REPORTER. Fighting for Fairness in New York s Housing Market. Backflow Prevention Devices Now MCI Eligible

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1 Vol. 31 Issue 8 September 2012 Fighting for Fairness in New York s Housing Market Backflow Prevention Devices Now MCI Eligible Recently, the City has been stepping up its enforcment of Department of Environmental Protection (DEP) regulations requiring the installation of backflow prevention devices. DEP has been issuing orders that require any residential building with a burner rated at 350,000 BTU or greater to install a backflow prevention device. This includes most buildings with six units or more. After several months of discussion between RSA and the Division of Housing and Community Renewal (DHCR), DHCR has agreed to reverse its long-standing position and approve major capital improvement (MCI) rent increases for the installation of mandated backflow prevention devices. A copy of the new Directive can be found at Backflow devices are intended to prevent contaminated water or chemicals from flowing back into the drinking water supply if there is a sudden or unexpected change in Backflow Prevention Device. water pressure. If a property requires a backflow prevention device, they must be installed on all water service lines to the property. There are various types of backflow prevention (Continued on page 5 ) REGISTER NOW: SEMINAR Wednesday, September 12, :00AM 12:30PM 14 Vesey Street, 2 nd Floor Auditorium, New York, NY See Page 3 for more information CONTENTS: 1 Backflow Prevention Devices Now MCI Eligible 2 President s Message INSIDE RSA 3 Register for RSA Seminar: The City s New Energy Laws Update RSA Affordable Housing Blog Now Live! 7 Remembering RSA Board Member Roberta Bernstein 11 RSA July Membership Meeting Recap CITY & STATE ROUNDUP 6 Higher HPD Penalties for Heat and Hot Water Violations 8 NYSERDA Expands MultiFamily Building Incentive Program 9 New York City s Energy Auditing Requirement 10 First NYC Energy Benchmarking Report Released 12 RPIE Filing Deadline: Sept. 4, Cautionary Tale: Comply With Safety Requirements or Risk Substantial Liability IN THE COURTS 14 Pitfalls for Property Owners: How to Be Ready for Court 15 Ask The Administrator 16 Calendar of Events

2 PRESIDENT S MESSAGE By Joseph Strasburg Roberta Bernstein Remembered First and foremost, it is with deep sadness that I inform RSA members of the passing of RSA Board Member Roberta Bernstein. Roberta was President of the Small Property Owners of New York (SPONY) as well as an active RSA Board Member for over 25 years. We will miss the passion, enthusiasm and dedication she had for property owners. Elections Are Here Election season is upon us with local primary elections taking place on September 13 th and the general election on November 6 th. As I have previously stated, this is a very important election year for property owners as there is a possibility that Democrats could once again regain control in the Senate; this change in leadership would be nothing short of catastrophic for property owners. Please get out to vote and support politicians that will support our industry as well as the rights of property owners. As a result of the small majority the New York State Senate Republicans currently hold, Senate races happening outside of the five boroughs will have a profound impact on our industry. As an industry, we need to support those who are going to help expand the majority in the Senate and support our issues. If you have any questions about which candidates are friends of property owners, please do not hesitate to contact me at the RSA office. RSA Helping You With the fall fast approaching, this is the perfect opportunity to do some overall housekeeping when it comes to your property. RSA encourages our members to take advantage of all the tools available through our organization to help you do so. Property management tools are a valuable service available to RSA members. Our Court & Credit Tenant Screening Program allows you to easily and quickly screen potential tenants. The Screening Program anticipated the recent limitations on public disclosure of Housing Court proceedings and still provides the best possible match of applicants and processing. The service includes reports from New York, as well as out-of-state Housing Court Reports, a choice of Credit Bureau Reports, Employment and Income Verification, Current and/or Prior Landlord Verification, Social Search, Criminal Report, Fraud Search and an Illegal Tenant Search. Many members choose to take advantage of our Forms and Riders Service which provides vacancy and renewal leases and packages containing leases, stabilization riders and lead pamphlets. These forms are available at discounted rates through this program. In addition, RSA s Safety Notice Service provides a complete protection package to ensure owners are in full compliance with notice requirements for window guards, lead paint and fire safety notices. Tennet, a web-based property management (Continued on next page ) Rent Stabilization Association 123 William Street New York, NY (212) Chairman of the Board Arnold Goldstein Vice Chairmen N. Richard Kalikow, Leonard Litwin Chairman of the Executive Committee Arnold Goldstein President Joseph Strasburg Executive Vice President Jack Freund Vice Presidents Mark Engel, John J. Gilbert III, Gary Jacob, Jeffrey Manocherian, Roger Melzer, Howard Milstein, Jimmy Silber Treasurer Lennard Katz Secretary Michael Laub Directors Frank Anelante, Christopher Athineos, Roberta Bernstein, Dennis Brady, Donald Capoccia, Helen Daniels, Douglas Durst, Matthew Engel, Gary Flamenbaum, Denis Gittens, Laurence Gluck, George Hatzmann, Andrew Hoffman, Michael Kerr, Jack Levy, Robert Nelson, Adam Parkoff, Oscar Perez, Jordan Platt, Neil Rubler, Matthew Schmelzer, Michael Schmelzer, William Schur, Aaron Sirulnick, Joseph Zitolo, Laurie Zucker Honorary Directors Martin Goodstein, Richard Lefrak, Kenneth Patton, Sanford Sirulnick, Donald Trump, Charles J. Urstadt Disclaimer: Every effort is made to provide accurate and up-to-date information in RSA publications and bulletins. However, information or advice provided in these publications should not be taken as legal opinions. Always consult your attorney when in doubt. The RSA Reporter is intended for the exclusive use of RSA members. This publication may not be reproduced, in whole or in part, without the written permission of the RSA. The RSA welcomes comments, suggestions and questions from its members. Editor: Jack Freund Assistant Editor: Courtney Ronner Production: Christine Chu. Copyright 2012, Rent Stabilization Association of N.Y.C., Inc., 123 William Street, NY, NY The RSA Reporter (ISSN # ) is published monthly (except August) by the Rent Stabilization Association of N.Y.C., Inc., 123 William Street, New York, NY Periodicals postage paid at New York, NY. POSTMASTER: Send address changes to The RSA Reporter, 123 William Street, 14th Floor, New York, NY September 2012

