How Your Tenant Group Can Use Local Law 79
• The basic purpose of the Tenant Empowerment Act, passed last year as Local Law 79, is to allow tenants in subsidized buildings (specifically, Project-based Section 8 and Post-1973 Mitchell-Lama buildings) certain rights that would enable them to preserve the long-term affordability of their homes.
How Does Local Law 79 Work?
The Process:
. The trigger for invoking Local Law 79 is a notice that indicates that a landlord intends to leave your building's designated affordability program.
If you live in a Project-based Section 8 building, this trigger would be the one-year opt-out notice. If you live in a Mitchell-Lama, this trigger would be the one-year buy-out notice.
. If you receive such notice, your tenant group should make an informed and educated decision about whether or not to invoke, considering all of the options and all of the possible consequences, good and bad, of invoking. There is no general right or wrong decision about invocation; it is dependent on each individual building, situation, and tenant group.
. First, please contact an organizing project that can support your decision! Such projects include citywide groups like Tenants & Neighbors or UHAB, or community-based organizations, like GOLES on the Lower East Side or PACC in Brooklyn.
. In addition to reaching out for organizing support if your group does not already have it, it is important to get in touch with lawyers who are willing to work with you throughout this process.
(Please Note: While organizations like Legal Aid and Legal Services fully support LL79, they cannot necessarily take on your tenant group as a client, due to capacity limitations and organizational restrictions on the average income of a building - your group may have to work to secure the help of a private law firm).
. After you have reached out to organizers and lawyers, your Tenant Association, representing at least sixty percent of the building, must notify your landlord and HPD that you intend to invoke the rights afforded your group under Local Law 79.
Organizers and attorneys can help your group craft letters of notification.
. Under Local Law 79, a landlord is obligated to provide several things to tenants when he or she sends an opt-out or buy-out notice:
1. Tenants should be informed of rights under the law either in the federal notice you receive, or in a separate notice.
2. A landlord should somehow make accessible certain financial documents for the property, as well as recent REAC inspection reports (for HUD-assisted buildings only).
. If these rights are denied, your group should make sure to request this information from the landlord in your letter of invocation.
Please Note: Once you have received an opt-out or buy-out notice from your landlord,
your tenant group has no more than sixty days to invoke Local Law 79.
. The landlord: As soon as the landlord receives the invocation letter, he or she should make all of the financial documents and REAC inspection reports available to the tenant group, if he or she has not already done so.
If the landlord refuses to comply with this provision of Local Law 79, the tenant group has grounds to sue.
. HPD: Within fifteen days of invocation, HPD is required to name a panel of appraisers to determine your building's "fair market value" (because tenants and their designated preservation purchaser cannot buy the building if there is no named value). Within forty-five days of invocation, the appraisal of the building must be done and HPD must make the appraised value of your building public.
If HPD refuses to comply with this provision of Local Law 79, the tenant group has grounds to sue.
. The tenant group: As soon as your tenant group decides to invoke, you must immediately start thinking about models of ownership. Reach out to organizers and experienced tenant leaders to learn about all of the options for ownership structures. As a group you must define your collective goals for the future of your building - i.e. how much involvement does your group want in the day-to-day operation of your building; what are the building issues that most concern the group: affordability, physical conditions, oversight of the management company, etc.?
. If your group comes to the conclusion that you want to work with a preservation partner (a not-for-profit or for-profit developer that is committed to maintaining the building's affordability), you need to research different potential partners and begin reaching out to them.
Please Note: While this process should not be rushed, it does need to happen as expediently as possible. It takes developers time to structure financial deals, and tenants should count on no more than one year for this whole process to take place (you don't want to go past the date of your subsidy expiration without having everything lined up as much as possible). Also, if your tenant group eventually needs to go to court, it strengthens your case if you have a partner who is ready and willing to buy your building.
. It is important that this process is thorough, collaborative, and democratic.
Keep in mind that it is your tenant group's choice how you want to structure the ownership of your building, and whom you want to work with.
. Organizers, attorneys, and developers cannot and should not make these decisions for you.
At the same time, individual tenant leaders cannot make these decisions on their own - there must be a process that is open to all tenants, and the group at large should agree upon all decisions.
Remember, ultimately Local Law 79 is about tenant empowerment.
The law aims to work as a tool for maintaining long-term affordability,
but it also intends to give organized and democratic tenant groups
greater options for the future of their homes!
