Crackdown on Parking Structures in New York City

12/12/23
Dominic P. Notti and Scott Smiler on the Crackdown on Parking Structures in New York City

Written by Partner Scott M. Smiler & Associate Dominic P. Notti, Gallet Dreyer & Berkey, LLP. Featured in New York Law Journal.

The Ann Street parking garage collapse in April has lead to new regulations for New York City parking structures. This article discusses these new regulations and what landlords, building owners and boards need to know about the increased scrutiny and the tight deadlines they will need to meet.

Public policy is typically dictated by events that cause harm to constituents, and changes to codes and regulations are made to prevent future harm. One such event was the Ann Street parking garage collapse, which occurred on April 18, 2023. The death of one person and injuries to five others as a result of the parking garage’s collapse motivated the legislature to make changes to the inspection and filing requirements for parking structures in all five boroughs of New York City. It is imperative for all owners of parking structures, whether they are individuals, corporations, condominiums or cooperatives, to understand the implications of the new requirements, impending filing deadlines and the consequences of non-compliance.

Definition of a Parking Structure

Only those structures that fall within the New York City Department of Buildings’ definition of a parking structure will be required to comply with the new inspections and filing requirements. A parking structure is defined as a building or portion of a building used to park and store motor vehicles, including open parking garages and enclosed parking garages (New York City Administrative Code Section 28-323.2).

Structures that do not fall within the definition of a parking structure include autobody repair shops, automotive showrooms or service stations, garages that hold less than three cars, unenclosed and unattached lots, and garages that are a part of a one or two-family home (New York City Administrative Code Section 28-323.1-28-323.2).

Changes to Inspection Requirements

On Oct. 17, 2023, New York City Department of Buildings’ Commissioner, James S. Oddo, formally adopted changes to the inspection requirements by adding a new section, Section 103-16, to Chapter 100 of Title 1 of the Rules of the City of New York.

Section 103-16 now requires:

  1. An owner must have an initial observation of the parking structure performed by a qualified parking structure inspector (QPSI). The results of the initial observation must be filed with the Department of Buildings (DOB) by August 1, 2024, on the appropriate DOB form. The exception to this requirement is if the owner files the required inspection prior to Aug. 1, 2024, then an initial observation report will not be required (1 RCNY 103-16(a) and (e));
  2. The QPSI must assess the parking structure by examining its structural components, waterproofing and fireproofing systems, physical wear and tear, and the parking structure’s history of maintenance and repairs (1 RCNY 103-16(b));
  3. The QPSI must use methods that will allow for a complete examination of the parking structure (1 RCNY 103-16(c)); and
  4. The QPSI must identify the most damaged portions of the parking structure, what caused the damage, and include any unsafe conditions in their report to the DOB (1 RCNY 103-16(d)).
    A major component of the QPSI’s report will contain one of three ratings for the parking structure. The ratings are Safe, Safe with Repairs and/or Engineering Monitoring (SREM) and Unsafe. A Safe rating signals to the DOB that the parking structure does not contain any structural issues that need repairing.

A SREM rating signals to the DOB that there are repairs needed in the parking structure and said repairs must be completed by the beginning of the next reporting cycle. An Unsafe rating signals to the DOB that there are urgent repairs that must be completed.  The DOB will require that Unsafe parking structure be shut down in the areas that need repair, and such repairs will need to be completed within ninety (90) days of the DOB’s notification.

These new requirements are to ensure that the parking structure is intact and that any compromises within the parking structure are reported to the DOB. This accomplishes the legislature’s public policy goal of limiting parking structure collapses in the future by addressing repairs before they deteriorate to the point of no return.

The Reporting Cycles

Local Law 126, which was adopted in 2021, added Section 28 to the New York City Administrative Code and established the reporting cycles for parking structure inspections. A parking structure owner will have to file a report with the DOB once every six years.

The reporting cycles are staggered, with different areas of New York City filing their inspection to the DOB. The first reporting cycle runs from Jan. 1, 2022, through Dec. 31, 2023. The areas of New York City that are required to file a report in this first cycle are Manhattan Community Districts 1 through 7 (i.e. all areas of Manhattan located below 59th Streets). The second reporting cycle runs from Jan. 1, 2024, through Dec. 31, 2025.

