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BLOG / 07.12.19 /Kenneth R. Jacobs

Legislative Update: “Prevailing Wages” Required to Receive Co-op/Condo Tax Abatements; Mandatory Garage Inspections

Most of our attention has been focused on the effects of the newly passed “Housing Stability and Tenant Protection Act of 2019” (the “ TP Act ”) on rental apartment buildings. However, several other recently enacted state and local laws also affect cooperatives and condominiums in New York City and the surrounding counties.

1. “Prevailing Wage” Pay Required to Receive Co-op/Condo Tax Abatements.

Beginning July 1, 2020, cooperatives and condominiums receiving the benefit of the “co-op/condo tax abatement” in NYC will be required to “ qualify ” for the abatement. The requirements for “qualification” are either (i) the Property has an average assessed value of $60,000 or less per unit; or (ii) the Property must certify that it is paying all building service employees the “prevailing wage” (as determined by the NYC Comptroller). Currently the “prevailing wage” in NYC for handypersons, cleaners/porters and doorpersons, runs from $24.90 to $27.43 per hour, plus supplemental benefits valued at $12.81 per hour, varying depending on length of employment.

Check your own building’s assessed valuation to see if you may exceed the $60,000/unit threshold. Co-ops and Condos in Manhattan that are not “union” buildings are especially likely to run afoul of this new requirement. Be prepared!

2. Mandatory Inspections of Parking Garages.

All parking garages in New York State now must be inspected every three years by a professional engineer to detect deterioration of any structural element or building component in the garage, or evidence of any “unsafe condition.” A report (called a “condition assessment”) must be filed with the NY Department of State.

A “parking garage” excludes buildings with on-grade parking only, and single-unit or detached garages.

If the building was constructed before 1984, the first inspection is due by October 1, 2019 . If the building was constructed between 1985 and 2002, the first inspection is due by October 1, 2020. Thereafter, the first inspection is due October 1, 2021. The municipality will set the timetable and standards for inspections and reports thereafter, but no less than every three years.

New York City buildings are familiar with these types of inspections because of Local Law 11, which governs façade inspections. The standards for deciding whether repair or remediation is required are also similar, i.e., any recommended repairs must be performed before the next periodic inspection. Buildings outside of NYC will have to find out what standard their community applies by trial and error; in NYC, standards were progressively relaxed until a recent backlash.

Your next garage lease needs to impose more stringent notice and repair obligations on the tenant, or you could be exposed to significantly greater repair obligations as a result of deferred maintenance.