New Reasons DOB May Deny Your Permits: Excessive Violations, Monies Owed

In March, two local laws affecting owners’ ability to pull permits from the DOB have gone into effect. While Local Law 104 of 2019 and Local Law 160 of 2017 have been on the books for some time, the DOB and HPD only recently have issued details for enforcement of these regulations.

As of March 4, 2021, the DOB will deny applications for initial work permits for multiple dwellings with “excessive violations” (Local Law 104). In addition, as of March 1, 2021, the DOB will deny New Building and Alteration-CO permits for any building where more than $25,000 in covered arrears is owed to the city (Local Law 160).

Violation Counts

Local Law 104 was created to deny building permits where a residential building has an excessive number of violations. According to the text of the law, it went into effect 210 days after it became law. This date was Jan. 4, 2020, but the DOB issued a service update with enforcement clarification as of March 3, 2021.

Local Law 104 applies to multiple dwelling buildings. A recent press release from the city announcing the enforcement of Local Law 104 stated:

DOB will create and maintain a list of multiple dwellings in New York City with excessive, open, and hazardous DOB and Housing Preservation and Development (HPD) violations in relation to the number of residential units. The list will be updated daily. Buildings placed on this list will be prevented from obtaining new permits until the violations are resolved and the conditions are corrected, except in situations where permits are necessary to correct a violation or other select circumstances.

The list hasn’t been made publicly available yet, but the DOB’s Buildings Information System (BIS) is keeping track of the flagged properties.

Violation ratios. The permit restriction will apply to violations issued on or after Jan. 4, 2020, the date Local Law 104 went into effect. Restrictions will address violations that haven’t been certified as having been resolved with DOB or cleared by HPD. The permit denials will be applied to buildings with the following ratios of violations to dwelling units:

• Buildings with 35 or more dwelling units and two or more violations for every unit; and
• Buildings with fewer than 35 dwelling units and three or more violations for every unit.

The permit restrictions will also be applied to submissions in the DOB NOW portal in the near future. If the number of units used to determine your building’s violation ratio is incorrect, you can contact HPD for help: Email codevios@hpd.nyc.gov and include the address, borough, block, and lot of your building and a scan of the Certificate of Occupancy, if available.

Violation types. The DOB is counting both DOB and HPD violations in its “violations per unit” total. The following are the kinds of violations DOB uses to create the list:

• Class B & C violations (HPD): Class B and C violations that haven’t been cleared (open hazardous or imminently hazardous violations) will count toward the violations per unit total.
• Class 1 & 2 OATH (ECB)-related infractions: Class 1 and Class 2 OATH summonses issued by DOB that haven’t been certified as corrected will count toward the violations per unit total.

Exceptions. Requests for exceptions will be added to any job filing in BIS on a flagged property. To obtain a permit in BIS on a flagged building, you must submit a Local Law 104 of 2019 Request for Exception to Permit Restriction form indicating that one or more of the below exceptions applies, with the required documentation. Both the applicant and the owner must sign this form. Here are the exceptions:

• The permit is for a dwelling unit that’s owned as a condominium or held by a shareholder of a cooperative corporation under a proprietary lease.
• The issuance of the permit is necessary to correct an outstanding violation of the Construction Code, the Housing Maintenance Code, or any other applicable provisions of law or rule.
• The issuance of the permit is necessary to perform work to protect public health and safety. (Documentation, including dated color photographs, must be submitted.)
• The permit is for a portion of the property occupied by a tenant who isn’t an owner of the property or responsible for any existing violations on the property.
• The property was the subject of an in rem foreclosure judgment in favor of the city and was transferred by the city to a third party pursuant to Section 11-412.1 of the Administrative Code. (Documentation must be submitted.)
• The property is the subject of a court order appointing an administrator pursuant to Article 7-a of the Real Property Actions and Proceedings Law in a case brought by HPD. (HPD documentation must be submitted.)
• The property is the subject of a loan provided by or through HPD or the NYC Housing Development Corporation (HDC) for the purpose of rehabilitation that has closed within the preceding five years. (HPD or HDC documentation must be submitted.)
• The permit is required in connection with the implementation of an HPD or HDC program. (HPD or HDC documentation must be submitted.)

Arrears to the City

As of March 1, 2021, as required by Local Law 160 of 2017, the DOB denies New Building and Alteration-CO permits if:

• $25,000 or more in covered arrears is owed to New York City with respect to the property for which the permit is being sought; or
• The owners of the property together owe $25,000 or more in covered arrears to the city.

These specific types of permits involve demolition, place of assembly, or major alteration that will change the use, egress, or occupancy for a property. Local Law 160 applies to all NYC buildings as it makes no distinction for residential or commercial buildings.

The covered arrears include:

• Unpaid fines, civil penalties, or judgements entered by a court or OATH.
• Unpaid past-due fees or other charges assessed by the DOB.

Attestation requirement. Owners will have to answer the following two questions in the Owner’s Attestation on Plan/Work (PW1) applications in DOB NOW: Build, the department’s self-service online tool:

• Are $25,000 or more in covered arrears, that are not currently in the appeals process, owed to the city with respect to the property for which the permit is being sought?
• Do the owners of the property owe, in aggregate, $25,000 or more in covered arrears to the city?

Owners who answer “Yes” to one or both of the questions won’t be allowed to request a permit in DOB NOW: Build for a New Building or Alteration-CO filing unless they certify that one of the exceptions listed in Local Law 160 of 2017 applies.

Exceptions. Here are the exceptions to the law:

• The applicant submits a certification from the DOF that binding agreements requiring payment of all covered arrears owed by the owners are in force and that the owners are in compliance with this agreement.
• The permit is necessary to correct an outstanding code violation that the DOB deems necessary for public health and safety.
• The permit is requested for a portion of a property that’s occupied by a tenant who isn’t responsible for the covered arrears with respect to the property.
• The permit is requested for a dwelling unit within a property that’s owned by a condominium or held by a shareholder of a cooperative corporation under a proprietary lease and the owners of the unit don’t owe a collective $25,000 or more in covered arrears to the city.
• The permit is requested for a property that was the subject of an in rem foreclosure judgment in favor of the city and was consequently transferred to a third party.
• The permit is requested for a property that’s the subject of a court order in a case brought by HPD.
• The permit is requested for a property that’s the subject of a loan provided by or through HPD or HDC for the purpose of rehabilitation.
• The permit is necessary for participation in a program that involves rehabilitation of the property as deemed by HPD and HDC.