending above their roof lines.

Importantly, this rule was implemented as a proactive measure to ensure safety and not made in response to any tragic incident, distinguishing it from regulations such as Local Law 11.

This new rule encompasses all buildings with a few exceptions:

Single-family and two-family homes.
Buildings where the exterior wall structure presents an obstacle to accessing the parapet for inspection.
Instances where a parapet wall is retracted from the building's edge, necessitating a landing area for debris during a collapse.
Situations where an enclosing fence shields the parapet, preventing debris from falling.

Annual inspection for parapets overlooking a street must be performed. This means owners must hire a professional to carry out an inspection, document the condition, and produce an annual report. Fortunately, the DOB has provided flexibility in the choice of inspector. Owners have the option to engage an architect or engineer for the inspection, but DOB has permitted building superintendents, handymen, and even insurance company inspectors to conduct the inspection. This flexibility can will help owners manage costs while ensuring compliance.

Owners are not required to submit their reports to the DOB, unless it expressly requests such report. It is an owner’s best practice, however, to retaining a comprehensive record of all inspections.

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Landlords (including shareholders and unit owners who rent their apartments) Must Disclose Flood History

Real Property Law Section 231-B, effective as of June 21, 2023, now requires all landlords to provide a notice to their tenant(s) regarding the leased premises' previous flood history and current flood risk. The history does NOT apply to floods caused by broken pipes or overflowing toilets, but rather to floods from natural events, such as heavy rainfall, coastal storm surges, river overflows, etc.

The required notice must detail any damage that resulted from the flood and whether the leased premises is within a FEMA floodplain, a Special Flood Hazard Area and/or a Moderate Flood Hazard Area. To determine whether the premies is within these areas, the landlord must consult the Flood Insurance Rate maps. Finally, the notice must contain a statement about the availability of flood insurance and the limitations on ordinary policies.

Contact Proctor Real Estate Law for the specific language necessary for this notice.

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The Uniform Partition of Heirs Property Act

In the realm of real estate law, few matters are as complex and emotionally charged as actions involving family members. Several states, including New York, passed legislation to protect family members who want to divide, or sell, property co-owned with family members. New York’s statute is called the Uniform Partition of Heirs Property Act (“UPHPA”).

Purpose of the UPHPA

The UPHPA was designed to safeguard the property rights of people who inherited property from family. If someone who owns land passes away without a will, the property is inherited by their family members as co-owners called "tenants-in-common." If any co-owner decides that it’s not in their best interest to own the property with family, they can start what is called a “Partition Action” and demand that the land be divided by each owners’ interest, or if it cannot be divided, that the property is sold and the proceeds from the sale split according to each owner’s interest.

The Necessity of the UPHPA

Prior to passage of the UPHPA, many nefarious investors would track down co-owners, buy one owner’s interest, and then start a Partition Action against the remaining owners to force a sale of the property at an auction. These investors ruined generational wealth by transferring the property out of the family, often single property was the family’s most valuable asset, at below market prices.

Partition Actions Involving Family Members: A Delicate Balancing Act

The UPHPA does not prevent a Partition Action. Instead the Act added steps to ensure that co-owners have an opportunity negotiate with their family members and either buy each other out, or get the best possible sale price for the property.

The UPHPA pertains to:

“Heirs property” which is property held in tenancy in common and satisfies all of the following requirements:

(i) there is no agreement governing the partition of the property; and

(ii) any of the co-tenants acquired title from a relative, whether living or deceased; and

(iii) any of the following applies:

(A) twenty percent or more of the interests are held by co-tenants who are relatives; or

(B) twenty percent or more of the interests are held by an individual who acquired title from a relative, whether living or deceased; or

(D) any co-tenant who acquired title from a relative resides in the property.

Timeline:

Partition Actions not regulated by the UPHPA could generally be resolved within one year. Under the UPHPA, however, the parties in a Partition Action are required to participate in a settlement conference after the action has been commenced. This conference can be postponed at the request of any party to the lawsuit. Additionally, if the parties cannot agree on the value of the property, the court must order an appraisal by a disinterested appraiser, licensed in New York, to determine the fair market value of the property. Parties then have the right to challenge the appraisal. Further, the property must be marketed and sold by a broker, and not at an auction.

All of these steps take time and means that most Partition Actions under the UPHPA take well over a year to resolve.

Expert Legal Counsel is Key

Securing competent legal counsel is essential for families entangled in Partition Actions governed by the UPHPA. Proctor Real Estate Law can provide assistance negotiating with family members and make good faith efforts to reasonably, and quickly, resolve your dispute. If settlement cannot be achieved, Proctor Real Estate Law can litigate a Partition Action on your behalf in a cost effective manner.

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City Council Introduces a Bill to Streamline Cooperative Applications

Designed to streamline the purchasing process and ensure fairness for prospective buyers, City Council Bill INT 914 imposes specific requirements on co-op boards while providing protections for applicants. In this article, we will explore the key provisions of INT 914 and its potential impact on co-op housing transactions in the city.

Standardized Application Process

Under the proposed bill, co-op buildings with 10 or more units are mandated to maintain a standardized application and list of required documents for all potential purchasers. This standardized process aims to create consistency and transparency throughout the application process, making it easier for applicants to understand and meet the requirements set by the co-op board.

