QUESTION
What are the requirements for building owners to be eligible for the J-51 tax incentive program?
0:32:41
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165 sec
The building owner cannot have any outstanding violations with the Department of Housing Preservation and Development (HPD) or Department of Buildings (DOB), or owe municipal charges to be eligible for the J-51 program, though they can have a payment agreement in place.
- The owner must notify tenants and HPD of their intent to apply for J-51 before starting work
- Violations like building code issues can exist at the start, but must be cleared by the time the owner submits the J-51 application after completing the work
- The owner completes the renovations first, then submits the J-51 application, which is different from the typical process where financing is secured upfront
- HPD aims to clarify notification requirements in the local law, as state law is not fully clear
Pierina Ana Sanchez
0:32:41
And I know in the in the new version, this is this the last point that you mentioned is is still in there about not allowing any debts to the city.
0:32:50
So does that include just property taxes and sewer, or is that also violations and fees and and other other So,
Kim Darga
0:33:01
also, in order to be eligible, an owner cannot have any BNC violations with HPD, cannot have any DOB violations, cannot owe municipal charges, they could have a payment agreement.
0:33:15
They and that includes charges associated not just with property taxes, but programs like ERP have to be paid or any relocation liens.
Pierina Ana Sanchez
0:33:28
But isn't, you know, playing playing advocate here, but isn't isn't it plausible or plausible that they are seeking the J51 incentive because they have a certain BNC class violations that they want to address.
Kim Darga
0:33:41
Yeah.
0:33:41
So it they don't have they could have violations.
0:33:45
That they are trying to address.
0:33:47
And at this start of the work, they have those violations.
0:33:51
In fact, I would encourage owners that have violations to consider this program.
0:33:55
They don't have to clear them until they submit the application to us.
0:33:59
They don't submit the application until the work is done.
0:34:03
So at the end of the day, for us to issue a certificate of eligibility, they have to have cleared the virus violations.
0:34:10
But at the start, they may they may actually be there.
0:34:14
And so this is a it's a weird process.
0:34:16
Like, you know, the way we typically operate is owner comes with they have a need, like, for a loan, let's say, we review it, we underwrite it, we provide the loan then they go do the work.
0:34:29
This is the opposite.
0:34:30
An owner deems that they're gonna I for j 51.
0:34:35
They've made an assessment.
0:34:36
They notified the tenant.
0:34:37
They notified the agency.
0:34:38
They go out and do the work.
0:34:40
When they've completed the work, then they submit the app vacation to us.
Pierina Ana Sanchez
0:34:44
So they have to notify HPD of their intent to use J51 prior to the commencement of the work?
Kim Darga
0:34:50
Yeah.
0:34:50
They're and this is one of the things that we're trying to clarify in the local law that isn't, I don't think, total com totally complete and state law, but they have to notify both tenants, and they have to notify the agency of the intent to apply for to the program.
Pierina Ana Sanchez
0:35:06
Got it.
0:35:06
They notify tenants of the intent to apply to the program or of the
Kim Darga
0:35:10
Yeah.
0:35:10
Of so they have to notify tenants that they intend to apply for j 51.
Lincoln Restler
0:35:16
Got it.
Kim Darga
0:35:17
Specifically.
0:35:18
And that has to happen in advance of starting the work.
Pierina Ana Sanchez
0:35:24
Okay.
0:35:24
So, okay, thank you.
0:35:26
And just getting back to the question was just seeking a breakdown of what kinds of what are the characteristics of buildings that received the incentives.