Recent Publications

Rent Concession Cases: The Score So Far

Starting in 2020, tenants of various 421a buildings throughout the city where rent concessions have been granted have commenced putative class action litigation asserting that the initial legal regulated rent for each of their apartments is not the lease rent, but is the “net effective rent.” To date, the tenants’ efforts have met with mixed success. In their Rent Regulation column Warren Estis and Jeffrey Turkel analyze five decisions rendered on the subject.

As seen in the New York Law Journal By Warren A. Estis and Jeffrey Turkel November 2, 2021 Suppose a landlord renting up a new 421-a building gives an incoming tenant a two-month rent concession during the fourth and fifth months of an initial two-year lease. The monthly rent recited in the lease is $3,000 per month. Over the course of the 24 months, the tenant will pay a total of $66,000.

The question then arises as to what is the initial legal regulated rent for the apartment. RSC §2521.1(g) states in its entirety:

The initial legal regulated rent for a housing accommodation constructed pursuant to section 421-a of the Real Property Tax Law shall be the initial adjusted monthly rent charged and paid but not higher than the rent approved by HPD pursuant to such section for the housing accommodation or the lawful rent charged and paid on April 1, 1984, whichever is later.

For the landlord in our hypothetical, the calculation of the initial stabilized rent is simple: it is the $3,000 rent the tenant was actually charged and paid. For some tenant advocates, however, the issue is more complex. They claim that the $66,000 the tenant will pay over the two-year lease term, when divided evenly by 24 months, yields an initial stabilized rent of $2,750. They further assert that, to the extent that the landlord has taken subsequent increases over the claimed $3,000 initial rent, tenant has been overcharged and defrauded.

The stakes, at least for landlords, are substantial. In the hypothetical, a $2,750 initial rent is an 8.33% reduction over the $3,000 rent set forth the lease. If the landlord granted that rent concession throughout the building, an 8.33% reduction in the building’s cash flow would be disastrous.

Starting in 2020, tenants of various 421-a buildings throughout the city wherein rent concessions have been granted have commenced putative class action litigation asserting that the initial legal regulated rent for each of their apartments is not the lease rent, but is the “net effective rent,” i.e., the total rent actually paid over the lease term, divided by the number of months in that term.

To date, the tenants’ efforts have met with mixed suc-

cess. The five decisions rendered to date are analyzed below. In the interest of full disclosure, co-author Jeffrey Turkel represents amici curie RSA, CHIP and REBNY in the Chernett, Flynn, and Marantz decisions discussed below.

‘Chernett’

The first case decided was Chernett v. Spruce 1209, LLC, 2021 WL 1253807 (Sup. Ct. New York County). There, the tenants of 1209 DeKalb Avenue in Brooklyn, a 421-a building, commenced a class action claiming that the landlord had engaged in fraudulent scheme to evade the Rent Stabilization Law by registering as the initial stabilized rent the lease rent, rather than the “net effective rent.” They also argued that the rent concession was merely a disguised preferential rent, and that the “net effective rent” figure should govern all future increases with respect to any tenant who received the concession.

The landlord moved to dismiss, raising two primary arguments. The landlord first cited Matter of Century Operating Corp. v. Popolizio, 60 NY2d 483 (1983), where the complaining tenant alleged that the two-month rent concession in his initial lease should be carried forward in each renewal. The Court of Appeals rejected that argument, focusing on the actual language of the rent concession rider itself:

The explicit terms of the rider, including that the tenant ‘shall not be required to pay rent for the two months period commencing on the date on which possession of the apartment is given or the apartment is available for occupancy’, limit the rent concession to the commencement of the original vacancy lease. The terms ‘possession…is given’ and ‘available occupancy’ have no rational relation to a renewal lease, where the tenant is already in possession and occupancy of the apartment. The rider must be read ‘in the light of the circumstances existing at its making’ (Becker v. Frasse & Co., 255 NY10, 14), and examination of the language of the rider as a whole confirms that the two-month rent concession is tied to the other rider provisions concerning the possibility that building construction would not be complete by the beginning of the specified term. The concession under consideration, fixed as it was to the giving of possession and assumption of occupancy in the uncertainty of building completion, cannot be construed to carry forward to renewal leases.

60 NY2d at 488-89.

The landlord also focused on DHCR’s Fact Sheet #40 (rev. January 2014), wherein DHCR wrote:

Concessions

There are two types of rent concessions. One is a concession for specific months, as for example, where the lease provides that the tenant will not have to pay rent for one or more specified months during the lease term. This type of concession is not considered a preferential rent.

The other type is a prorated concession, where the dollar value of the rent-free month(s) is prorated over the entire term of the lease and not tied to a specific month or months. A prorated concession is really the same as a preferential rent and will be treated in the same manner.

