How to Clear NYC OATH Violations and Reduce Your Insurance Risk
This article is the second in a series on resolving property violations in New York City. Visit the other articles in this series, How to Clear NYC Property Violations – HPD and How to Clear NYC Property Violations – DOB.
Why OATH Violations Are a Bigger Insurance Risk Than Most Landlords Realize
Building owners often see OATH (NYC Office of Administrative Trials and Hearings) violations as annoyances, and minor ones at that.
Many don’t realize that a series of seemingly small matters can have a big impact on insurance. An underwriter evaluates the cumulative effect of multiple minor violations as an indication that the building may not be well managed. The result can include higher premiums, policy cancellations, or non-renewals.
What OATH Violations Actually Are and Who Issues Them
Building owners in New York City must maintain their properties in safe condition and in compliance with current zoning regulations and construction codes. Failure to do so can result in violations. Open—or uncorrected—violations can prevent an owner from selling, refinancing, or obtaining a new Certificate of Occupancy or Letter of Completion.
The Office of Administrative Trials and Hearings (OATH) is an administrative court that schedules and conducts hearings for violations related to NYC’s “quality of life” laws. As a judicial entity, OATH itself does not issue violations. Respondents may challenge violations at an OATH hearing, and they may face penalties if found in violation.
The most commonly issued violation is the OATH Notice of Violation. Municipal and state agencies issue these violations, including the Department of Buildings (DOB), Department of Sanitation, and Fire Department of New York (FDNY). DOB issues OATH violations when a property does not comply with New York City Construction Codes and/or Zoning Resolution. Owners who receive OATH violations are required to correct the condition and certify the correction to the DOB.
OATH violations fall into three classes:
- Class 1 (Immediately Hazardous)
- Class 2 (Major)
- Class 3 (Lesser)
Building owners have options for resolving violations, depending on the class. Understanding how each strategy affects insurance coverage matters.
Your Three Options for Resolving OATH Violations Without a Hearing
Building owners who resolve an OATH violation without an OATH hearing can save time and money and may also realize insurance benefits. If an insurer’s review uncovers hearings, it may conclude that either the building or the owner is a higher risk. If a violation is upheld during an OATH hearing, it can lead to penalties that may affect insurance coverage and premiums as well.
Keep in mind that owners may be required to disclose unresolved OATH violations when applying for or renewing insurance.
Building owners have three options for resolving OATH violations without a hearing.
- Cure – Zero Penalty. This option is available for Class 3 and most Class 2 violations. The respondent must correct the violating condition(s) and certify correction within 40 days. If the Administrative Enforcement Unit (AEU) accepts the certification, the respondent “admits” to the violation and does not have to appear at the hearing. As a result, no hearing penalty is imposed. From an insurer’s perspective, the building’s record isn’t affected. Note: If an acceptable certificate of correction is not submitted by the “Cure Date” on the violation, the respondent must appear for a scheduled hearing or admit and pay the violation/summons.
- Stipulations. Applicable to Class 3 and selected Class 2 violations, this option involves an admission of guilt and extends compliance time 75 days past the first scheduled hearing date. Respondents may exercise this option by mail (paying half the penalty if accepted before the first hearing date) or at the hearing (paying the OATH-approved hearing penalty). If you do not certify correction within 75 days, the penalty reverts to the original hearing amount. Resolving the violation quickly, rather than taking the full 75 days, can avoid insurance issues.
- Admit by Mail. This option extends to all violations, regardless of severity. Respondents must pay the standard penalty to OATH by the hearing date. No hearing is required, and the penalty is not reduced. Respondents must still certify to the DOB that they corrected the violating conditions. Again, resolving the violation promptly can mitigate insurance issues.
How to Submit a Certification of Corrections and Close the Violation
Building owners, or their representatives, must correct the conditions and submit a Certificate of Correction request online through DOB NOW. In addition, they must submit a notarized statement describing how the violation was corrected, proof of payment of applicable civil penalties, and any supporting documentation (ex. photos, receipts).
This handy NYC DOB user guide offers step-by-step instructions to help building owners navigate the process. Owners with questions can find most answers at the DOB Certificate of Corrections FAQs.
Owners can submit a Certificate of Correction after correcting the violating condition. The hearing and certification processes are separate.
For more information, visit the DOB website. Owners who are new to the process should start with these convenient DOB resources.
How Resolving OATH Violations Strengthens Your Insurance Position
The more a building owner can reduce risk, the more favorably an insurer will evaluate a building. Avoiding OATH violations, or resolving them quickly, can go a long way toward that goal.
For related information that can help building owners resolve other types of NYC violations, see How to Clear NYC HPD Violations and How to Clear NYC DOB Violations.