3 INSIDE RSA President s Message (Continued from previous page) tool, is a low-cost, state-of-the art program that seamlessly generates everything necessary to handle rent rolls and accounts receivable including rent bills, lease renewals and record keeping. Lastly, the RSA Legal Plan is unlike any other program available in our industry. Through the Legal Plan, RSA offers its members a program to contain housing-related litigation costs while providing highly experienced representation in Housing Court (See Pitfalls for Property Owners: How to Be Ready for Court on Page 14 for additional information about how the RSA Legal Plan can help you.). As always, experienced RSA counselors are available to all members for individual assistance, by phone or in person, on all matters related to rent regulation or City and State agency problems; our knowledgeable staff of counselors is one of the greatest assets for our members. Although the deadline for 2012 rent registration passed on July 31 st, RSA counselors can help you tie up loose ends and get your rents registered through our Rent Registration Service. Failure to register rents can result in rent rollback and severe financial penalties, so please ensure that your rents are registered. Register for RSA Seminar: The City s New Energy Laws Update 2012 On September 12, 2012, RSA, in conjunction with the New York County Lawyers Association (NYCLA), will host a seminar to help owners comply with the City s new energy laws and provide an update of the resources available to assist owners in converting to cleaner heating fuel, including financing options. The seminar will also provide an overview of the Local Law 87 energy efficiency reporting requirements commencing in 2013, as well as an update on the Local Law 84 benchmarking rules. Panelists presenting at the seminar will include representatives from the Mayor s Office of Long-Term Planning & Sustainability, Department of Buildings, Department of Environmental Protection, the NYC Energy Efficiency Corporation, NYSERDA, Con Edison, National Grid, M-Core Credit Corporation, Hess and Brightpower, Inc. There will also be exhibitor tables from each of the presenters to answer questions during the break. Advance registration is recommended. Members can obtain additional information and register by going to or by calling NYCLA at , ext. 215 or 250. RSA Affordable Housing Blog Now Live! Visit the RSA Affordable Housing blog at: The RSA has created an Affordable Housing blog to explore the varying definitions of affordable housing ; the various ways in which affordable housing is provided by government and the private sector; and to examine the relative costs and benefits of alternative means of providing affordable housing. We really envision this blog as a place to get involved in the conversation and express opinions about affordable housing as it is now, how it might be best provided in the future and the current threats to existing affordable housing, explains Jack Freund, Executive Vice President at RSA. Go to the RSA Affordable Housing blog at to become part of the conversation! September

