NYC’s Certification of No Harassment Program: What Int. 839 A Means for Owners and Developers

By: Joseph Goldsmith, Esq

New York City is on the verge of transforming the Certification of No Harassment (“CONH”) program from a temporary pilot into a permanent feature of the City’s housing and development regulatory system. Int. 839-A was approved by the City Council on August 13, 2026 but has not been signed by the Mayor into law as of the date of this memorandum. This local law takes effect 270 days after it becomes a law.

The most fundamental change is that the Pilot Program becomes permanent. The amendment has direct implications for acquisitions, development schedules, financing, valuation, ownership structures and due diligence. The central development issue to be understood is that a program building does not need a CONH for every alteration. A CONH becomes a development constraint when the owner seeks DOB approval or a permit for a covered category of work. Accordingly, the most useful strategies fall into the following groups: preventing a building from being placed on the program list, obtaining removal when the statute permits it, preserving development rights through timing, and designing lawful construction scopes that do not constitute covered work.

I. How a Building Becomes a Program Building Under Int. 839-A

Int. 839-A makes the former pilot permanent and requires HPD to publish a new program list by April 15, 2027 and every three years thereafter. The list applies to multiple dwellings containing six or more dwelling units. HPD must also update the list at least monthly to add newly qualifying buildings. Importantly, Int. 839-A does not say that HPD must remove buildings monthly merely because the factual condition that caused inclusion later disappears.

A building may qualify because of a Building Qualification Index score indicating significant distress; a qualifying full vacate order or discharge from the Alternative Enforcement Program; a final harassment determination within the preceding 60 months; discharge of a 7-A administrator within the preceding 60 months; common ownership with a building having a recent harassment determination; or common ownership with a building where a CONH was denied or rescinded within the preceding 60 months. For the common ownership provisions, Int. 839-A expressly uses the owner shown on the registration statement filed pursuant to Administrative Code § 27-2097.

II. Strategy 1: Determine Whether the Building Fits an Express Program List Exclusion

Administrative Code § 27-2093.1 excludes several categories of multiple dwellings from the program list. These include a building already subject to another law or zoning provision requiring CONH, a building in an HPD approved rehabilitation or preservation program that qualifies for the statutory exemption, certain buildings containing occupied Mandatory Inclusionary Housing or Voluntary Inclusionary Housing income restricted units, exempt luxury hotels, qualifying rent regulated institutional residences restricted to nonprofit institutional use, government owned buildings, clubhouses, and college or school dormitories.

These exclusions should be reviewed at acquisition and again before a major rehabilitation financing closes. For a distressed building, participation in a qualifying HPD rehabilitation or affordable housing program may have value beyond financing because it can potentially take the building outside the citywide CONH program.

III. Strategy 2: Prevent BQI Inclusion Before the List Is Calculated

The most effective CONH strategy is usually built before an application is filed. Violation history is not merely background evidence. Repeated hazardous and immediately hazardous violations, failures to correct them within the required time, interruptions of heat, hot water, electricity or other essential services, and HPD emergency repair activity can themselves establish a prima facie case of harassment and trigger a presumption of intent. The practical consequence under Int. 839-A is twofold: the same conditions can increase the likelihood of BQI list inclusion and later become the evidentiary basis for denying the CONH.

For buildings likely to qualify through the Building Qualification Index, the best strategy is preventive compliance during the 60 month measurement period. Int. 839-A requires the BQI to be recalculated every three years and limits the score to violations, incidents and actions occurring within the preceding 60 months. The statutory definition permits HPD to consider open and closed hazardous and immediately hazardous Housing Maintenance Code violations, Emergency Repair Program liens and expenses, changes of ownership, and other indicators of distress established by rule.

An owner contemplating redevelopment should therefore treat violation management as entitlement planning. Class B and Class C violations should be investigated, corrected and properly certified promptly. Conditions that could result in HPD emergency repairs should be addressed before HPD incurs charges. Erroneous violations should be challenged rather than allowed to remain in the building history. Existing Chapter 53 rules also treat ownership changes as a BQI factor, so unnecessary transfers of controlling interests should not be undertaken without analyzing their BQI consequences. Because Int. 839-A requires new implementing rules, the precise BQI scoring methodology should be rechecked when HPD promulgates conforming regulations. The cases make clear that owners should also prevent conditions from escalating to the other statutory list triggers. Structural conditions that could result in a full vacate order should be addressed before they become emergencies, and buildings approaching AEP eligibility should be treated as high priority compliance assets. Because a final harassment determination at one property can create common ownership exposure under Int. 839-A, tenant harassment litigation anywhere in the portfolio should be tracked centrally rather than treated as a building specific dispute.

