This is a preview of the full Fall 2025 Quarterly Newsletter. Click Here to read the full newsletter.
When is Enough, Enough?
For owners of interim multiple dwellings (IMDs) under New York’s Loft Law, the “narrative statement process” is often a dreaded experience. It requires owners to submit legalization plans and a written narrative to the NYC Loft Board, which are then shared with tenants. Tenants can raise objections and request changes to the proposed construction—sometimes extensively. These concerns are addressed in Loft Board-hosted conferences, which are intended to foster collaboration but often become prolonged and contentious, stretching over months or even years. If no agreement is reached, tenants may submit alternate plans, and the Loft Board decides which plan prevails. This phase can also take years. The process aims to protect tenants from unreasonable disruptions or loss of services, but in practice, tenant demands frequently exceed legal requirements. Owners are left weighing whether to concede to tenant requests to expedite construction or endure the full process and risk further delays. The complexity and drawn-out nature of the process make it one of the most challenging aspects of owning a Loft building.
The Affordable Housing Retention Act
In June 2025, New York State passed the Affordable Housing Retention Act (AHRA), making it easier to convert mixed-income rental buildings into condominiums while preserving affordable housing. AHRA lowers the tenant purchase threshold from 51% to 15%, allowing market-rate units to be sold as condos while income-restricted units are transferred to nonprofit ownership. The law includes strict eligibility criteria, tenant protections, and reserve funding requirements. With approvals needed from multiple agencies, AHRA offers a new path for developers to pursue conversions—balancing feasibility with long-term affordability. It marks a major shift in housing policy and opens new opportunities for adaptive reuse in NYC.
Court Sustains Most of Condo Board’s Claims Against Managing Agent
This article details a recent case in which a condominium board sued the sponsor and management company over construction defects, alleging fraud and breach of contract. While some fraud claims were dismissed, others—related to waterproofing, HVAC, and budget manipulation—were allowed.
The board amended its complaint to include the management company’s principal, citing concealed budget increases and dual roles in development and management. The court upheld fraud and inducement claims, finding the principal’s actions imputable to the company. Breach of contract claims were also sustained under the “continuous wrong” doctrine, as violations continued until 2018. However, claims for contractual indemnification and joint venture liability were dismissed. Both sides have appealed.
The case underscores the importance of specific allegations and reflects courts’ growing willingness to let construction defect claims proceed to trial.
Mandatory Inclusionary Housing at Ten Years: What Worked, What Didn’t, and What’s Next
By Camila Almeida and David Shamshovich
As New York City faces a historic housing shortage, the Mandatory Inclusionary Housing (MIH) program—now nearing its ten-year mark—offers a revealing look at what works and what doesn’t in zoning-driven affordability. Launched in 2016, MIH requires developers to include affordable housing in newly rezoned areas. While some rezonings like Gowanus have delivered thousands of units, others—such as East New York and SoHo/NoHo—have struggled due to misaligned incentives, legal delays, or market constraints. The article explores how timing, tax policy, and litigation risk shape outcomes, and how the next wave of rezonings aims to better coordinate zoning, infrastructure, and financial feasibility. With new tools like Universal Affordability Preference (UAP) emerging, the City is refining its strategy to ensure future rezonings lead to real housing production—not just policy headlines.
Setting an Undertaking for a Stay Pending Appeal – How One Court Did It in a Lock-Out Proceeding
This article explores how New York courts handle stays pending appeal in landlord-tenant disputes, focusing on a recent lock-out case, Tibta v. 156 E 21 LLC. When a tenant wins restoration of possession, but the property is occupied by others, courts must balance competing interests. The Civil Court declined a discretionary stay but granted an automatic stay under CPLR 5519(a)(6), requiring the owner to post a $41,600 undertaking—based on projected rental income—to pause enforcement during appeal. The decision clarifies how courts calculate undertakings in real property cases, especially when damages are hard to quantify. It also highlights the importance of judicial discretion, equitable considerations, and the risks of self-help eviction. For landlords, tenants, and legal practitioners, the ruling offers a precedent for navigating appeals in complex eviction scenarios.
