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Condo-Co-op Helpline: Update on Implementation of Local Law 97

The deadline for Local Law 97 and its massive fines (functionally new property taxes) for residential cooperative and condominium buildings, is fast approaching. Local Law 97 of 2019 legislates that buildings of more than 25,000 square feet achieve major reductions in carbon emissions starting in 2025.

Many involved in management or ownership of New York City cooperative and condominium buildings or units believe that somehow Local Law 97 will be amended or modified. That does not seem at all certain.

There seems to be three thoughts on this issue: the courts will find the program pre-empted by State law, or unconstitutional; the City Council will amend the legislation or the State will take action to pre-empt the City. The litigation appears stalled, and nothing is happening legislatively. The time has come to deal with heavy fines that are a de facto layer of new taxes on residential cooperative and condominium buildings.

There are public programs for affordable housing buildings, rentals and even office buildings, but residential buildings for the middle class are absent from these considerations. If boards of these buildings and their managing agents do not take effective steps to address carbon emissions, they may find themselves being sued by outraged unit owners or shareholders.

Heating and air conditioning must be a high priority. The current standard for new residential high-rise buildings is R-22. Windows must be high-performing. New buildings are designed to have lower operating costs and carbon emissions. Many older buildings do not have adequate insulation by current standards or well-fitting windows. Sadly, many boards consider adding insulation or new windows as unit owner issues. Windows and insulation need to be considered common element issues and plans to address insulation and windows should be viewed as building is- sues. In older buildings, options include spray foam, bubble blankets and cladding. For some buildings, removing the builder grade window sills and stuffing mineral wool in the walls under the windows, and replacing the building grade sills with new builder grade, would be a game changer at a fraction of the cost of the fines/taxes under the new law. Recladding an older building will allow insulation to be added before the new cladding is installed.

Forward-thinking boards should retain engineers and architects to help retrofit buildings in a cost-effective way to reduce carbon emis- sions and avoid the fines/taxes that are set to begin in less than two years. Plans should include electrical systems, converting from gas to electricity where feasible and addressing water usage.

This column presents a general discussion. This column does not provide legal advice. Please consult your attorney for specific legal advice.

Carol A. Sigmond
Greenspoon Marder LLP
590 Madison Avenue, Suite 1800
New York, NY 10022