"It is becoming more and more common for purchasers, attorneys, and lenders to require more than just a note stating that a property built prior to 1938 without a Certificate of Occupancy can legally be used as intended. The NYC Department of Buildings typically did not require a certificate of Occupancy before January 1, 1938 to confirm the legal use of the property. In cases where parties in a real estate transaction are worried about the legality of the current usage of the property that was built prior to 1938, the DOB issues a Letter of No Objection (LNO). This is a letter directly from the DOB stating that they have no objection to the current usage of the property and a New Certificate of Occupancy is not required.
Properties built before 1938 in Harlem and Upper Manhattan, as well areas in Brooklyn, have seen a tremendous increase in value over the past ten years. This trend has also increased the need for LNO's issued by the DOB. Because of this, the City has formalized the process; however, it is still rather time consuming and expensive. The cost to gather all the documents together and submit the request to the city can be close to $1500.00 and take anywhere from 3-6 months to obtain. At TGI, Title Guarantee Inc., we have the experience and the process to help obtain these LNO's in an efficient and timely manner.
Here is a sample LNO application form: LNO APPLICATION FORM
WHY LETTERS OF NO OBJECTION ARE IMPORTANT
When investing a million dollars in a property, built prior to 1938, that you believe is a legal three family residential dwelling, it is important to obtain substantial proof that your intended use of the property is legal. A tax classification can give you an idea of how usage of property is viewed by the city but the Department of Finance and the Department of Buildings may not always have their records in order and they may not be able to confirm. Obtaining LNO's from the DOB will give you legal confirmation that your property in question can legally be used as intended.
You might be interested to know you can get obtain a LNO for a property that has an existing Certificate of Occupancy. For example, let's say the property has a Certificate of Occupancy stating the property is a two family dwelling. Currently it is being used as a one family dwelling. You can submit for a LNO where the DOB states they do not object to the usage of the property as a one family. It should be noted that if there is any increase in usage to an existing Certificate of Occupancy, such as going from a two family to a three family dwelling, usually requires a submission of plans to the DOB.
For More information on why and how to obtain a LNO, please give us a call.
James D. Gavrity, CEO
TGI, Title Guarantee Inc.