By: Anna Avruchevsky, Esq.
Last year, Governor Hochul implemented a new law which may adversely affect many cooperatives and condominiums in New York City and your building may be one of them! (See if your building is listed here.)
The law requires buildings with non-union staffs to pay prevailing wages and benefits so that the building and its residents may continue to qualify for the co-op and condo tax abatement, which ranges from 17.5% to 28.1% of shareholders’ or unit-owners’ property tax bills. (The prevailing wage schedule for building service employees, which is set by the city comptroller, is found here.) However, if your building already has a unionized staff, this law will not affect it.
If your building is not unionized and you want to continue getting co-op/condo abatements, you must file a notarized affidavit with the city’s Department of Finance confirming that as of July 1, 2022 all of your building service employees will be paid the prevailing wage for their category of employment. The filing deadline is April 15. There are of course certain exceptions, co-ops and condos with an average per-unit assessed value of $60,000 or less are exempt from the prevailing-wage requirement. The affidavit must be filed by properties with 30 or more dwelling units and an average per-unit assessed value of more than $60,000, and by properties with fewer than 30 dwelling units and an average per-unit assessed value of more than $100,000. If you are unsure if your building meets the criteria, please review the list link above or contact us.
Property managers and building accountants will have their hands full weighing the cost/benefits of either paying non-union employees the prevailing wage in order to keep receiving the co-op/condo property tax abatement or maintaining the current pay and benefits structure and forfeiting the abatement. Another layer of analysis, which may have been the Governor’s intent, is the cost/benefit analysis of keeping the staff that so many of the residents have grown accustomed to and possibly losing them to building’s willing to pay the prevailing wages or unionize.
If you are uncertain whether your building is on the affidavit filing list or if your building is on the list and you require assistance in filing the affidavit or have any questions related to your building and New York City’s abatements, please do not hesitate to contact us.
Anna Avruchevsky, Esq. is a partner at Klein Greco & Associates LLP. Klein Greco & Associates specializes in real estate transactions and in providing general counsel to coops and Condominium Boards.