The areas of New York City that are required to file a report in the second cycle are Manhattan Community Districts 8 through 12 (i.e. all areas of Manhattan located above 59th Streets) and all Brooklyn Community Districts. The third reporting cycle runs from Jan. 1, 2026, through Dec. 31, 2027. The areas of New York City that are required to file a report in the third cycle are all Bronx, Queens and Staten Island Community Districts.

As we approach the end of the first reporting cycle, parking structure owners must be mindful of the filing deadline of Dec. 31, 2023, and future deadlines for the remaining two cycles. If an inspection has not been started yet, parking structure owners should look for active QPSIs on the DOB website to meet the deadline as soon as possible.

Penalties For Delays In Filing

What happens if a parking garage owner does not file timely? Penalties for non-compliance with Section 103-16 are higher than one may think and can rapidly add up. Section 103-13(e) of the Rules of the City of New York lays out the civil penalties associated with non-compliance as follows:

  1. An owner will be subject to a late filing fee of one thousand dollars ($1,000.00) per month starting on the day after the filing deadline of the reporting cycle ends (1 RCNY 103-13(e)(1)).
  2. If an owner fails to file the required report to the DOB, a yearly penalty of five thousand dollars ($5,000.00) per year will be added starting one year after the end of the reporting cycle deadline. This penalty will be in addition to the monthly penalty for late filings of a report to the DOB (1 RCNY 103-13(e)(2)).
  3. If an owner fails to correct Unsafe Conditions within the ninety (90) day window, a civil penalty of one thousand dollars ($1,000.00) per month will be added. This penalty will be in addition to the monthly filings for late filings and failure to file a report, and will continue until an amended report is filed demonstrating that the Unsafe Conditions have been corrected. The only exceptions to this penalty will be if the Commissioner of the DOB grants an extension of time to correct the Unsafe Conditions (1 RCNY 103-13(e)(3)).
  4. If an owner does not correct a SREM condition by the start of the next required reporting cycle, a one-time penalty of two thousand dollars ($2,000.00) will be assessed (1 RCNY 103-13(e)(4)).

Challenges to the above listed penalties must be made in writing within 30 days from the service of the violation. The proof that will be accepted for a challenge can include a copy of an acceptable initial compliance report, a copy of the amended compliance report, approved extension of time requests, and proof from a QPSI that Unsafe Conditions have been corrected and the violation was dismissed. The DOB has the sole discretion to dismiss or uphold any civil penalty (1 RCNY 103-13(e)(5)(i) and (ii)).

A cursory review of the above listed penalties demonstrates that if an inspection report is not filed timely, the civil penalties can rapidly accrue and add up to tens of thousands of dollars. Owners should not take the filing requirement lightly, and must work with a qualified QPSI as soon as possible to ensure proper compliance. Condominium and Cooperative Boards should review their reserve accounts and assess whether any assessments may be necessary to repair any unsafe conditions in their parking structures.

Conclusion

Ensuring proper compliance with any new regulation at its outset is only the first step. It is a balance of ensuring an owner has enough funds to cover the cost to repair any newly discovered unsafe conditions within the 90-day repair window; along with discovering any potential problems well before the next deadline so as to provide for repair funds far in advance of the next reporting cycle. Owners must stay vigilant in keeping up with Local Law 126 or will face very costly penalties.

Scott M. Smiler is a partner at Gallet Dreyer & Berkey.  His practice focuses on real estate and cooperative & condominium law, and corporate law.

Dominic P. Notti is an associate at Gallet Dreyer & Berkey, where his practice includes real estate law and litigation. 

about the attorney

Scott M. Smiler

Partner

For the past two decades, Scott's practice has focused primarily on transactional real estate matters — Cooperative and Condominium Board Representation; Buying and Selling of Properties; Commercial Leasing and Neighbor Access Agreements.

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Dominic P. Notti

Associate

Dominic has experience in a broad range of transactional and litigation matters. At Gallet Dreyer & Berkey, he has assisted in advising cooperative clients on amending proprietary leases, drafting AIA riders for construction transactions, representing buyers and sellers in residential real estate transactions, general litigation matters, and various other transactional matters.

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