In Chernett, Supreme Court (Bluth, J.) denied the landlord’s motion to dismiss and rejected the landlord’s reliance on both DHCR Fact Sheet #40 and Popolizio:

The Court…questions the utility of [DHCR Fact Sheet #40] to the instant circumstances–there is no reason offered for why these two types of concessions should be treated differently when, in practice, they are functionally the same exact thing.

In Popolizio, the Court of Appeals rejected a tenant’s claim that a two-month rent concession should apply to the calculation of his rent for subsequent leases for his rent-stabilized apartment where the concession was given for construction. That case does not compel dismissal of the instant action; this is not a situation where plaintiffs allege there was a one-time concession for construction. Rather, plaintiffs point to the suspected use of construction concessions long after construction was completed.

Where Are the Landlords and Tenants of New York City Headed?

Unquestionably, a simple criminal charge for a minor offense should not permit a landlord to utilize that fact to discriminate against a prospective tenant. But there is a difference between nonviolent petty offenses and felonious assault or rape.

As seen in the New York Law Journal By Bradley S. Silverbush October 26, 2021 Recently, a highly respected adversary of mine reposted an article entitled “Landlords Hate Rent Control Because It’s Good for the Rest of Us.” After reading it, all I could do was to shake my head.

For me, that title reflects an oversimplification of a very complex problem and underscores (if not perpetuates) a common myth: that there can be no such thing as a good landlord/tenant relationship. It seems that I am always reading about efforts to hamstring owners’ abilities to improve their property or, God forbid, increase their rent rolls.

In fact, some of the more recent “radical” rent regulations (e.g., the complete overhaul of the laws pertaining to individual apartment improvements and the resulting limitation of rent increases a landlord can obtain) have had negative consequences for landlords and tenants alike. As a result of that change, many owners are unable to afford to effectuate improvements to their apartments (because of the elimination of their ability to recover the cost of the improvement). The result is that this contributes to a decline in the quality of the existing housing stock.

The statement in the referenced article, that “if anything, landlords underestimate the threat of rent control,” underscores the depth of the misconception. In fact, a study by the Brookings Institute (a nonprofit public policy organization base in DC, whose “mission is to conduct in-depth research that leads to new ideas for solving problems facing society at the local, national and global level”) concluded as follows:

“Rent control appears to help affordability in the short run for current tenants, but in the long-run decreases affordability, fuels gentrification, and creates negative externalities on the surrounding neighborhood. These results highlight that forcing landlords to provide insurance to tenants against rent increases can ultimately be counterproductive. If society desires to provide social insurance against rent increases, it may be less distortionary to offer this subsidy in the form of a government subsidy or tax credit. This would remove landlords’ incentives to decrease the housing supply and could provide households with the insurance they desire. A point of future research would be to de-

sign an optimal social insurance program to insure renters against large rent increases.”

As an attorney who represents owners, cooperative corporations, and yes, tenants, too, I can attest to that which you already know, and that is that there are no simple solutions; the issues are complex. But the suggestion that application of doctrines intended to further restrict owners’ rights will somehow solve those problems fails to take into account the complexities and realities of the situation. Indeed, basic economics confirms that it is impossible for landlords to continue to provide services (let alone incur the required expenses associated with actually improving their buildings) without sufficient income to do so. While rent regulations are intended to provide affordable rental housing, it is apparent that overly strict regulations contribute to the decay of housing stock because of the very situation described; if owners cannot recoup the cost of the investment required for improvements, where does that leave any of us?

How is it that the current legislative efforts do not seem to grasp these basic economic considerations? The answer appears to suggest that the prevailing ideology bears no relationship to reality.

Case in point? The New York City Council’s proposal known as the “Fair Chance for Housing Act,” a Local Law to amend the Administrative Code of the City of New York, in relation to prohibiting housing discrimination on the basis of arrest or criminal record. The bill, Intro No. 2047, would prohibit housing discrimination in rentals, leases, subleases, or occupancy agreements in New York City, on the basis of arrest or criminal record. Landlords and real estate brokers would be prohibited from inquiring about criminal record information at any stage in the lease application process.

The NYC Commission on Human Rights has updated their website to reflect a similar provision added to the New York City Human Rights Laws by Local Law 4 of 2021 (effective July 29, 2021); this bill prohibits employers from asking on application forms whether the applicant has a criminal record or any open criminal cases. In like fashion, Intro No. 2047 seeks to compel landlords to waive any right they may have had to conduct a criminal background check. There may certainly be some legitimate rationale for seeking such a change in the law.

I imagine that if one is a prospective tenant who had a minor non-violent brush with the law ages ago, the proposal sounds reasonable and reassuring because a prospective landlord cannot use that alleged infraction of the law to deny one’s application. But, if you are the parent of a young child, wouldn’t you want to feel safe in the knowledge that the landlord conducted a background check before renting the next-door apartment to some convicted rapist or serial killer? After all, isn’t that part of the point behind the NYS Division of Criminal Justice Services (“DCJS”) Sex Offender Registry?

