Mortgage Lender Not Responsible for Building Violations

DOB issued six violation notices to landlord's mortgage lender for work done without permits and illegal alteration of a three-family dwelling into SRO units. The lender claimed that it wasn't responsible for correcting the violations. DOB argued that the lender was considered an owner responsible under Building Code Section 28-301.1 and Real Property Actions and Proceedings Law (RPAPL) Section 1307(1). The ALJ ruled for the lender and dismissed the violations. DOB appealed and lost. Although the 2008 Building Code definition of "owner" was broader than the previous definition, the lender had no control over the building despite foreclosure proceedings against landlord, who remained the sole title holder. The lender had no legal rights over the title holder by which it could enter and make repairs. Its limited connection to the building was as a lender of money to landlord. It never gained possession or became a trustee to oversee the premises. The lender also had no obligation under RPAPL Section 1307(1) since the building was neither vacant nor abandoned by landlord.

The Bank of New York Mellon Corporation: ECB App. No. 1100794 (12/15/11) [6-pg. doc.]