This is a preview of the full Winter 2024-25 Quarterly Newsletter. For in-depth analysis and further insights into these topics, Click Here to read the full newsletter.
It’s a Crime!
Aaron Shmulewitz’s article on the New York City “Fair Chance for Housing Act” (Local Law 24 of 2024), effective January 1, 2025, significantly restricts co-op and condo Boards, rental property owners, and managing agents from rejecting applicants based on criminal history. The law prohibits most background checks except in cases of sex offender registry listings or recent misdemeanor and felony convictions, introducing a complex and cumbersome screening process. Violations can result in severe penalties, leaving Boards, owners, and agents exposed to liability if they conduct background checks improperly. Shmulewitz argues that the law effectively forces housing providers to abandon criminal background screenings, potentially compromising residents’ safety and quality of life.
SoHo and NoHo Residential Conversion Process in Flux
BY RON MANDEL AND FRANK NORIEGA
Ron and Frank detail the Appellate Division, First Department ruling on December 5, 2024, that the required $100-per-square-foot fee for converting joint living-work quarters for artists (JLWQA’s) into residential units was an unconstitutional taking, creating uncertainty around the conversion process. The Special SoHo-NoHo Mixed Use District had previously established procedures for these conversions, exempting them from affordable housing requirements, but the court’s ruling has left the future application of zoning laws unclear. The decision raises questions about whether Mandatory Inclusionary Housing rules will now apply, potentially altering the path forward for conversions in the area. The article notes that BBG is monitoring developments and encourages stakeholders to seek legal advice for potential opportunities amid the evolving regulations.
FARE Act Shifts Broker Fee Responsibility
The New York City Council passed the Fairness in Apartment Rental Expenses Act (FARE Act) on November 13, 2024, shifting the responsibility of broker fees in residential rental transactions to the party that hired the real estate agent—effectively preventing landlords from requiring tenants to pay for the landlord’s broker. The law takes effect on June 14, 2025, and imposes civil penalties for violations, while also requiring rental listings to disclose fees clearly. It applies only to residential rentals, excluding co-op sales and commercial transactions. The article notes ongoing uncertainties about the law’s impact on standard broker fee structures and rental market dynamics, particularly in relation to recent rent control measures.
Mortgage Recording Tax: The Tax That Can Be an Asset
In New York State, borrowers must pay the Mortgage Recording Tax (MRT) when securing a mortgage loan, but this tax can later serve as a financial asset. If a borrower refinances or sells a property, the existing mortgage can be assigned to the new lender, allowing the borrower or buyer to receive a credit for the previously paid MRT—potentially reducing their tax burden. This strategy is common in commercial real estate transactions, with sellers often negotiating to retain a portion of the tax savings. The article emphasizes the importance of planning ahead to take full advantage of MRT avoidance opportunities and recommends consulting legal experts when navigating mortgage assignments.
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 Land Use/Zoning team.
BBG In The News
Sherwin Belkin was quoted decrying the perceived anti-development impact that Brad Lander would have as Mayor, available here; in the Sunday New York Times on whether landlords can substitute QR codes and facial scans for tenant keys, available here, and in law360 on the Good Cause Eviction Law, available here. David M. Skaller was referenced in a November 14 article in Curbed.com on a case involving a problematic tenant making apartment alterations without the owner’s consent.
A $59 million loan transaction in which BBG represented the developer was reported in pincusco.com
The Firm’s representation of the Hudson Valley Property Owners Association’s challenge at the State Court of Appeals to the imposition of rent stabilization in the City of Kingston was reported in Hudson Valley One on November 29, available here.
BBG Continues to Expand and Welcomes New Hires
The Firm recently hired three members of professional support staff to aid our information technology, accounting, and legal services practice groups.
2025 Partner Promotions
We are thrilled to recognize and celebrate the well-earned Partner promotions of some outstanding members of our team, effective January 1, 2025.
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