A year ago, New York City began a three-year pilot for a law requiring property owners to apply for and receive a Certification of No Harassment (CONH) before making major changes to their buildings (such as changes in use or demolition) for single room occupancy dwellings (SROs) and in five specific geographic areas of the city. The legislation is designed to discourage owners from exerting undue pressure on tenants to vacate their rent-stabilized apartments. If the law applies to a building, the Certificates are required to obtain building permits from the Department of Buildings. [1]

Of course, this new policy has important implications for individuals and entities looking to buy, sell, or develop property in NYC. If you own a building subject to the new legislation and are thinking about selling to a developer, keep in mind that your building’s value will likely be lower if you are unable to acquire a CONH for each unit. That means you might be better off holding on to your building until you expect to be able to receive the certificate rather than taking a price hit by selling right away.

If you are a buyer hoping to develop a building in the parts of the city covered by the legislation, the opposite principle should hold. It would be best to ensure your new property has a CONH before buying or you could find yourself waiting a minimum of 3-5 years before being required to go through the certification process again, during which time you would be unable to make changes to your new property.

Anyone contemplating making changes to their property or selling should pay attention to this new legislation and consult an attorney should questions arise. There’s a chance this legislation and its cumbersome process could one day apply to the entire city.

[1] https://www1.nyc.gov/site/hpd/owners/certification-of-no-harassment.page