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5 CITY & STATE ROUNDUP Backflow Prevention Devices Now MCI Eligible (Continued from cover) devices and the particular device required for your building can be identified by a Professional Engineer (PE), Registered Architect (RA) or Licensed Master Plumber (LMP). Documentation of MCI costs Any claimed MCI cost must be supported by adequate documentation which should include at least one (best to include two) of the following: Cancelled check(s) contemporaneous with the completion of the work. Invoice receipt marked paid in full contemporaneous with the completion of the work. Signed contract agreement, contractor s affidavit indicating that the installation was completed and paid in full. The following items will be included in the cost of the installation of this mandated device: Cost of architect/engineer for prep plans. Installation of device. Cost of certified testing by certified tester. Pending and Previously Denied MCI Requests Any recently denied MCI applications for backflow devices will be remanded for processing or reopened if a request for reconsideration is timely filed. If an owner has a pending Petition for Administrative Review (PAR) on a denial of a backflow device, the case will be remanded for processing by the Rent Administrator. If the owner failed to file a PAR against a denial order, then the owner has 95 days from the date of the order being denied to request reconsideration. Even if a denial order was issued, an owner may re-apply for MCI increases at any time within two years of the work being completed. Owners should make themselves familiar with Policy Statement 91-5 which reviews PAR limitations and restrictions; this document can be viewed by going to RSA has raised concerns with DEP about near-universal requirements for backflow devices in residential buildings and the costs involved. Updates on this issue will be in future issues of the RSA Reporter. Additional information about backflow prevention devices can be found on the RSA website under the Downloads tab under the sub-heading Backflow Prevention Devices. Limited Quantities and Discounted Kidde CO Alarms Available Through Kidde-RSA Purchasing Program! Limited quantities of older model Kidde CO alarms are available to RSA members at a discounted price. These models provide easy replacement of existing units with no painting or bracket replacement needed! Limited quantity models are as follows: Kidde 9CO5 (KN-COB-B) Battery-Operated CO Alarm 6-Pack Case Price: $91.50 per 6-pack case; per unit cost = $15.25 each Kidde KN-COPP-B ( ) Front Load Battery-Operated CO Alarm with Digital Display Price: $16.25 each CO detectors can be purchased through the Kidde-RSA Purchasing Program at a discounted rate to RSA members at September

6 CITY & STATE ROUNDUP Higher HPD Penalties for Heat and Hot Water Violations As Heating Season commences on October 1, 2012, the New York City Department of Housing Preservation and Development (HPD) will enforce new provisions regarding penalties for heat and hot water violations. Higher Penalties for Subsequent Violations Changes in the Housing Maintenance Code provide that HPD may impose civil penalties ranging from $500 to $1,000 per day for a heat or hot water violation if the building received a heat or hot water violation during the past calendar year or heating season. New Inspection Fee In addition, if HPD makes a third inspection which results in a heat violation within the same heat season or a third or any subsequent inspection which results in a hot water violation within the same calendar year, HPD will charge a fee of $200 for the inspection. In addition to this fee, the owner is subject to any civil penalties that may be imposed by the Housing Court. The HPD inspection fees will be billed to the owner through the Department of Finance (DOF); the owner will see the charge on the Statement of Account on the quarterly bill following the inspection. All fees that remain unpaid shall constitute a debt recoverable from the owner and a lien upon the premises. Should the lien exceed $1,000 and remain unpaid for more than 1 year, owners are subject to the New York City Tax Lien Sale. Through this process, the lien may be sold to a third party, who may foreclose on the property if the lien is not paid Payment Option for First Violation The code has been changed to provide that owners who receive their first heat or hot water violation may have the option of satisfying the penalty by submitting a $250 payment with a timely Notice of Correction. The Notice of Violation that the owner receives in the mail will clearly indicate whether the violation is eligible for this payment option. An owner who chooses to submit a Notice of Correction and payment in satisfaction may do so by submitting a paper Notice of Correction or by using ecertification. Additional information about ecertification is available on the HPD website at The Notice of Correction must indicate that the violation has been corrected within 24 hours of the Notice of Violation (which is the same as the date of the HPD inspection). The payment of $250 must be submitted with the Notice of Correction to the Department within 10 days of the violation. Payment for the violation can be made via credit card online, or by certified check or money order if submitting the Notice of Correction by mail. Payment for a first violation is optional. If the Notice of Correction and $250 fee are not filed within 10 days, HPD may commence a proceeding for an order to correct and to recover civil penalties in Housing Court. If HPD commences a proceeding, the agency can seek the penalties of $250- $500 dollars per day, from and including the date that the Notice of Violation is posted at the building, until the date that the violation is corrected. If the owner fails to pay the Court ordered civil penalties, HPD will enter a judgment against the owner and the property and seek to enforce that judgment. The status of a violation can be check on the HPD website at More information about heat and hot water enforcement and violations can be found on the HPD website at Heat Season Reminder As a reminder Heating Season runs between October 1 st and May 31 st. Building owners are required to provide tenants with heat under the following conditions: Between the hours of 6:00 AM and 10:00 PM, if the outside temperature falls below 55 degrees, the inside temperature is required to be at least 68 degrees Fahrenheit. Between the hours of 10:00 PM and 6:00 AM, if the temperature outside falls below 40 degrees, the inside temperature is required to be at least 55 degrees Fahrenheit. 6 September 2012

