The Big Apple: Developers under gun and ground

Important housekeeping announcement:  There will be reduced frequency of posts until after Labor Day, but you can look forward until then to Out and About, some typically critical posts taken on The High Road, perspectives on sellers and buyers, and other information meant to be both illuminating and, occasionally, even entertaining.  This regular Friday feature will return on September 9, when it will be combined with Weekly Roundup.

Fair Housing Law settlement points to many more in thousands of other buildings

The developer and architect of an Upper West Side luxury rental apartment complex, The Melar, have settled with the federal government on charges that their new residential building violated federal law because it is inaccessible to the disabled, according to U.S. Attorney Preet Bharark.

The settlement may have an impact on more than 100,000 residential properties across the city.

The settlement ends three years of negotiations between the government and the project’s developer, Friedland Properties, or L&M 93rd Street, and the project’s well-known architect, Costas Kondylis & Partners.

The developer of the 143-unit property, at 250 W. 93rd St., has agreed to establish a $180,000 fund to compensate individuals harmed by the lack of accessible features in the building and to pay $40,000 in a civil penalty to the U.S. Separately, Costas Kondylis agreed to pay a civil penalty of the same amount.

Friedland was one of 11 developers that received notices a few years ago that their properties violated the Fair Housing Act.

But President Steven Spinola of the Real Estate Board of New York contends that each property was built in compliance with city law and that developers believed they were, therefore, compliant with federal standards.

“We wanted the federal government to say that the city code meets the law,” said Spinola, adding that more than 100,000 residential properties across the city could be at risk of violating the Fair Housing Act.

By digging deep, developers add square footage that has legally limited usage

As developers seek to wring every last bit of space out of their projects, another term has cropped up more and more: “rec room,” meaning an underground space that is not legally a bedroom.

Not to be confused with common spaces open to all residents in apartment buildings, these are finished, underground rooms in ground-floor dwellings that the city does not consider habitable space. Sometimes they are carved out of the cellars of old brownstones, sometimes excavated from deep in the ground of new condominiums.

They often come with a garden or a patio and add valuable square footage at a discount, says the New York Times.

Lenders balk at mortgages in buildings that fall short of standards in ‘The Selling Guide’

In “The Selling Guide,” Fannie Mae and Freddie Mac spell out guidelines that have been on the books for decades, but lenders have started to follow them more closely only in the past few years. And the guidelines themselves have become more rigorous.

Each lender has to make sure that a co-op or condo building in which a prospective purchasers wants to live meets the publication’s specifications at the same time that it scrutinizes the buyer’s individual finances.

One standard that frequently trips up condo and co-op loan-seekers requires that a building set aside 10 percent of revenue for a reserve fund. If a building does not have that much, forget about a loan.

Habitat magazine explores other of the top five standards that buildings must meet if prospective purchasers are to receive mortgages from institutional lenders.

Developers owe city more than $10 million in taxes on stalled construction sites

Fledgling developers and those with shallow pockets have not only stopped construction but also stopped paying city tax levies.

The New York Post sampled some 40 of the city’s 129 stalled Manhattan construction sites and found more than half owe taxes totaling more than $10 million.

Some sites are on the city’s recently released 10-day tax lien sale list while others are not. The lien list covered 15,260 parcels owing $397,942,197, only some which has been paid off.

Judge allows discrimination suit to proceed against the Dakota

A racial discrimination suit against the storied Dakota co-op apartment building can go forward, a State Supreme Court judge ruled.

Earlier this year, Alphonse Fletcher Jr., a prominent black investor and former president of the building’s board, sued the co-op, one of the most restrictive in the city, charging discrimination, defamation, breach of fiduciary duty and retaliation after the board rejected his application to buy an apartment next to his eight-room, 2,600-square-foot, three-bedroom apartment.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
Web site

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