John Osborn is a partner in the New York City and Westchester County law firm of John E. Osborn PC, which represents school districts, universities, hotels, and other real estate owners. His e-mail address is josborn@osbornlaw.com.

N.Y.C. Façade Inspection Law Presents Quandaries

Between “safe” and “unsafe” designations under Local Law 11, owners and engineers can find plenty of regulatory obstacles.

by John E. Osborn

Feb. 21, 2007, closed the sixth five-year cycle for filing critical examination reports with the New York City Department of Buildings under the city’s façade inspection laws.

Under the law, the owner of a building with at least six stories above a basement must retain a professional engineer or registered architect to conduct a critical examination of the building’s exterior to determine its condition and whether remedial work is required.

The critical examination report must document the condition of the exterior walls and appurtenances as safe, unsafe, or “safe with a repair and maintenance program,” commonly known as SWARMP. The “safe” designation essentially is a façade that does not require “repair or maintenance to sustain the structural integrity of the exterior of the building that will not become unsafe during the next five years,” while an “unsafe condition” is one that “is dangerous to persons or property and requires prompt remedial action.”

But in the middle is SWARMP, which is defined as an exterior that is “safe at the time of the inspection but requires repair or maintenance during the next five years in order to prevent its deterioration during that five-year period into an unsafe condition.”

This category was created when Local Law 11 of 1998 took effect. Prior to the 1998 law, which built upon Local Law 10 of 1980, the category was called “precautionary” and only required that the owner monitor the condition, making repairs at its own discretion.

Now, under SWARMP, the repairs must be made within a timeframe recommended by an inspecting engineer or architect and before the next inspection deadline at the end of the five-year cycle. More importantly, an engineer or architect may not file a SWARMP classification on a building for two consecutive reporting periods, meaning that if a building gets a SWARMP classification in one reporting period, it must correct those deficiencies during the next five year cycle.

The new rules also require detailed photographs to itemize defects and compare the façade prior to and after repairs.

The 1998 change has turned out to be significant, says David Peraza, senior managing engineer at Exponent, an engineering consulting firm.

“Forcing the building owner to do work on areas now technically classified as ‘unsafe,’ where simply keeping an eye on them would have been sufficient, is an overreaction and is a flaw in Local Law 11,” he says.

While fines for failing to file Local Law 11 reports on time tend to be fairly nominal, failing to address conditions classified as unsafe may be punished more heavily – with fines of up to thousands of dollars a month. But the fines are not an effective deterrent, says Eric Hammarberg, vice president at Thornton Tomasetti, a New York-based engineer.

“It does not appear to be the fines that motivate property owners,” he says. “It is the fear of litigation resulting from actual unsafe conditions that may cause injury and the increase in insurance premiums, which are a certainty once an accident occurs.”

Local Law 11 has other flaws, such as assigning excessive liability to the architect or engineer for a review whose requirements are largely superficial, Peraza says.

“To the extent a building is declared safe and, subsequently, masonry cracks and falls to the street causing an injury, there is no doubt that the design professional will be sued,” he adds. “Rather than creating such a clear jeopardy for the design professional, it may be more appropriate to adopt the approach used in bridge inspection, wherein the state government does the inspection and assigns a numerical rating to each bridge, indicating its condition, which is used to determine what repairs are to take place.”

In addition, requiring an architect or engineer retained by the owner to perform the façade inspection report creates a significant tension for the designer between upholding professional responsibility and attempting to avoid mandating that its client perform expensive work. For instance, erring on the side of making unnecessary repairs can result in significant additional expense from scaffolding, procuring and mobilizing a restoration contractor, and engaging a design professional for the project.

Furthermore, because the owner’s “feet have been put to the fire” by not being allowed to file SWARMP a second time, the tension between professional responsibility and the pressures of cost effectiveness and expediency have become more pronounced.

And there is skepticism among design professionals regarding the fact that Local Law 11 only covers buildings that are six stories or taller in height, because it is clear that masonry can also fall from buildings under six stories in height.

While the industry has not yet been able to compile clear data showing the effect of the SWARMP changes on the amount of restoration work, there is concern that it is having unintended effects, including encouraging owners of SWARMP-classified buildings to seek out design professionals who are willing to sign off on such properties after completion of only a minor scope of work.

It is clear that the New York City façade inspection and repair laws have shown maturity, because the process is well known and the cost is now a recognized capital expense. And it is clear that owners who fail to adopt a rigorous and disciplined approach to the requisite inspection and restoration will be seriously disadvantaged when they are required to spend even more money to address what was missed if corners were cut.

“The acceleration of decay dramatically increases in buildings between 60 and 80 years of age,” Hammarberg says.