Responsibilities of the Co-op Board

The co-op board or managing agent of the co-op is responsible for promptly providing the standardized application, list of required materials, and submission instructions to any applicant and seller upon request. The board must acknowledge receipt of the application within 10 days and inform the applicant of its decision within 45 days. The board may request a 14-day extension, with the applicant's consent, or in cases where the board does not meet during the months of July and August.

Communication and Compliance

If an applicant fails to provide the necessary documents or comply with the board's requirements, the board must notify the applicant in writing, specifying the missing items or non-compliance. The 45-day approval timeline can be extended up to three times, allowing the co-op board to receive additional materials from the applicant.

Legal Remedies and Protections

In cases where a co-op board fails to comply with the requirements outlined in the legislation, the applicant or seller has the right to initiate a court action to determine if the board is in violation. The court may assess statutory damages against the co-op corporation, including $1,000 for failure to provide the standardized application or acknowledge receipt of materials, $5,000 for failure to maintain a standardized application, and $10,000 for failure to provide timely notice of approval or rejection.

While a court cannot compel a co-op board to approve a sale, it may award compensatory damages and attorney's fees to the applicant and grant appropriate equitable relief. Additionally, the New York City Commission on Human Rights is empowered to investigate violations and impose civil penalties ranging from $1,000 to $25,000.

Enhancing Fairness and Transparency

The implementation of City Council Bill INT 914 brings much-needed clarity and accountability to the co-op purchasing process in New York City. By mandating standardized applications, setting clear timelines, and imposing penalties for non-compliance, the legislation aims to foster a fair and transparent environment for applicants and protect their rights throughout the process.

Conclusion

New York City Council Bill INT 914 represents a significant step towards ensuring fairness and transparency in co-op housing transactions. By establishing standardized application procedures, setting clear timelines, and providing legal remedies, the legislation seeks to streamline the process and protect the rights of both applicants and sellers. If enacted, this bill has the potential to create a more efficient and equitable co-op housing market, benefiting individuals seeking to purchase co-op units in the vibrant city of New York.

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Local Law 97 Compliance Deadline Looms

Starting in 2025, buildings over 25,000 square feet must submit an emissions report stamped by a registered architect or licensed engineer on May 1 every year to the City. The purpose of New York Local Law 97, a part of the Climate Mobilization Act passed in 2019, is to reduce greenhouse gas emissions in New York City.

Key aspects of Local Law 97 include:

Emission limits: The law establishes strict emission limits based on building type and size. These limits will become more stringent over time, with two phases of reductions - the first set of limits taking effect in 2024-2029 and the second in 2030-2034.
Carbon trading: Local Law 97 creates a framework for a future citywide carbon trading program. This program would allow building owners to trade carbon credits among themselves, providing flexibility to meet emission targets.
Reporting and penalties: Building owners are required to report their annual emissions to the city. Failure to meet the established emission limits can result in significant financial penalties.
Advisory board: The law establishes a Climate Advisory Board, consisting of experts and stakeholders, to help guide the city's efforts and recommend strategies for achieving its goals.

The costs of compliance are quite high. Coop and condo boards will have to conduct energy audits to identify areas of inefficiency and develop strategies to improve building performance. Upgrades (LED lighting, energy-efficient windows, new boilers) can be done, but larger projects, such as the installation of solar panels and new energy-efficient laundry facilities, should be considered by older, less efficient buildings.

In light of the significant costs of compliance with Local Law 97, organizations such as Homeowners for a Stronger New York, are seeking tax breaks that will help middle-class co-ops and condos pay for renovations to meet caps on their buildings' carbon emissions under the new law.

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Court Decision Highlights Importance of Using Third Party to Oversee Elections

Recently, WVH Housing Corporation held a high-stakes election for four coveted board seats during their annual meeting. The Board hired a company to oversee the election. Shareholders were able to vote in person, by proxy, by directed proxy or by online ballot. The entire process was administered by a third party contractor hired to handle the election. Shortly after the meeting, the contractor distributed the results of the election to all shareholders via email. However, after the results were tabulated, the Board president realized she had failed to submit 65 proxy ballots.

The president forwarded the ballots to the contractor, leading to a re-tabulation the following day. The updated count resulted in three out of the four directors initially elected being ousted.

The Board then made a controversial decision: call a new meeting and conduct a re-vote. Two shareholders objected to the Board’s plan and initiated legal proceedings to uphold the original election results and prevent the board from organizing a re-vote. In response, the Board sought to dismiss the shareholder petition and requested the court to mandate a new election.

Was the election truly "so clouded with doubt or tainted with questionable circumstances" that it warranted a new election? The court didn't think so. The Court cited Business Corporation Law §619, which clearly states that no proxies or ballots may be accepted after the polls close. Consequently, the Board could not nullify a completed vote simply because the board president or any other shareholder neglected to cast their votes within the specified time frame.

Board elections in large buildings can be overwhelming. Many directors and officers serve on boards while also working full time jobs. The best way for large associations to manage elections might be with the help of third parties responsible for distributing and tabulating all ballots.