Will Open Permits or Violations Impact Your Next NYC Deal?

Understanding Compliance and How to Resolve Issues Quickly

A client called me recently with an urgent issue. She’d been ready to place her downtown office building for sale only to discover the deal would be delayed due to a variety of open permits and violations against the property. How quickly could I resolve them, she asked. In a quick scan of her property profile, I knew from experience that some items would take months to resolve and would prevent her from being able to close any time soon.

With more than half a million open permits across New York City’s five boroughs, I field calls like this often. Similar situations occur with property managers leasing new tenants, as well as tenants who are ending leases and moving out.

Many owners, property managers, and tenants are unaware that they have open permits or that their properties are in violation of the City’s constantly evolving building codes and local laws. That’s because within a single 50-story building, there could be many construction activities taking place at any given time. Tracking and properly closing out those activities is difficult. The process becomes increasingly complex for those who own or manage multiple high-rise buildings.

Fortunately, there’s an easy way to take control of compliance today – before you plan to sell, lease, or move, and when you have time to act.

Understanding Open Permits and Violations

Permits are required for all building modifications and construction. Once a project is completed, the work must be properly inspected before the permit can be closed out. However, many building owners, property managers, and tenants forget to follow up on their permits once project construction is completed, thus leaving an open permit.

Violations occur when unsafe or hazardous conditions or work exist on a property. These violations occur when projects have not followed the current building codes and local laws created through the years. This can be especially costly, time-consuming, and inconvenient when work needs to be removed and redone.

It’s out of sight, out of mind for a lot of people. Many buildings throughout the city have open permits or violations that owners don’t know exist.

– Ty Goode, Permitting Manager

Realizing the Impact of Non-Compliance

Compliance issues can impact a deal’s success, extend the timeline, and/or significantly increase costs. Here are a few specific examples of the impact of non-compliance by role:

Owners

Open permits and violations will impact building owners when potential buyers assess their property and building condition. Open permits/violations could extend a sale’s closing timeline by 3-6 months or turn the buyer away completely. This could also impact the property’s refinance process.

Property Managers

Non-compliance will impact property managers when potential tenants research their desired space. They’ll check that the construction has been properly inspected, conforms with building codes and local laws, and ensures the safety of their employees and customers. Open permits or violations could deter the tenant from signing on. 

Tenants

When lease agreements include reimbursement for tenant-led improvements, it is often contingent on the tenant closing out all permits and resolving violations before vacating the space. Tenants who leave open permits or violations as a result of improvements they’ve made to their space could face legal action from owners or property managers who are seeking to recoup costs associated with resolving the compliance issues.

By identifying what a property’s profile contains, owners can get ahead of some of the issues facing their building.

– Ty Goode, Permitting Manager

Identifying and Resolving Non-Compliance Issues

To take control of open compliance items, engage a permitting consultant to help assess your property’s compliance status now. Even if you’re not planning to sell, lease, or relocate in the near future, this approach allows you to be proactive.

Engaging a permitting consultant, like Bohler, to perform continuous monitoring of a building’s efficiency and a thorough risk assessment before a critical stage like leasing or selling occurs is recommended. Bohler’s team prepares customized and comprehensive compliance reports focused on pertinent data such as open permits, applications, violations, and other items related to the subject property.

Once all the information is compiled, the permitting specialist will strategize a solution for each open item, estimate the time and cost to resolve the issues, and collaborate with the building owner, property manager, or tenant to determine the best path forward for them.

Ready to assess your property for open permits or violations?