IV. Strategy 3: Audit HPD Registrations Before Common Ownership Creates Portfolio Exposure

Int. 839-A creates a new portfolio risk by adding buildings that share the same owner, as shown on the annual HPD registration statement, with a building having a final harassment determination, CONH denial, or CONH rescission during the applicable 60 month period. Owners with multiple properties should therefore perform a portfolio wide audit of HPD registrations before the new list is created.

If an HPD registration is stale, incorrectly identifies an entity, or fails to reflect a completed bona fide ownership change, it should be corrected. Separate properties that in fact have different owners should be accurately registered that way.

A bona fide sale to an unrelated purchaser can eliminate the factual common ownership relationship that caused a building to qualify. However, Int. 839-A does not contain a general provision requiring HPD to remove a common ownership building from the current list immediately after a sale. The statute requires each new list to include buildings that continue to meet the criteria, which supports a strong argument that a genuinely unrelated purchaser should not remain subject to the common ownership criterion on the next list if no independent basis for inclusion exists. It does not create an express midcycle removal right comparable to the new BQI procedure.

Accordingly, a purchaser of a building listed solely because of common ownership should not price or schedule a development project on the assumption that recording a deed automatically eliminates current CONH status.

V. Strategy 4: Use the New 180 Day Removal Procedure for BQI Buildings

Int. 839-A creates an express removal mechanism for a building added to the program list pursuant to the Building Qualification Index. This procedure is limited to BQI buildings and should not be assumed to apply to buildings listed because of common ownership, a harassment adjudication, a vacate order, AEP history, or a discharged 7-A administrator.

Beginning 180 days after creation of the program list on which the building first appears, the owner may submit both an HPD removal application and a request for dismissal of Housing Maintenance Code violations. HPD must attempt to inspect each dwelling unit and public area as part of the dismissal request reinspection. Certain conditions bar removal, including specified false certification history, an outstanding underlying conditions order, specified open mold, pest, heat, hot water, lead paint, gas or electricity violations, unpaid civil penalties, and unpaid HPD repair charges. Pest violations are treated specially where the owner supplies a compliant integrated pest management plan. The owner should use the first 180 days as a remediation window, not a waiting period: order a complete HPD and DOB violation audit immediately, obtain unit access, clear unpaid penalties and repair charges, cure absolute statutory bars first, and preserve dated photographs, invoices, contractor affidavits, access notices and dismissal records so that the reinspection record is complete when the removal application becomes eligible.

For violations outside those absolute categories, the statute establishes an 80 percent correction standard. At HPD’s determination date, no more than 20 percent of the applicable immediately hazardous violations, hazardous violations, and nonhazardous violations may remain open. HPD must determine removal within 30 days after completion of the required reinspection. Development planning for a BQI building should therefore begin with a violation matrix immediately after listing, with the objective of clearing all absolute bars and substantially more than 80 percent of every remaining violation category before the reinspection.

VI. Strategy 5: File the Actual DOB Construction Document Application Before List Inclusion Where Possible

Int. 839-A preserves one of the most important development timing rules. The local law does not apply to work relating to applications for construction document approval filed with DOB before the building is included on the program list. If an owner knows that a property is at real risk of imminent inclusion, advancing the actual project filing can preserve substantial development rights.

The filing should reflect the genuine contemplated project. Administrative Code § 28-505.1 separately provides that a post approval amendment is subject to CONH where the amendment proposes a change within a covered category of work. A placeholder filing followed by a later material expansion of the project therefore creates risk. The safer approach is to advance design sufficiently that the substantive covered scope is contained in the prelisting construction document application.

VII. Strategy 6: Design the Project Outside the Covered Categories of Work

A program building is not frozen. Administrative Code § 28-505.3 identifies specific covered categories. They include demolition of all or part of the building, subject to a narrow health and safety exception; changes in use or occupancy affecting dwelling units or residential portions; alterations adding or removing kitchens or bathrooms; increases or decreases in dwelling unit count; changes to the layout, configuration, or location of any portion of a dwelling unit; applications for a new or amended Certificate of Occupancy; and additional alteration categories that HPD may prescribe by rule.

Similarly, Int. 839-A adds an express exception for routine cosmetic work and maintenance where the work does not require a permit. This is a narrow but useful clarification. DOB also recognizes categories of ordinary repairs and minor work that do not require permits under Administrative Code § 28-105.4 and 1 RCNY § 101-14. Work solely to make public areas or dwelling unit entrances and interiors accessible to persons with disabilities is excluded within the statutory limits. Repairs, demolition, or other work performed by a City agency or a contractor under a City agency contract are excluded. Work at a building with a currently appointed 7-A administrator is also excepted. In addition, repairs, replacement, modification, or partial demolition constituting the minimum work required to address conditions necessary to rescind an HPD or DOB vacate order are excluded.

