DOB Reduces Violations, Penalties to Achieve Mayor’s Executive Order

These 26 reforms are projected to save NYC small businesses roughly $1.5 million.

In January 2022, Mayor Adams signed Executive Order 2, “Small Business Forward,” to reform existing business regulations and ensure local businesses face fewer needless fines and penalties. The order required several city agencies to review their business regulations to determine which regulations could have reduced fines, extended cure periods, or be repealed to assist small businesses in their recovery from the ongoing COVID-19 pandemic.

The DOB was one of the regulatory agencies charged with evaluating its most heavily enforced law or rules through the issuance of notices of violations that are most frequently issued to small businesses. As part of the mandate, DOB itself proposed 26 reforms with a projected savings of approximately $1.5 million to New York City small businesses. Implementing these changes required an amendment to the Rules of the City of New York. As such, the DOB drafted the change in rules with the City Law Department and the Mayor’s Office of Operations, and the rules have been effective since Nov. 20, 2022. We’ll go over the changes put in place by the DOB and how the agency defines a small business.

Small Business Defined

A new paragraph has been added to Section 103-01 and Section 103-05 of Title 1 of the Rules of the City of New York that defines a small business as a business that employs fewer than 100 persons. Some of the implemented reforms may apply to all named parties and not just to those defined as small businesses. For the other reforms, the DOB added small business descriptions to specify who is eligible for reduced enforcement.

Violation Enforcement Changes (Rule 102-01)

To comply with the mayor’s executive order, the DOB has eliminated violations, extended the time an owner has to cure certain violations to avoid a hearing or penalties, and reduced penalties for certain violations.

Extended cure periods. The DOB has implemented a 60-day cure period for all Class 3 “Lesser Violations” and Class 2 “Major Violations.” This is an increase from 40 days to 60 days from the date of service of a notice of violation (NOV). This gives named respondents more time to submit a Certificate of Correction in these cases, and avoid a hearing and penalties.

It’s important to note that Class 1 DOB violations are considered immediately hazardous and are the most severe infractions. Therefore, cure dates are not offered for these types of violations and named respondents must submit a Certificate of Correction immediately and attend a hearing or pay the subsequent fine to close these violations.

Eliminated violations. In addition, the DOB has eliminated the following violations:

• Approved Place of Assembly plans not available for inspection (Class 2);
• Failure to conspicuously post electrical work permit while work is in progress (Class 3);
• Place of Assembly contrary to approved construction documents (Class 2);
• Electrical closet not dedicated to electrical distribution equipment only (Class 2 and 3); and
• Failure to provide cover/faceplate/lampholder/luminaire canopy for electrical outlet (Class 2).

Reduced penalties. The DOB has also implemented significant reductions in the penalties for violations, including the following:

• Electrical work without a permit (Class 3): The standard penalty has been reduced from $400 to $200;
• Work without a permit (Class 3): Standard penalty reduced from $500 to $250;
• Failure to post or properly post permit for work at premises (Class 2): All the penalties associated with this violation have been reduced. The standard penalty has been reduced from $625 to $300;
• Change in occupancy/use of C of O as per §28-118.3.1–§28-118.3.2 by “operating a Place of Assembly as per when current C of O does not allow such occupancy” (Class 2): All the penalties associated with this violation have been reduced. The standard penalty has been reduced from $500 to $250;
• Luminaires and lampholders not installed in an approved manner (Class 2): All the penalties associated with this violation have been reduced. The standard penalty has been reduced from $500 to $250.

The extended cure periods, eliminated violations, and reduced penalties apply to all named respondents. The city’s updated rule specifically removed language that would have limited the applicable scope. For example, the DOB removed language specifying extended dates for smaller properties (one-, two-, and three-family homes) and made no references to small businesses. In other words, there is no language within the rules to limit the violation enforcement changes to small businesses.

DOHMH Proposes Rules to Cure Violations,

Amend Water Tank Inspection Penalties

The mayor’s executive order from January 2022 called upon DOB, DEP, DSNY, the Fire Department of New York (FDNY), DCWP, and the NYC Department of Health and Mental Hygiene (DOHMH) to review business regulations, with the goal of reducing fine schedules and allowing for cure periods or warnings for first-time violations. The latest agency to propose such rules is the DOHMH. Here are the proposed changes:

Added Definitions

DOHMH added new definitions to enable named respondents to cure first-time violations. They include:

Cure. This means that the respondent has submitted proof of having corrected a first-time violation and DOHMH has accepted such proof.

First-time violation. This means a violation of law, listed in Appendix 7-A of this Chapter, committed by a respondent for the first time and cited on a summons that either is pending or has not been adjudicated by the Office of Administrative Trials and Hearings (OATH) as defaulted or sustained.

Summons. This means a document, including a notice of violation, issued by DOHMH to a respondent, that specifies the charges forming the basis of an adjudicatory proceeding at OATH.

Proof of Correction for Eligible First-Time Violations

Sections have been added to the rules listing the process for submitting proof of correction for eligible first-time violations (Section 7-10) and DOHMH’s process for accepting the correction (Section 7-11).

According to the proposed rules, the submission of proof of correction must be in writing in a form approved or provided by DOHMH. And the proof must be submitted to the department electronically or in person within seven calendar days of the date the violation was issued as recorded on the summons.

The proposed rules go on to say that acceptance of proof of correction constitutes a cure and an admission of the violation and a first-time violation whose proof of correction has been accepted by the department will not be subject to a civil penalty. The determination of whether a violation is a first-time violation will be based solely on the department’s records.

DOHMH may require further documentation in addition to the proof of correction and may inspect the establishment or take any other action as it deems necessary before acceptance or rejection of such proof.

New Violations and Adjusted Penalties

The proposed rules include an appendix that lists new DOHMH infractions, and related penalties. Notable infractions include failing to test drinking water for lead ($800 default penalty), failure to post permits in a clean, transparent cover clearly visible to the public ($100 per day), and failure to conspicuously post required notices (also $100 per day). The proposed rules designate the last two violations as eligible to be cured as a first-time violation.

Water Tank Enforcement

DOHMH has also released a proposed rule amending drinking water tank inspection penalties. The proposed rule creates new penalties in addition to adjusting current ones. Generally, according to the proposed rule, there would be increased fines for failure to submit the report and failure to provide specifics in the report as required by the law. Here are some of the proposed adjustments:

Violation                                                                                                                           Penalty                Default

Failure to submit report of prior year’s inspection results by Jan. 15                           $250 to $500      $500 to $1,000

Failure to have the drinking water analyzed by a state-certified lab                                 $500                   $1,000

Failure to maintain for at least 5 years required water sampling records                          $250                   $500

Failure to provide documentation that displays visual depiction of water tank                  $250                   $500

Drinking water tank inspected by someone other than a water tank inspector                 $500                 $1,000

Failure to report water tank’s unsafe conditions to the DOB in writing                               $250                   $500