7 INSIDE RSA Remembering RSA Board Member Roberta Bernstein It is with a heavy heart that we inform RSA members of the passing of RSA Board Member Roberta Bernstein. Roberta was an active RSA Board Member for over 25 years, as well as the President of the Small Property Owners of New York (SPONY). Close friend and fellow RSA Board Member Jimmy Silber reflects on memories of Roberta during a eulogy he gave at her funeral: I first met Roberta in 1984 at the annual event in New York called the Rent Guidelines Board. Roberta and I found ourselves huddled in a corner of the auditorium trying to escape being hit in the head by flying chairs and other objects that irate tenants and owners were throwing at each other. Roberta introduced herself to me and said Why does every elected official say such terrible things about landlords? This isn t the way I run my buildings and I get along with all my tenants. She said, Maybe we can change this. And that was how it all started. Along with a dozen other people like Frank and Richard and Kate and Krystina, Roberta energized us to form the Small Property Owners of New York, referred to as SPONY, of which Roberta became the founding President. Now, 28 years later, SPONY has still endured, solely because of the determination and tireless work of Roberta Bernstein. Many times Roberta would call me or Chris to help her with some small owner who was in trouble. I would say to her, Roberta how do you have the time or the patience to help each and every owner who has a problem, many of whose problems were way beyond our ability to even solve? Roberta answered me, Jimmy these people need help. They have nowhere else to turn. And even if we can t solve their problems, they feel better if they know someone is just holding their hand. That was Roberta. She had an inordinate amount of energy. No matter how busy her own life was, she always found the time to attend a political or governmental hearing, or got on the phone to induce one of us to go. All bases got covered with Roberta in charge. No matter what complaint or argument anyone ever had with Roberta, her overriding single attribute was that she was always there, for the organization and for any individual property owner who needed help. She was selfless in the amount of time she would donate to our cause, and she persuaded all of us to stay active and participate through her resolute Roberta Bernstein and passionate leadership. Thank you for your dedication to property owners, Roberta. You will be missed. Additional contact information from members The RSA has upgraded its computer system and is now accepting additional contact information for RSA members. Additional names, phone numbers and addresses can now be linked to your RSA Agent number. You can indicate what type of information should be sent to each contact (for example, billing, rent registration, safety notices or all). To update this information fill out the form below: RSA Agent Number: Company: Name: Contact Type: Rent Registration Safety Notices Membership Dues All Information Alerts Chief Executive Officer Return To: Rent Stabilization Association -or- FAX To: William Street; 14 th Floor or via the RSA website New York, NY September

8 CITY & STATE ROUNDUP NYSERDA Expands Multifamily Building Incentive Program The New York State Energy Research and Development Authority (NYSERDA) has redesigned its Multifamily Performance Program (MPP) and is offering greater incentives for existing multifamily housing (buildings with 5 or more units) where owners make improvements to their buildings which result in at least a 15% energy savings. While NYSERDA has secured funding for buildings that are currently firm gas customers, the funding for buildings that currently burn oil is limited. RSA is hopeful that additional funding will become available in the near future for buildings converting from heating oil to gas. NYSERDA has launched a new website that makes it easier for owners to obtain information about the available incentives. The MPP now includes a fast track system for applying for the incentives. Information from NYSERDA about making multi-family buildings more energy efficient can be found on their website at bit.ly/qmtexl. In order to obtain NYSERDA incentives, MPP connects owners with partners who work with owners to obtain the incentives. In order to be eligible for MPP incentives in the City: Buildings must contain five or more units with at least four floors. At least 50 percent of the building s gross heated footage must be residential space; the remaining space can be nonresidential-related commercial space. The building must receive electricity through Con Ed or National Grid and must not receive any incentives from the utility. To learn more about NYSERDA s programs, available incentives and financing, members can register for RSA s upcoming seminar on September 12, The seminar will update owners on the latest requirements and developments in the City s energy laws including converting to cleaner oil and gas, complying with Local Law 84 (energy efficiency reporting) and an update on the City s benchmarking requirements. Advance registration for the seminar is recommended. The seminar will be co-hosted by NYCLA and CLE credits are available for attorneys who attend. Members can register by going to or by calling NYCLA at , ext. 215 or September 2012

