Last September, New York City enacted a new pilot program that expanded the requirements for applying for Certificates Of No Harassment, which landlords need before altering their buildings. While experts worried that such a law would discourage building owners from undertaking renovations at all, that concern has not yet materialized.

However, if a building falls within the geographic boundaries of the pilot program, obtaining a CONH can be a complex and lengthy process. Landlords often need extra clerical assistance and expertise to navigate the landscape of the new pilot program.

“While the pilot program has made it more cumbersome to sell, purchase or renovate a building, we haven’t seen landlords halting renovations,” Rosenberg & Estis Managing Member Luise A. Barrack said. “Instead, owners whose buildings are in the pilot program are budgeting for the lengthy and costly process of collecting all the necessary information for a CONH application and submitting it to the NYC Department of Housing Preservation & Development.”

The CONH pilot program aims to protect tenants from unscrupulous landlords who would intimidate tenants or coerce them into leaving by making conditions unlivable — for example, through interminable renovations or turning off utilities. Currently, the program focuses on areas that are gentrifying and thus at higher risk for harassment.

In order to prove that a landlord did not harass any tenants, HPD contacts the tenants who have moved out of the landlord’s building. In the event that HPD determines a landlord has harassed tenants, the New York City Department of Buildings will not issue or renew permits for certain categories of work — including renovation or demolition — for five years.

The law also allows a landlord to redress the conduct by setting aside 25% of their building for low-income housing, giving priority to tenants who were allegedly harassed.

The pilot program increased the “look-back period” of HPD’s investigation from three years to five years. That increase is significant, Barrack said, as going back five years means a landlord may need to unearth legal and tenant records not just from a previous owner, Barrack said, but possibly the owner before that.

“We’re seeing that landlords do not have the bandwidth to do that tedious digging themselves, so they need to hire additional staff just to sort through these old records,” Barrack said. “But, for landlords who just own one or two buildings, hiring clerical staff might not be feasible.”

However, Barrack said, since the stakes of being accused of harassment are so high, landlords should do everything that they can to work with experts who understand the landscape of the CONH pilot program and what HPD expects from landlords.

“It’s every owner’s worst nightmare to be on the firing line of a harassment accusation,” Barrack said. “It can turn your life upside down to be on the defensive end of that kind of a claim.”

As to whether the need to file a CONH application could actually encourage landlords to hold off from renovating their buildings, Barrack said that landlords may be holding off, but for a different reason: Rent regulation laws are up for renewal in June.

With the possibility of wider or even “universal” rent stabilization, some landlords are waiting for the final word on what new regulations they will face before undertaking major building alterations.

“If rent stabilization gets expanded and there isn’t a concomitant tax reduction, landlords may choose to leave the residential world entirely,” Barrack said. “If they don't see returns on their investments, they won’t stay in residential real estate.”

This feature was produced by Bisnow Branded Content in collaboration with Rosenberg & Estis. Bisnow news staff was not involved in the production of this content.