3 Compliance Mistakes No Owner or Manager Should Ever Make
Real estate is tough business—especially in New York City. Violations, fines, inspections, and complaints—they cost money, result in lost revenue and time, encumber the refinancing or sale of a building and increase risk.
While there are literally hundreds of compliance challenges that can arise, here are three of the most common mistakes that, if avoided, can save you thousands of dollars and countless hours of headache:
Mistake #1: Not being vigilant about attending violation-related hearings
For most property managers and owners in NYC, building violations are inevitable. One key to successful property management is dealing with those violations in a timely and effective manner. The costliest yet avoidable mistake we see with handling a building violation is missing the scheduled hearing. Often the result of not knowing about the hearing or lack of communication with the person who is supposed to attend it, this mistake results in a nominal fine turning into an astronomical fine—up to 5 times the minimum penalty. For most elevator violations, that’s $2500 instead of $500. For facades or illegal signs, it can be $12,000 or more. Being vigilant about attending hearings can save you thousands or even tens of thousands of dollars a year.
Mistake #2: Always Assuming Your Vendors Have Followed Through on Mandated Inspections
Inspections on key equipment such as elevators or boilers must be completed on a regular basis, often yearly. Keeping track of, scheduling and performing these mandated inspections are often challenging enough. Following through to make sure the paperwork gets filed properly and on time, however, is critical. At SiteCompli, our clients know that an inspection is only as good as the paperwork that’s filed with the City. Filing paperwork that is late or not completed correctly is an easy way to be hit with large penalties, which can be as much as $5,000 per elevator device, $1000 per boiler or more for other mandated inspections. Our clients use SiteCompli to generate detailed reports that indicate what paperwork has been filed with the city and what inspections may have been missed and review those reports on a regular basis with their vendors.
Mistake #3: Not worrying about tenant complaints until they turn into violations.
Let’s face it, tenants will complain. Sometimes those complaints are justified and sometimes they’re not. But tenant complaints are too important to just ignore. They often serve as an early warning signal for critical issues in your building and are often predictive of visits by NYC inspectors. One of the reasons my company, SiteCompli, has become an industry standard is because it notifies owners and managers of 311 complaints filed by tenants, so they can react before the building inspector arrives and before the complaints turns into costly violations. Likewise, analyzing and trending your portfolio’s complaint information allows you to proactively reach out to top complaining tenants to address their concerns.
While there are literally dozens of agencies in NYC that regulate real estate and hundreds of local, state and federal laws that owners and managers must abide by, avoiding these three simple yet costly mistakes is good for your bottom line and your sanity.