9 CITY & STATE ROUNDUP New York City s Energy Auditing Requirement Many owners in NYC are already familiar with Local Law 84 of 2009, the City s energy benchmarking requirement. Starting in 2013, owners will have to begin complying with Local Law 87 (LL87), which requires owners to perform energy audits and retro-commissioning every 10 years. The same buildings affected by Local Law 84 are subject to LL87. (See RSA s website for a list of the requirements.) Auditing and Retro-Commissioning An energy audit sets out to identify cost-effective system improvements and operational changes that will save energy and money, at a property. Qualified auditors visit the building to assess its energy-related systems and then prepare a report analyzing their findings, and recommending energy efficiency measures for the property. Information on financial incentives available to help pay for the measures is generally also included. Retro-commissioning ( RCx ) is a process of optimizing the performance of a building s existing systems by correcting deficiencies. Where retro-fitting might require replacing a boiler or HVAC unit, retro-commissioning involves making sure that the existing equipment is performing to specification; this may require tuning controls, cleaning filters, or making appropriate repairs. The Reporting Schedule Under LL87, covered buildings will be required to go through an energy audit and retro-commissioning every 10 years, according to the last digit of their tax block number. Buildings with tax block numbers ending in 4 will be required to report in 2014, 2024, and so on; buildings with tax block numbers ending in 7 must report in 2017, 2027, etc. The first group of buildings those with tax block numbers ending in 3 is due to report in Early Compliance Option Only Available In 2013 The City has also created an early reporting option, under which any building may submit a report in 2013, the only early reporting year. Buildings opting for early compliance will not be due to report again until their second originallyassigned reporting year (i.e., a 2019 building that reports in 2013 doesn t report again until 2029). (A list of the early compliance requirements is available on RSA s website at How to Comply To comply with the law building owners must: Have an energy audit conducted by an approved auditor; Implement the RCx measures identified in the audit, and have an approved retro-commissioning agent verify implementation and provide the owner with an appropriately certified report; Submit both documents to the Department of Buildings between January 1 st and December 31 st of the reporting year. By Phil Vos of Bright Power, Inc. Audits and retro-commissioning may be done in advance, as long as each takes place no more than 4 years before the reports are submitted. Exceptions The law does provide for some exceptions for buildings that: Have received the EPA Energy Star. Achieved LEED certification. Are less than 10 years old when their report comes due. Are defined as simple buildings essentially those without central air-conditioning that have certain energy efficiency measures in place when their report comes due. Please note in most cases exceptions do not apply to early reporting. Details on the exceptions can be found in the text of the law, which is available at Work in Progress A finalized Rule for LL87 is still pending; and is expected to be available in August. The City has created a Local Law 87 Checklist & User s Guide which is available at The author of this article, Phil Vos, is a panelist at the RSA Seminar: The City s New Energy Laws Update September

10 CITY & STATE ROUNDUP First NYC Energy Benchmarking Report Released In August, Mayor Michael Bloomberg released the first benchmarking report analyzing a year of energy and water use for New York City s largest buildings. The report analyzed over 1.8 billion square feet of properties required to benchmark energy and water use as part of the Greener, Greater Buildings Plan (GGBP). The report is required under Local Law 84 of 2009 (LL84), which mandates that all privately-owned properties, with individual buildings over 50,000 square feet or multiple buildings with a combined square footage over 100,000 square feet, annually measure and report their energy and water use. It is clear from the report s findings that the City will undoubtedly target multifamily properties in future benchmarking efforts. Multifamily properties constituted 80% of the number of properties benchmarked. The multifamily sector accounts for half the energy use, followed by the offices at one-third, and all remaining uses at one-sixth. Multifamily properties were the predominant property type covered by LL84 and in the benchmarking data by number, square footage, energy use and green house gas emissions; followed by commercial office properties. Smaller multifamily buildings were identified as more energy intensive than larger ones. In addition to the data presented, the report indicates that the City will implement several actions to improve the quality of energy benchmarking in New York City and the ease of compliance for building owners. The City will: Work with private utilities, state regulators, and technology companies to enable building owners to automatically upload whole building energy data. Work with the City Council to clarify the benchmarking law and remove data-gathering requirements which have become unnecessary. Seek funding to maintain the Benchmarking Help Center for an additional three years. Work with private energy providers and State regulators to identify incentives to help offset the cost of providing building level sub-meters for properties with multiple buildings. The benchmarking report can be viewed in its entirety at Save the Date: Next RSA Seminar on October 23 rd The next RSA seminar Roberts v. Tishman Speyer: Three Years Later will take place on October 23 rd at the New York County Lawyers Association, 14 Vesey Street, Manhattan. More information to follow in the next RSA Reporter and via from RSA. 10 September 2012