Tiny Homes in the Big City: NYC’s New ADU and SRO Rules
By Ron Mandel and Alaina Greene
New York City is embracing smaller housing formats to tackle its deepening housing crisis. Recent zoning reforms under the “City of Yes” initiative have legalized Accessory Dwelling Units (ADUs) and revived interest in Single Room Occupancy (SRO) housing. ADUs—up to 800 square feet—can now be added to one- and two-family lots without discretionary approvals, though strict building code requirements and location-based restrictions apply. Meanwhile, zoning changes now permit compact SRO units without individual kitchens or baths, opening possibilities for adaptive reuse and new development. Despite these opportunities, regulatory hurdles remain, including owner-occupancy rules, flood zone limits, and habitability standards. Together, these reforms signal a shift toward flexible, affordable housing strategies—but success will depend on navigating complex zoning, building codes, and agency approvals. BBG is positioned to guide stakeholders through this evolving landscape.
Postponement of NYC Natural Gas Detector Law
New York City’s Local Law 157, requiring natural gas detectors in residential buildings, officially took effect on May 1, 2025—but implementation hit a wall. Supply chain disruptions, a product recall, and limited availability of compliant alarms made the deadline unworkable for property owners. In response, the City Council passed Int. 1281-2025, now enacted as Local Law 102 of 2025, postponing the mandate to January 1, 2027. The law also tasks the Department of Buildings with confirming whether four distinct battery-powered alarm models exist by July 2026. If not, the deadline could be pushed further to 2029. This delay offers breathing room for compliance, but also signals the City’s commitment to safety and accountability in residential housing. Property owners should stay alert for updates as the regulatory landscape continues to evolve.
New York State Increases the Filing Fees for Offering Plans
By Lloyd F. Reisman and Zachary C. Rozycki
Buried in New York State’s 2025–2026 Budget Bill are key amendments to Section 352-e of the General Business Law that will significantly increase filing fees for condominium and cooperative offering plans. Effective November 5, 2025, the maximum filing fee for offerings over $250,000 will double from $30,000 to $60,000. Fees for plan amendments and pre-filing applications will also rise from $225 to $750. These changes mark a substantial cost shift for developers and sponsors submitting plans to the Department of Law. With the deadline approaching, stakeholders should prepare for the new fee structure and consider submitting filings before the increase takes effect. The amendments reflect the State’s evolving regulatory landscape and underscore the importance of strategic timing in real estate development and compliance.
BBG Court Victory
In a motion led by partner Adam Bernstein, BBG secured summary judgment in a regulatory challenge to an apartment under unique circumstances, successfully proving a lawful apartment deregulation occupied by a rent controlled tenant since 1979.
The BBG team uncovered key evidence through their requests with DHCR for Maximum Base Rent records and the NY Public Library occupancy archives, and the building’s 1979 contract of sale, which demonstrated that the apartment was deregulated by operation of law after a rent-controlled tenant vacated more than 35 years ago and an extended period of owner occupancy.
Adam was supported by BBG partner Anthony Morreale and legal assistant Jaime Lopez.
Recent Transactions of Note
View a summary of selected recent transactions involving BBG’s Transactional Department including both leases, buy/sell refinancing transactions, and recent notable matters handled by our Construction team.
Co-Op/Condo Corner
Lloyd F. Reisman is a leader in the Firm’s co-op/condo practice, consisting of more than 300 co-op and condo Boards throughout the City, as well as sponsors of condominium conversions, and numerous purchasers and sellers of co-op and condo apartments, buildings, residences and other properties. Read their summaries of recent decisions in this space.
BBG Continues to Expand and Welcomes New Hires
BBG is actively looking for top talent to join our various practice groups. We were pleased to welcome two associates to practice in our Transactional and Litigation Departments.