This creates a meaningful design lane for rehabilitation work that preserves legal residential use, dwelling unit count, apartment boundaries, kitchen and bathroom locations, and the existing Certificate of Occupancy. Depending on the facts and DOB filing requirements, facade work, roofing, windows, elevators, electrical service, plumbing risers, fire protection, structural repair, common area rehabilitation, mechanical equipment, finishes, cabinetry, flooring, and replacement of building systems may be capable of proceeding without triggering § 28-505.3. The architect should prepare a CONH issue matrix identifying each element of the proposed scope and whether it changes a statutory covered category.

VIII. Strategy 7: Consider Applying for a CONH Before the Development Filing Is Imminent

Under existing 28 RCNY Chapter 53, a granted CONH is effective for 60 months and applies to plan approvals and permit applications for covered work submitted to DOB during that period. Unless conforming rules adopted after Int. 839-A change that duration, an owner with a clean five year history may have a strategic reason to obtain the CONH before final construction financing or before a complicated assemblage is complete. Doing so can convert a future entitlement uncertainty into a known development asset. The opposite timing strategy can be equally important. If diligence identifies a serious but finite incident near the beginning of the 60 month inquiry window, and the project can wait, the owner should model whether postponing the CONH application allows that event to age out of the inquiry period. Filing early merely to create optionality can be counterproductive where the existing record is poor, because the inquiry continues through HPD’s final determination and the application may become nonwithdrawable after a reasonable cause finding.

This strategy should only be used after a preapplication investigation. Filing starts HPD’s formal 60 month harassment inquiry and invites tenant, community and agency participation. If the record is uncertain, an early application can create a denial that itself has serious consequences. The decision should therefore follow a review of litigation, DHCR proceedings, Housing Court history, complaints, service interruptions, buyout communications, access disputes, construction conditions and tenant files for the entire inquiry period.

IX. Strategy 8: Evaluate a Statutory Waiver Before Accepting a Cure

Int. 839-A preserves the statutory waiver mechanism in subdivision i of § 27-2093.1. The waiver is fact specific and is not a general purchaser exemption, but it can be important where harassment occurred before the current owner acquired the building and the owner satisfies the relevant statutory acquisition date or recorded contract conditions, did not participate in or solicit the harassment, and acquired the building in a bona fide transaction not intended to evade CONH. Certain foreclosure and deed in lieu acquisitions have separate protection subject to detailed conditions.

A purchaser of a troubled building should therefore analyze waiver eligibility before assuming that a historical harassment finding necessarily forces a cure agreement. The relationship between buyer and seller matters. HPD may consider whether the transaction is bona fide and may examine relationships between the parties. A genuine third party transaction is much stronger than an affiliate transfer for waiver purposes.

X. Strategy 9: Model the Cure as a Development Cost Rather Than Merely a Penalty

If CONH cannot be obtained or a denial has occurred, the cure agreement remains a development alternative. The cure generally requires the creation of permanently restricted low income housing under a recorded restrictive declaration and regulatory agreement. Int. 839-A continues to prevent the owner from using the cure floor area to satisfy another tax benefit or zoning affordable housing obligation, and public subsidy generally cannot be used for the required cure housing.

For a large redevelopment, the correct analysis is economic. The owner should compare the value of the covered development that becomes available after the cure against the capital cost, permanent rent restriction, lost floor area value, financing implications, and operational burden of the required low income housing. In some projects the cure will destroy feasibility; in others, particularly where the unrestricted portion of the project has substantial upside, it can be rational to treat the cure as an entitlement cost and proceed deliberately rather than spending years litigating a marginal CONH record.

Conclusion

Int. 839 A fundamentally changes the way sophisticated owners should think about CONH. The program becomes permanent, the Building Qualification Index becomes recurring, distressed buildings receive a meaningful remediation mechanism, and routine cosmetic work and maintenance not requiring a permit are excluded. At the same time, the amendment creates a potentially much more consequential portfolio risk by allowing a harassment determination or CONH denial at one building to affect other properties sharing the same registered owner. Those questions can materially change the price, timing and feasibility of a New York City development transaction.

If you have any questions or concerns about your particular situation, please do not hesitate to contact me to discuss, JGoldsmith@Kuckermarino.com

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