11 INSIDE RSA RSA July Membership Meeting Recap On July 18 th, RSA held a General Membership Meeting at the RSA office in Manhattan to update members on current events pertinent to RSA members as well as give members the opportunity to ask RSA senior staff and counselors questions. The meeting was well attended by RSA members from all boroughs. Jack Freund, RSA s Executive Vice President, reviewed the outcome of the Rent Guidelines Board and expressed RSA s disappointment at the low rate increase. However, in light of the minimum dollar increase that was passed this year, he was optimistic this could set a new standard for future, higher minimum dollar increases for rents. In addition, Freund reviewed issues of importance to RSA members such as major capital improvement (MCI) increases for installation of mandated backflow prevention devices, an overview of the new DEP Clean Air Tracking System (CATS) as well as an update on the status of a J-51 extension. RSA s General Counsel, Mitch Posilkin gave an update on Section 8 processing by the NYC Housing Authority. He and Deputy Counsel Robin Bernstein discussed the seminar that RSA will host on September 12th dealing with new energy laws requirements and Local Law 87 energy efficiency reporting; panelists from various State agencies and companies will be present to answer member questions and review current resources available to help owners convert to cleaner heating fuel. More information about the seminar can be found on Page 3. The next membership meeting will take place on Wednesday, October 17, RSA members MUST register for this meeting as space is limited. Register by calling or via at mduran@rsanyc.org. It s Not Too Late to Complete Your 2012 Rent Registration! New York State law requires stabilized rents to be registered with the Division of Housing and Community Renewal (DHCR) each year. Your April 1 rents should have been registered by July 31, Failure to register can result in rent rollbacks and severe financial penalties. However, you can protect yourself with a late registration, prior to any rent overcharge filings. Register your apartments through RSA s Rent Registration Service. RSA s Registration Service provides you with the security of knowing that your annual rent registration information has been electronically transferred and directly entered into DHCR s database. To enroll your building(s) for 2012, please call the RSA Rent Registration Hotline at or REGISTER ONLINE at September

12 CITY & STATE ROUNDUP RPIE Filing Deadline: Sept. 4, 2012 Requirements Change Again Real Property Income and Expense reports (RPIE) must be filed with the NYC Department of Finance (DOF) by the September 4, 2012 deadline for the 2011 reporting period or most current fiscal year. RPIE forms must be filed electronically on DOF s website at for all properties assessed at more than $40,000. Properties are exempt from filing if they are assessed at less than $40,000, are exclusively residential with 10 units or less, or contain 6 or fewer residential units and no more than 1 commercial unit. However, exempt properties must complete and file the Exclusion section of the RPIE form. Exempt properties may voluntarily file an abbreviated RPIE-B form. All owners are encouraged to file RPIEs, whether or not they are exempt, for a number of reasons. First, properties required to file RPIEs are subject to substantial fines if the forms are not filed. Further, properties which do not file the required forms are precluded from filing applications for a reduction of real estate taxes with the NYC Tax Commission. Properties which are exempt from the filing requirement may also benefit from filing the RPIE-B form because DOF may otherwise assess the property using comparable properties which may differ significantly from your property. DOF has once again changed (and, in some cases, simplified) the RPIE filing requirements. For instance, in this filing cycle, DOF has eliminated the requirement to submit rent roll information. In addition, consolidated filing may be submitted for two or more properties which are operated as a single economic unit, are located in the same borough, share the same ownership and are located on contiguous lots. On the other hand, owners are required to file partial year RPIE statements if the property was purchased during the 2011 reporting year and a 12-month statement is not available, or if the property was unoccupied and under construction or renovation during the 2011 reporting period. 12 September 2012

