Developers beware: In a city that has been awash in an unprecedented building boom, a pair of government agencies is starting to wake up to the neglected problem of slipshod condo construction.
The attorney general’s office and the
Department of Buildings have vowed to crack down on shoddy developers.
Condo developers who flout the rules — with everything from leaky roofs to unheated buildings — could come under increased scrutiny by the attorney general’s office, which has ramped up its Real Estate Finance Bureau.
The division, long considered inert, has been working more closely with attorneys, representing both aggrieved buyers and their developers, to address complaints and prosecute condo building violations, attorneys said.
At the same time, new construction codes issued by the city’s Department of Buildings were scheduled to go into effect on July 1.
The modernized codes replace antiquated rules from 1968, introducing stiffer penalties for building violations and the promise of tougher enforcement.
Currently, the frontline in the fight against shoddy condo construction runs through the attorney general’s office. Attorney General Andrew Cuomo, elected in 2006, has pumped up the Real Estate Finance Bureau with four new appointees.
Critics contend that the previous attorney general, Eliot Spitzer, shifted too many resources and personnel to his fights with Wall Street.
“The few Spitzer left behind [in the Real Estate Finance Bureau] were doing all they could just to review plans so development could continue,” said Douglas Heller, head of the co-op and condo practice at law firm Herrick Feinstein, which represents condo developers. “That left nobody to mediate construction disputes, litigate, prosecute or investigate.”
As a result, the office had not filed a case in years — until last fall.
Presently, the biggest case the department is handling is that of Mendel Brach, a developer accused of numerous safety violations by 72 families who live in five of his buildings on Bedford Street in Brooklyn.
Adding insult to injury, the families said they couldn’t sell the faulty apartments due to the violations, as the city would not grant them certificates of occupancy.
Now, the AG’s office is “putting a lot of pressure on the developer to make good, to fix the building and to buy tenants out. There’s nothing better than getting the AG’s office in a battle against a developer,” said Adam Leitman Bailey, a lawyer who represents condo owners.
In theory, the attorney general’s office has enormous investigative powers, and by law, can prosecute with wide discretion.
But right now, the office is also taking on shoddy developers by restoring the mediation process. During mediations, the developer, condo owner and their attorneys convene at the AG’s office to hash out disputes.
“The payoff for developers is speedier
review of their condo plans, and the benefit to unit buyers is enhanced scrutiny of habitability issues and mediation of construction disputes,” Heller said. He noted that to the extent that the AG’s office gets involved and mediates more, “there will be fewer lawsuits that allege shoddy construction of condos.”
While the AG’s office is still backlogged with condo construction/fraud complaints, the agency is starting to process them at a faster clip, lawyers said.
Part of the blame for poorly built condos also resides with the Department of Buildings. The agency, whose job it is to make sure buildings are habitable, has often been asleep at the wheel and has also green-lighted bad projects, sources said.
But it’s the recent, high-profile accidents in the city, including the deadly crane collapses in March and May, that have shone a harsh spotlight on building safety and the consequences of poor construction.
Now, the buildings department says it’s taking big steps to update a system that has come under fire.
“Unfortunately, it took a major accident that was costly and devastating to force the issue into the forefront of everyone’s mind,” said Robin Abrams, executive vice president of the Lansco Group.
When new building codes go into effect on July 1, developers will face fines that have doubled and tripled for building violations, Bailey said.
As a result, developers will “hopefully think twice before violating the law because they know they’ll have to pay heavily for
it,” he said. “The changes are fantastic for homeowners.”
The DOB’s codes hadn’t been revised in 40 years.
“New York City has experienced an unprecedented construction boom across all five boroughs in the past several years,” said Robert LiMandri, acting buildings commissioner. “Already this year, there have been an unacceptable 13 construction-related accidents, one more than all of 2007 combined.”
LiMandri replaced Patricia Lancaster, who left in April following some of those
accidents.
One significant change to the construction codes is the revision of the current classification of violations. Violations are no longer designated “hazardous” and “non-hazardous,” but are now classified as “immediately hazardous,” “major” and “lesser.”
In addition to the new construction codes, the Department of Buildings has been phasing in six new multidisciplinary enforcement teams created as part of its Special Enforcement Plan.
The department has recently suffered from a dearth of engineering and contracting talent that has been wooed away to better-paying, higher-profile jobs in the private sector, lawyers and brokers said.
The new plan is designed to “raise the bar for construction standards citywide and hold developers accountable when they perform unsafe or non-compliant construction work with the issuance of stop-work orders and violations,” LiMandri said.