City Council passes ECB amnesty bill: Window to take advantage begins July, 2016 by Matt Engel

Matthew Engel, Langsam Property Services Corp.

Often I have written pieces in the New York Real Estate Journal that have been critical of the NY City Council. The body often sticks its nose in places where it is not needed, providing knee jerk reactions that hurt the real estate industry in response to the actions of one or two bad apples. Often new legislation results in crushing expenses as a result of initiatives that an owner needs to comply with. So when a body passes legislation that is beneficial to the industry, I feel it necessary to give credit to where credit is due.

In an effort to increase the city’s coffers while cleaning up the vast list of judgments and liens on the city’s books, the City Council has passed an amnesty bill. The mayor recently signed the bill, Intro 806B into law, specifically a limited amnesty program to resolve outstanding judgments from the Environmental Control Board (ECB).

The program is expected to go into effect on July 1, 2016 and will last a period of 90 days. During that time period, an owner who is subject to a default penalty may pay the underlying ECB base penalty without paying the default penalty or any accrued interest. This will satisfy the city and will resolve the outstanding financial liability.

If an owner has a penalty as a result of a judgment entered after an adjudication and a finding of violation, the owner may pay 75% of the imposed penalties without payment of accrued interest. This will also resolve the owner’s financial liability.

It should be noted that the owner a judgment resulting from a default decision and order may not be resolved under the temporary program to resolve outstanding judgments unless the base penalty of the violation that is the subject of the default decision and order can be determined from the notice of the violation, default decision and order, and environmental control board penalty schedule alone.

There are other limitations as well: A judgment may not be resolved under the temporary program to resolve outstanding judgments if the judgment had been the subject of a settlement agreement with the department of finance or the department of law that was executed after the expiration of the temporary default resolution program that was established in 2009.

If the judgment was the result of a Notice of Violation that requires an order of correction, there are also limitations on the program. In this case, an owner must enter into a written agreement providing that the correction will occur within six months. The owner must also pay a 25% deposit of the amount due and meet the satisfaction of the city that the work has been done and then pay the balance of the amount due.

In addition, an owner may only take advantage of the program if it satisfies all outstanding judgments against the respondent. All payments under this program must be made within the temporary 90 day window. The owner must also not be subject to a criminal investigation to participate.

Although it may take some attention to participate in this short program, taking advantage has the potential to save an owner thousands of dollars in fines that would otherwise remain on one’s property and continue to accrue interest.

Matt Engel is president at Langsam Property Services Corp., Bronx, N.Y.