13 CITY & STATE ROUNDUP Cautionary Tale: Comply with Safety Requirements or Risk Substantial Liability The following account of a fire that took place in a New York City apartment should serve as a cautionary tale to owners about the importance of safety requirements in their apartment buildings. Without proper safety provisions in place, not only could your tenants suffer, but you could be held legally liable for the repercussions. This story was published by Robson Forensic, Inc., a forensic engineering company, headquartered in Lancaster, Pennsylvania. A family of five was devastated when a fire broke out in their apartment in the middle of the night. Two siblings died, the three survivors suffered smoke inhalation. Robson Forensic fire investigator, John L. Tinghitella, C.F.I., was retained to determine the origin and cause of the fire and assess whether or not any dangerous conditions existed that contributed to the death/injury of those involved. Through review of fire department reports and associated case documents, our fire investigator determined that the fire was caused by an electrical malfunction of the refrigerator in the victims apartment. The fire was consistent with a slow burning, high heat fire, fueled by burning plastic materials. Citing multiple building codes and safety standards, our fire investigator opined that the absence of smoke detectors deprived the occupants of an early warning of the growing fire and smoke condition. Without early warning, the occupants were not aware of the fire until it was burning for a substantial time period and had time to grow and fill the apartment with smoke and toxic gases. The buildup of toxic gases from the large amount of smoke was a direct cause of the injuries sustained by the occupants. The apartment was equipped with unapproved window gates in the bathroom and the shared bedroom of the deceased siblings. The illegal window gates delayed egress to the fire escape and directly caused the siblings death. Mr. Tinghitella effectively demonstrated that the building landlord violated applicable codes and safety standards by allowing unsafe conditions to exist which caused the injuries sustained by the occupants. September

14 IN THE COURTS Pitfalls for Property Owners: How to Be Ready for Court By Ronald Hariri, Esq. After a quarter century of teaching RSA workshops with the Administrator of the RSA Legal Plan, Howard Stern, Esq., it never fails to amaze me how many owners are ill-prepared and rudely awakened when their case is thrown out of court by a Housing Court judge because the owner failed to comply with some technical formality. Often the disaster comes months into the case and the owner needs to start over. Both holdover and nonpayment cases are formal legal proceedings and the rules of evidence apply. This means that service of notices and pleadings should, except in extraordinary circumstances, be done by licensed professional process servers. Any minor defect, such as the wrong apartment number, a delay in mailing, a misspelling in name or address, or not including a party, can be fatal to the case. Often judges or adversaries, aware of an error, can use such a defect to force a settlement that is less than favorable. To be best prepared to either settle your case and to be ready for trial, you will also need original rent records maintained in a proper business format (many computer programs now generate what is needed, but an old fashioned ledger book is fine, too) and certain certified documents: the deed for the property (or originally recorded copy), the current multiple dwelling registration with the City s Department of Housing Preservation and Development (reminder the registered person must have a City address) and DHCR rent registrations for at least the past 4 years (we recommend having as many as possible). Last, witnesses need to be ready to authenticate these documents or pleaded facts and incidents and be prepared for trial. These documents are necessary to prove the basic elements of the case; not having the right document in the right form may doom your case. Of course, trial preparation should be done with qualified trial counsel. There are myriad issues that can come up in nonpayment cases, such as repairs, overcharges, calculations etc. Even where a case is settled, the language in the stipulation can be critical and this is where a good lawyer really helps. Experienced attorneys (such as those in the RSA Legal Plan) are best suited to make sure you are properly represented and prepared for either trial or settlement. Part of the owner s job is to make sure your lawyer is aware of potential issues which may arise, so no one is caught by surprise. Holdover cases, such as owner occupancy, chronic nuisance, illegal sublets, and non-primary residence cases, are far more complex. This is where proper preparation, discovery and motion practice come into play, areas that are outside the general knowledge and expertise of a lay person. With the ever-changing way in which the courts look to protect tenants, the stakes are high for both the owner and tenant. There is simply no substitute for extensive preparation with experienced counsel, with whom you work closely. Information on nonpayment is available at the NYC Housing Court website at Ronald Hariri, Esq., is a participating attorney in the RSA Legal Plan. SOCIAL MEDIA RSA is expanding its web presence with active Facebook, Twitter and YouTube pages. Stay in touch with us on social media for the latest news. Like RSA on Facebook at: Follow RSA on Twitter at: Watch RSA videos on YouTube at: 14 September 2012

