The crackdown on Landlords who are not registering their buildings with the city’s rent regulation has swiftly come down on owners of buildings in New York City. A new report by Crain’s New York Business indicates that the city along with the Attorney General’s office, Governor Cuomo and Mayor DeBlasio’s office warned owners of 178 buildings that they must register the 1,400 affected apartments with the city’s housing agency which will enforce rent limits each year. The failure to register their buildings will result in the 421-a tax designation that the owners have on their buildings to be removed and the owners being responsible for the reinstated taxes for the period that they received the abatement by the city.
421-a is a program gives developers a 10 year tax exemption for building a multi-unit residential project on vacant land. The developer of a project on vacant or mostly vacant land is exempt from paying the taxes it would usually have to pay for a 3 year period of construction. Thereafter the developer is given a 10-year-long exemption period, during which the exemption becomes more of an abatement. Every two years during that period, the tax break is reduced by 20%, until fully used.
It is further reported that since 2014, the Attorney General’s office under the Real Estate Tax Compliance Program have caught more than 460 landlords in noncompliance, revoking the tax break at 35 buildings and sending notices of revocation to 178 more. For more information on the report click here.
As a New York City property management company it is imperative to be in compliance and up to date with the city’s reporting and enrolling of apartment units. The failure to do so, as you can see for some landlords can result in potentially millions of dollars in losses that could have been prevented by having safeguards set up with respect to reporting. At Blue Harbour Property Management we set deadlines on reporting and enrolling apartments with the City. That way, we never have to worry about exorbitant that could be detrimental to the entire development and overall health of the building. This is part of building management expertise that a landlord should look for in deciding on a apartment management company in New York City.