When Must ECB Violations Be Cleared for NYC Property Sales? Title Company Guidelines

We are often asked for clarification as to whether violations issued by the Environmental Control Board (ECB) have to be paid and/or cleared of record to allow a Seller to transfer title to a Purchaser free and clear of such ECB Violations.  The answer is not always clear-cut and will depend on how the ECB Violation was issued and/or docketed.   

First, it is important to note that the ECB now operates through the Office of Administrative Trials and Hearings (OATH) .  The ECB, via OATH, issue violations when a property is not in compliance with construction codes or zoning resolutions as set out by the New York City Construction Codes or Zoning Resolution. There are three classes of ECB violations: Class 1 (Immediately Hazardous), Class 2 (Major), and Class 3 (Lesser) and each ECB Violation typically includes a monetary penalty which can accrue interest until paid in full.  Please note that ECB Violations are issued separate and apart from a NYC Department of Building (“DOB”) Violations (a “DOB Violation”) so curing and paying fines associated with the ECB Violations will not clear DOB Violations of record even if they are both related to the same property condition that caused the violations to be issued.

Below is a summary of how we here at Home analyze and determine how a particular ECB Violation affects the property we are insuring (NOTE: we cannot provide advice as to how other Title Companies, and/or their Underwriters, will address and resolved ECB Violation issues). 

1. When the ECB Violation is Docketed in the Judgment Index Directly Against the Property Owner’s Name

 An ECB Violation issued against an individual owner’s exact name is considered an in personam judgment against the individual and automatically attaches to all real property owned by the individual as of the date the ECB Violation is docketed in the judgment index (an “ECB Judgment”).  ECB Judgments will remain enforceable for Eight (8) years from the docket date and these ECB Judgments should appear in Schedule B of your Title Report as a judgment against the owner.  These ECB Judgments must be satisfied by payment of all outstanding penalties and interest at or prior to Closing in order for us to issue a Policy free and clear of the ECB Judgments. 

2. When the ECB Violation is Issued Against the Property Address and Not Docketed Against the Owner’s Name

 ECB Violations can also be issued against a property address and found on the City Pay website https://a836-citypay.nyc.gov/ without specifying a particular individual’s name (or possibly referencing the name of a party other than the owner) (a “Non-Judgment ECB”). These Non-Judgment ECBs are typically shown in the Title Report in the Departmental Section in a standard ECB Address Search.  Non-Judgment ECBs are not considered an in personam judgment against an individual owner unless and until they are ultimately docketed in the judgment index.  

That said, in specific instances, a Non-Judgment ECB can ripen into a Tax Lien against the property in accordance with Local Law 153-2017 if OATH transfers the monetary lien to the NYC Department of Finance (“DOF”).  A link to Local Law 153-2017 is included below which details the types of Non-Judgment ECBs and requirements for OATH to complete transfers to DOF.  Once DOF receives the transferred monetary lien from OATH, DOF will add an assessment charge to the property’s Real Estate Tax account and the current property owner will be responsible for payment. 

Additionally, since Non-Judgment ECBs are filed and searchable by address, Sellers and Purchasers are encouraged, prior to closing, to contact OATH directly to dispute and/or resolve any such Non-Judgment ECBs in accordance with the terms and obligations of their Contract of Sale.

To view the local law click the below link:
https://www.nyc.gov/assets/buildings/local_laws/ll153of2017.pdf