15 IN THE COURTS Ask The Administrator Question: What is an owner s concern when tenants file for divorce? Answer: While most issues regarding housing and landlord/tenant matters are dealt with in the Housing Court, recently the Appellate Division, Second Department (Queens, Kings and Richmond County) ruled that the State Supreme Court may decide who retains possession of an apartment in the context of a divorce. All of this is important when considering how divorce affects who will occupy a rental apartment and, ultimately, be considered the legal tenant of record. In a divorce case, the court decides issues such as custody, maintenance, child support, visitation and the distribution of the party s assets. When dividing assets the Court must consider what is either marital or separate property when determining the distribution of assets. According to the Appellate Division, Second Department, in the recent case of Cudar v. Cudar, the right to occupy a rental apartment does not qualify as an asset that can be distributed. However, the Court also ruled that the apartment does qualify as property that can be taken away from one spouse and given to the other by the State Supreme Court, even if the spouse has not lived in the apartment for some years(in New York, this may well include a domestic partner). In Cudar, the husband commenced occupancy of the rent-controlled apartment in 1960 and his wife moved into the apartment in The couple was divorced in 2006, but the issue of possession was not addressed at the time because the Court indicated that this was an issue for Housing Court. The ex-husband then tried to evict his ex-wife by commencing a holdover proceeding in Housing Court, but his claim was denied on the ground that there was no landlord/tenant relationship between the ex-spouses. The ex-husband then moved in State Supreme Court to gain possession of the apartment, claiming it was his separate property, and not marital property, since he moved into the rent controlled apartment prior to his marriage. His argument failed on the ground that while a rent controlled apartment is a valuable commodity, it may not be distributed as marital or separate property since the signing of a lease for an apartment and/or tenancy rights in an apartment do not qualify as an acquisition of property, either before or after the marriage, unless there is an expectation that the apartment will be converted into a condominium or cooperative. The ex-husband appealed and the appellate court agreed with the lower court, holding that obtaining a leasehold interest to use and occupy an apartment, regardless of when the interest is created, does not constitute an acquisition of property pursuant to the Domestic Relations Law. Consequently, the apartment leasehold cannot be classified as the [ex-husband s] separate property. However, the appellate court also went on to hold that the Supreme Court was authorized to exercise its discretion and aware possession of the apartment to either the plaintiff or the defendant. According to the Court, the lower court has the authority to award possession of an apartment to one spouse, thereby evicting the other spouse in a matrimonial action, pursuant to Domestic Relations Law, Section 234, which allows the Court to confer possession of virtually any property to a party in a divorce, even if legal title to the property cannot be similarly transferred. This has interesting implications for owners who are in the middle of non-primary residency holdovers and/or illegal sublet proceedings, or are considering initiating such a proceeding, since the court, in a matrimonial action, could grant tenancy rights to an individual who has not lived in the apartment for multiple years, or may have no rights to the apartment based on landlord/tenant laws. Therefore, before you initiate a non-primary residence holdover, or, if you find yourself, as an owner, caught in the middle of a proceeding seeking possession of an apartment, you should contact the RSA Legal Services Plan, or ask your current attorney, about the implications that a known matrimonial action may have on your case. Carlos Perez-Hall, Esq., a Partner at Borah, Goldstein, Altschuler, Nahins & Goidel, P.C. supplied the above answer. The firm is a participant in the RSA Legal Plan. September

16 Periodical Postage Paid NY NY SEPTEMBER OCTOBER CALENDAR September 3 Labor Day STATE, CITY AND RSA OFFICES CLOSED. September 4 Income and Expense Statement Deadline Income and Expense Statements (form RPIE-01) are due to the Dept. of Finance, Property Division, from owners of income-producing realty for real property assessment purposes. September 12 RSA Seminar: The City s New Energy Laws Update 2012 (See page 3 for details) September 13 Primary Election Day September 14 J-51 Deadline To file with HPD for the quarter ending today. September 17 Personal Estimated Income Tax Due Third payment for 2010 is due for Federal, State and City income taxes. September 20 Commercial Rent Tax Return and Payment Due Commercial rent or occupancy tax return to be filed and tax paid for the first quarter ending Aug. 31. October 1 New Rent Guidelines Order No. 44 goes into effect. Heating Season Begins October 8 Columbus Day Service Employees Union and Sanitation Workers holiday. No garbage pick-up, no street cleaning. City, State and RSA OFFICES WILL BE CLOSED. October 15 Pay NYC Property Tax For properties assessed at $80,000 or less, your 2 nd quarter payment for fiscal year is due to NYC Dept. of Finance. October 17 RSA Membership Meeting 3:00PM-5:00PM RSA Office, 123 William Street, 14 th Floor, Manhattan. Call to register. October 23 RSA Seminar: Roberts v. Tishman Speyer: Three Years Later 9:00AM-12:00PM NYCLA office. More information to follow in the next RSA Reporter and via from RSA.