Dear Friends of Adler & Stachenfeld:
As a reminder, May 1, 2025, is the filing deadline for the first Local Law 97 (“LL97") Compliance Reports from large NYC building owners of covered buildings to report a building’s 2024 emissions. This day has been 6 years in the making, as LL97 became law in the spring of 2019. Needless to say, a lot has happened in NYC real estate (and the world) since then. Nevertheless, the City of New York has never lost sight of LL97, nor have we. Please click here for our firm’s previous alerts relating to LL97.
Notable Exceptions to May 1, 2025 Filing Deadline
Owners of covered buildings containing at least one but fewer than 35% rent-regulated units have until May 1, 2027 to submit their first LL97 Compliance Report. Buildings that contain at least one rent-regulated unit as a condition to a loan, grant, tax exemption, tax abatement, or conveyance of property from any state or local governmental agency or instrumentality pursuant to the private housing finance law, the general municipal law, or section 420-c of the real property tax law has until May 1, 2036 to submit their first LL97 Compliance Report.
New buildings that have a Temporary or Final Certificate of Occupancy (“TCO” or “FCO”) issued after January 1, 2023 must begin reporting the first full calendar year after issuance of the TCO/FCO. So, buildings with TCOs/FCOs issued after January 1, 2024 do not need to file a report by May 1, 2025, but will be expected to file a 2025 report by May 1, 2026. Buildings with 2023 TCOs/FCOs will be expected to report their 2024 emissions by May 1, 2025.
New owners of covered buildings are exempt from having to report on the calendar year that title was transferred, provided the new owner was a bona fide purchaser. So, new owners that purchased covered buildings after January 1, 2024, do not need to file a 2024 report by May 1, 2025, but will be expected to file a 2025 report by May 1, 2026.
Penalty For Failure To File A LL97 Compliance Report
Although May 1st is the filing deadline for owners that do not fall under the above-mentioned exceptions, LL97 provides for a 60-day grace period. Furthermore, for an additional $60 filing fee, owners have until June 30, 2025 to request a filing extension to August 29. Failure to timely file a LL97 Compliance Report after August 1 will result in a civil penalty in an amount equal to $0.50 per gross square foot each month, including the 60-day grace period. This civil penalty is in addition to any potential civil penalty owed as a result of LL97 noncompliance, which is $268 per metric ton of carbon that exceeds a building’s permitted emissions.
Filing a LL97 Compliance Report
If a building is subject to LL97 requirements, hopefully by now the building has already engaged a “Registered Design Professional” expert (an architect, engineer, or retro commissioning agent) to prepare the LL97 Compliance Report, as it will take a bit of time over the course of at least several days for the expert to submit the report, let alone make preparations for submission.
First, the LL97 Compliance Report filing fee must be paid via DOB NOW (so a DOB NOW account must also be created if the filer does not have one yet). Filing fees are generally $210 but increase with complexity. Payment of the filing fee is a prerequisite to filing the report, as payment “unlocks” the online reporting platform for usage.
Next, ESPM registration and creating a property profile for the building are required if one doesn’t already exist for Local Law 84 benchmarking purposes. The ESPM profile will contain the building’s gross floor area and primary property type and be linked to the building’s utility providers, who will then upload the building’s energy consumption data to ESPM.
Finally, BEAM registration will occur using the same credentials used via DOB NOW and ESPM (which is why these steps need to be completed in sequence). BEAM is linked to DOB NOW and ESPM data and is where the owner’s expert will upload remaining information relating to LL97 compliance calculation, such as subdividing and verifying a mixed-use building’s total square footage by use. Once all pertinent data is entered into BEAM, BEAM will automatically calculate a building’s emissions limit. A signed attestation from the owner’s expert must be uploaded to BEAM confirming that the submitted information is accurate to the best of their knowledge and ability.
Upon submission of the LL97 Compliance Report, DOB will review such report to confirm one of the following:
The building is compliant with LL97;
The building is not compliant with LL97 and a penalty is owed; or
The building is not compliant and seeks a mitigated penalty by demonstrating “Good Faith Efforts.”
Enforcement actions are expected to be in the form of a DOB violation and will not occur until after August 29, 2025.
