MMI: Welcome to Landlords TV, a production of LandlordsNY. This is L & Tea time with Michelle, the show where you get to have a cup of tea with me, Michelle Maratto Itkowitz and we discuss an area that I have been practicing law in the City of New York for over twenty years and that is –real estate. And today I am honored to have as my guest Neal Kurzner of Allbren real estate. And Neal you are a LandlordsNY member for…?
N: For about a month, Michelle.
MMI: About a month, very good. All right, so let me see if I have your stats down. You started your career on Wall Street at a very interesting time in Wall Street’s history. And you got your MBA at Wharton at UPenn, manufacturing, distribution, heavy business career, but a call of real estate pulled you, and interestingly enough you’ve ended up in mobile home parks. So, you have slew of mobile home parks all across the United States.
N: That is correct Michelle, yes. real estate has been in my blood for a long time and I finally pulled the plug and did something about it several years ago.
MMI: And the family in New York and their buildings kept saying, “Neal, now that you are in real estate, manage our buildings, come back, take over Allbren, take over our buildings.” And, eventually you succumbed to that too.
N: Well, that’s correct. Typically in New York you have an older generation owns a lot of buildings and don’t know what to do with it as they pass it on. New York requires people with experience to know how to navigate through our regulations, so they asked me to come on board and since coming on board I expanded business markedly. We manage buildings throughout New York City.
MMI: So, you are located in Queens, but you have buildings all over the city.
N: That is correct.
MMI: And interestingly enough, you mentioned to me that, even though your other holdings are extensive and they are across the United States it takes a fraction of your time to manage, compared with what the New York City real estate takes.
N: Yeah, I mean New York is an extremely difficult place to do business because of the regulations, the laws, the supervision. When you do business outside of New York in various jurisdictions where the court system is so pro landlord and there are many of them, and the court system, the regulations leave you alone. I am able to manage hundreds of tenants across the country part-time. And in New York unable to manage hundreds of tenants, rent-stabilized tenants full time with a full staff.
MMI: And a lot of people have this exact problem and you also mentioned to me: New York City is just filled with curveballs for the person who owns the building, which is why you need a good management company.
MMI: And specifically, we can talk about a million of those curveballs today but we are going to help our audience out with backflow-prevention regulators.
N: Yes. A couple of years ago the DEP passes a new regulation that got put into New York City law that most buildings, not all buildings needed to do a backflow preventer- an RPZ (reduced pressure valve), the concept of it is very, very good because the ideas the fresh water flows into yours buildings and what they want to do in the event of an accident or an emergency if that water were to become contaminated they want to prevent it from being able to flow back into the fresh water pipes. So, they’ve required buildings to put in backflow preventers. Again, just a great concept, the execution, however, being in the city of New York makes it a lot more difficult.
MMI: The first level of that I find is that a lot of people just don't understand if their buildings need a backflow regulator. It seems that if you look on the city’s website, it sweeps in a lot of buildings. Is that true?
N: It sweeps in most buildings, a building that has a boiler that requires chemical treatment which is any steel boiler, which is probably most boiler qualifies under this. If you have retail stores, you have dry cleaner, you have a restaurant, you have a deli you are likely to be required to have a backflow preventer. Often the only way you find out about it is either getting a fine from the DEP or and order from the DEP.
MMI: So, you need a licensed plumber, I am going to assume, to pull permit, any…
N: Like everything else it is not easy. The DEP and the City do not “trust” the landlords to do the right things so, they have required that you hire a professional engineer and/or architect to design the system. They have very specific rules as to what the system should look like. You then have to get it approved by DEP, you then have to install it, and you then have to get it inspected, and then get it signed off. And that is a very time-consuming and onerous process.
MMI: And I bet expensive.
N: It is very expensive.
MMI: And so, when you are done, are there at lease any other benefits in the building? Is the water pressure better in your building when you are done?
N: No, that is actually, you were referring to curveballs. That is really one of dirty little secrets is that if you have a building that is big enough, I have installed them in buildings that are six stories tall, what they do not tell you is because you have reduced the pressure, it reduces the water pressure. And significantly, to the point that your fifth of six floor tenants would start complaining that they do not have enough pressure even to flush a toilet or to take a shower.
MMI: So, then the solution to that is?
N: The solution to that is putting in a very expensive pump. And again that can be just as expensive as the backflow preventer.
MMI: So, may be that the tip here for the membership is – plan the pump in if you have to at the beginning. Would that help?
N: As you should, because you are again required to have a permit for it, so you might as long as you are designing it and as long as you are getting an approval, and as long as you are getting a permit you might as well tie that in one system at one time.
MMI: That is actually a great advice. Could you hang out for a little bit and just watch me do the teaching portion?
N: I’d love to. Thanks.
MMI: Ok, so we will be right back.
MMI: Ok, so what we are talking about today is the multiple dwelling registration and the effect of not doing it on a landlord and tenant case. So, Multiple dwelling law 325 says that-“every property manager and every owner has to file a form with the Department of Housing Preservation and Development (“HPD”) that says the address of an officer or director of the owner if the owner is a corporation and/or an address for the property manager. So, basically the multiple dwelling registrations real purpose is to connect human beings with the building in case they have to be found by the department. Now, it is a simple little form, it is thirteen dollars to register it. So, what’s the big deal? The big deal is if you allow your multiple-dwelling registration to lapse, the statue gives some pretty stiff penalties. And the penalty is that a landlord is not allowed to recover rent from a tenant when the multiple-dwelling registration is not filed. Now, it is a tricky little thing because recover rent means the following. If the tenant voluntarily pays the rent, the landlord can take it. If the tenant pays the rent and there is no multiple-dwelling registration and the landlord takes it, the tenant cannot sue to get it back. That is not what we are talking about here. What we are talking about here is the issue that if the landlord cannot recover the rent, then the landlord cannot sue the tenant for the rent if they do not have the multiple-dwelling registration. And to actually bring this home, uniform rules of the Civil Court of the City of New York actually really bring this home, because the civil court is where summary proceedings are brought for the recovery of non-payment of rents. So, your non-payments are in Civil Court and Civil Court says-in your non-payment petition you must allege something to us about the multiple-dwelling registration, you either have to say that this building is not a multiple-dwelling which by the way is three or more units, three or more residential units, or it has to say it is a multiple-dwelling and we are in full compliance with the multiple-dwelling law. So, you have to be able to plead that. I always, always check when I am representing a landlord or a tenant I always check the multiple-dwelling registration status before I start working on the case. Sometimes you see that people just let it lapse, especially when a building has changed hands. So, can this be fixed? Let’s say you own a building or you are a property manager, your lawyers brought a case and then, uh oh, the tenant asserts a defense, no multiple-dwelling registration. It is not the end of the world in a sense this is an “amendable defect”. Which means that your lawyer can put the case on hold and you fill out the forms, you pay the thirteen dollars, and you ask the court to amend your petition, and you can get the train back on the track on that one. But, it is just something to keep up with; it is a “stitch in time saves nine” kind of a landlord and tenant litigation thing. Make sure before you seek rent from a tenant that your multiple-dwelling registration is up to date.
MMI: So, Neal what did you think of the teaching section?
N: I learned a lot, thanks for sharing.
MMI: Would you come back and may be talk to us about local law eleven next time?
N: I look forward to that.
MMI: Thank you very much. This is Landlords TV. You are watching L & Tea time with Michele brought to you by LandlordsNY.