Today is the five-month anniversary of my purchasing the building and official work still hasn’t begun. I’m expecting approval of my plans some time in the next few days, and after that we can start pulling permits to do work. But a lot has happened leading up to this…
The New York City Department of Buildings
In 2010, budget cuts hit the Department of Buildings hard, and most if not all of the staff have been cut back to three days a week. What this means is that a difficult process just got even more difficult.
When I started to try and contact the department before I bought the building it quickly became obvious that they just weren’t going to be very helpful. It’s a classic New York story: You go to the DoB to find out information on your property. They tell you that there’s no information and no way to look it up. But the moment you start construction, the inspector is there and suddenly they know exactly where the property lines are, what the air rights are, the existing certificate of occupancy and so on.
The Certificate of Occupancy is a really great example of this. This is the paper that proves you have the right to use a property for a certain purpose. It is vital when it comes to things like getting insurance.
When digging through the DoB’s records I was able to find that the building does have Certificate of Occupancy. However there was no digital copy of it. So I contacted the DoB office to see if I could come look it up. Apparently I’d have to wait for permission. How long would that take? Who knows. So I let it go, relying on the fact that one does exist somewhere and that it should theoretically work in my favor.
When my Real Estate lawyer was finally able to dredge up a copy we found it to be a photocopy of a carbon copy of a scribbled paper from 1925. It was totally illegible. So we had to wait until someone could read it. Apparently my building is officially a “shed for storing barrels,, at least as far as the city is concerned.
That’s all well and good, but I happen to know that the previous tenant was a Physical Therapy office. There’s no way they could operate without insurance, and there’s no way they could get insurance without a Certificate of Occupancy. So — somewhere — there is one stating that it is legally either an office or a medical office. If it says “office” then all is well, however if it says medical office I may have to file to change it. And there’s absolutely no way for me to find out until someone complains about the studio (which will hopefully be never, though musicians have been known to get drunk and smoke outside of my place while conversing loudly). Then, suddenly, the DoB is bound to have exactly the information they need to give me a hard time.
Having seen all this in a very short time it became clear to me that I needed to hire an expeditor. I got a referral for Alexis from CODE LLC. Basically she’s the middle-woman between myself and the DoB, as well as any other city departments I may have to deal with. Without hiring an expeditor I have no idea how you could do any construction in this crazy city.
Good, Old Fashioned NYC Steam Boilers
The next thing to become an issue was the building’s existing steam boiler. I now know more about boilers than I ever thought I would. Apparently steam boiler systems are extremely rare everywhere in the world except New York City. I was told the statistic that there are more functioning steam boilers in NYC than the rest of the world combined. The reason is that it’s a very, very finicky system.
At one point boiler explosions were the number one cause of death in the United States. It took decades of trial and error to bring them to a point where they were safe to use. Since a large portion of existing New York was built around the start of the twentieth century this was the technology implemented, and since it’s so expensive to replace, the existing units keep getting repaired, piece by piece.
The previous owners of my building had installed a brand-new steam boiler two years before selling the place. Since the rest of the infrastructure was already in place it was probably the cheapest option available on hand. However they didn’t bother to go through the proper permitting process and ended up with a bunch of citations for possible fines from the city.
As we learned earlier, trying to get information from the city is a long and often impossible task. We knew that they had failed inspections in 2002, and that they were cited for not being inspected for the following two years. But there was no available record of anything after that.
Fines for steam boilers can be extremely high (remember how dangerous they can be), and it’s entirely possible that there were thousands of dollars in back fines associated with the lack of inspections with no way to find out for sure until the city decides to send you a bill.
Luckily my lawyer was smart enough to spot this issue during the sale and got a large chunk of money held in escrow until they dealt with it. To this day it’s still unresolved. What I do know is that if they haven’t gotten their money yet it means this process has been extremely difficult and expensive. When purchasing a place, be absolutely sure that there are no DoB violations on the property, or at least have money put aside to ensure that the seller deals with them.
Inheriting Tenants, Rent Stabilization, Landlord Stuff!
The previous owner left me the gift of one tenant in the building when he moved. If my sarcasm isn’t clear enough let me put it this way: crossover tenants are a huge pain.
I got lucky and the woman who was living there was actually very nice and easy to deal with. However there were a couple problems. First off she was only paying $600 per month for a two-bedroom apartment on Graham Ave. In my business model I’m relying on at least $1,500-2,000 per month rent in order to meet expenses. So there was no way I could afford to keep her.
Secondly she had been living in the apartment for fourteen years. Fifteen years is where rent stabilization laws start to come in to effect. If I waited until construction was finished I risked having to spend a long time in court to clear the place out, and in turn losing myself all that potential rent.
So I had to ask her to leave. It was certainly a difficult thing, especially considering the fact that she has a young son, but the previous owner had intentionally left the tenant situation very vague in our conversations and this is where I was stuck. Realizing that no matter what I did she could still hold me up for months simply by refusing to move I offered her a lump of cash for moving expenses, hoping that would keep the process moving, and I’m lucky I did. Without it I think I’d be in court right now dealing with an eviction.