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Adam Leitman Bailey, P.C. Due Diligence Report 8

DUE DILIGENCE REPORT

Prepared By

Adam Leitman Bailey, P.C.

120 Broadway, Seventeenth Floor

New York, New York 10271

(212) 825-0365

alblaw.wpengine.com

July 31, 2015

Introduction

This report includes our due diligence research findings and analysis of the building located at [redacted].  As previously reported, we ruled out the need for rent regulatory due diligence, since the building is properly used as a church in compliance with the Certificate of Occupancy filed at the Department of Buildings and since the only person residing at the building is the pastor of the church, Reverend Wayland Williams, Jr.  So long as the building is delivered vacant at closing, we do not see any issues of concern from a landlord-tenant law perspective.

The due diligence research reported here is based on court investigations and our review of the status of any open violations issued against the building by the Department of Housing Preservation and Development of the City of New York and the New York City Department of Buildings.

In court investigations, we searched the files of the Supreme Court of the State of New York, New York County, the Civil Court of the City of New York and the Housing Court of the City of New York for past and pending litigation with respect to the building,[redacted].  Our court investigations also included a review of any judgments and liens held against the property.

       Our investigations produced the following results.

Overview of the Building

The building is properly used as a church and consists of four stories.  The Certificate of Occupancy issued by the Department of Buildings on or about April 21, 1977, authorizes the cellar level for use as a boiler room and storage, the 1^st floor as a church, the 2^nd floor as a kitchen and accessory dining room and the 3^rd level as “vacant”.  We recommend you walk through the building, if you have not already, to confirm that the actual use of each floor is consistent with the use allowed by the Certificate of Occupancy for the building.  We provide a copy of the Certificate of Occupancy with this report.

Chain of Title Issue Identified

A correction deed for the property located at [redacted] is recorded under the block and lot for this building.  Jack Erdos, Esq., is already investigating and working with a title company to deal with this obvious chain of title issue.  We provide a copy of the St. James Place deed as well as the deed for this property together with this report for your reference.

Please note that our due diligence research does not usually deal with title issues like the one identified here.  Since we review the ACRIS filings for the building to identify the party names to run in court investigations, we often uncover chain of title issue such as the one identified here.  But please be advised that our research is not a substitute for a full title report that you may choose to run even at this stage of the deal.     

New York City Violations Issued Against the Building

NYC Department of Buildings (DOB)

The DOB Property Profile Overview for this building is provided below.

[Redacted]

DOB Violations

As you can see on the above Property Profile Overview, there are three open  DOB violations and one open Environmental Control Board violation.  Your contract negotiations should ensure that either these violations be corrected and certified before the DOB or a credit issued to cover your exposure to fines, if any, and the costs to correct the violations.  For your ready reference, details on the four open violations are below.

Department of Housing Preservation and Development of the City of New York (“HPD”)

We provide the HPD Building Registration Summary Report for the building below.  Since the building is operated as a church and so is not a multiple dwelling as defined by the Housing Maintenance Code, it does not need to be registered with HPD annually.  Nonetheless, we note that there are no violations considered open by HPD.

[Redacted]

One and two family properties are not required to register with HPD unless neither the property owner nor family members of the owner live on the premises. Owners of these properties can register after obtaining a Registration Number. For more information on how to obtain a Registration Number and register, please return to the HPD home page and search for Property Registration.

Property Shark Report

We provide a copy of the Property Shark Report for the building together with this report.  It includes information pertaining to the neighborhood, ownership, property tax assessment, zoning and size.

Court Investigations

Housing and Civil Court Cases

We ran party name and building address searches on the databases of the Housing and Civil Court.  The party names we searched are [redacted] the person who holds the St. James Place deed which is erroneously recorded against this building.  We did not find any past or pending litigation in Housing and Civil Court.   

Supreme Court

We ran the same party name and building address searches on the databases of the Supreme Court of the State of New York, New York County, and did not find any past or present litigation involving the parties or the building.

We ran a judgment and lien search by block and lot number and found one sidewalk lien issued on September 21, 1993.  Generally, a sidewalk lien is placed against a property by the City of New York after it undertakes to cure a sidewalk condition that was not timely cured by the property owner.  That lien was cancelled on August 9, 1994.  We did not find any other judgments or liens against the building.  Screenshots of details on the 1993 sidewalk lien are provided with this report.

As you know, customarily prior to closing a title search is run on the property which provides a more complete and up to date picture of the liens held against the property.

Conclusion

Only one regulatory issue stands out in this investigation:  the failure to file a boiler inspection. This can be a red flag for the maintenance of the boiler and we recommend that you look into this carefully.  The issue with regard to exterior walls, we have to assume, already came to your attention when you looked at the building yourself.

There are no other issues that come to mind and there is nothing particular noteworthy about this property, from a regulatory point of view.

Due-Diligence-Cover-Report.pdf

• Jack Erdos
• Carolyn Z. Rualo
• Dov A Treiman

• Due Diligence and Transactional Risk Assessment of Multi-Family Dwellings
• Purchase & Sale of Multi-Family Dwellings & Buildings