Remember “Megan’s Law?” Named after seven-yearold Megan Kanka, Megan’s Law required convicted sex offenders to register with the state and provided parents and other concerned members of the community with access to “lifesaving information.” In fact, the DCJS is responsible for maintaining the New York State Sex Offender Registry, under which registered sex offenders are assigned a risk level by judge after a court hearing: Level 1 (low risk of re-offense); Level 2 (medium risk of re-offense), and Level 3 (high risk of re-offense). While only Level 2 and Level 3 sex offenders are included in their online directory, did you know that the state’s NY-ALERT system can notify you whenever a Level 2 or Level 3 sex offender listed in the online directory moves, and you can even sign up for alerts! The NY-ALERT system includes the following types of notifications: “severe weather, transportation, AMBER and missing children, consumer protection, public health and sex offender re-location.”

If NYS passed legislation to require sex offenders to be registered and provided a data base for anyone to track their location, they must have thought it a good thing. Should the NYC Council forbid an owner from making a similar inquiry in connection with a lease application? Under current NYS law, a sex offender who is under parole or probation supervision may be limited from living within 1,000 feet of a school or other facility caring for children.

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The Extension of NY’s Eviction Moratorium: An Analysis

In their Landlord-Tenant column, Warren Estis and Alexander Lycoyannis discuss the extension of New York’s eviction moratorium which includes a provision for owners to challenge tenants’ assertions of COVIDrelated financial hardship.

As seen in the New York Law Journal By Warren A. Estis and Alexander Lycoyannis October 5, 2021 On Sept. 2, 2021, Governor Kathy Hochul signed into law an extension of New York’s commercial and residential eviction moratoriums through Jan. 15, 2022 (the “moratorium extension”). The moratorium extension features a new mechanism by which owners can challenge tenants’ assertions of COVID-related financial hardship, which was added to comply with a recent U.S Supreme Court ruling.

On paper, this procedure gives owners a new path forward in many eviction proceedings; however, it remains to be seen whether, as a result, an appreciable number of eviction proceedings actually move forward between now and early next year.

The moratorium extension essentially continues the statutory scheme that was in place through Aug. 31 (see our April 7, 2021 column, “Eviction Moratoriums: A Legislative Update”). As before, the applicable hardship declaration form (whether commercial or residential) must be included with every written notice required to be served prior to the commencement of an eviction proceeding as well as with every initiating pleading served upon a tenant.

In order to commence an eviction proceeding, an owner must file an affidavit of service demonstrating that it served a hardship declaration and attesting that either (1) at the time of the filing, the owner did not receive a completed hardship declaration from the tenant, or (2) the tenant returned the completed hardship declaration but is intentionally damaging the property or engaging in behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes a substantial safety hazard to others, with a specific description of the behavior alleged.

Now, however, the moratorium extension adds another basis for an owner to commence an eviction proceeding where the tenant returns a hardship declaration: where the owner “believes in good faith that the hardship certified in the hardship declaration does not exist.”

As a general matter, where a tenant returns a signed hardship declaration, the eviction proceeding will be stayed until Jan. 15, 2022, which stay will continue “unless the court finds the [tenant’s] hardship claim invalid.” An owner can challenge a tenant’s hardship

declaration by making a motion on notice “attesting a good faith belief that the [tenant] has not experienced a hardship,” whereupon “the court shall grant a hearing to determine whether to find the respondent’s or defendant’s hardship claim invalid” (emphasis supplied).

In other words, an owner making the required attestation is now entitled to a hearing to test the tenant’s hardship claims. This new right is a direct result of the recent ruling in Chrysafis et al. v Marks, 594 U.S. ____ (2021), in which the U.S. Supreme Court held that a tenant’s ability to stay eviction proceedings by unilaterally declaring a COVID hardship violated owners’ due process rights.

In the residential context, the moratorium extension defines “hardship” very broadly as either:

“(a) an inability to pay rent or other financial obligations due in full pursuant to a lease or rental agreement or obtain alternative suitable permanent housing due to one or more of the following reasons where public assistance, including unemployment insurance, pandemic unemployment assistance, disability insurance, or paid family leave, does not fully make up for the loss of household income or increase expenses:

(i) a significant loss of household income during the COVID-19 pandemic; or

(ii) increase in necessary out-of-pocket expenses related to performance of essential work or related to health impacts during the COVID-19 pandemic; or

(iii) childcare responsibilities or responsibilities to care for an elderly, disabled, or sick family member during the COVID-19 pandemic have negatively affected the ability of the tenant or a household member to obtain meaningful employment or earn income; or

(iv) increased necessary out-of-pocket expenses; or

(v) moving expenses and related difficulty in securing alternative housing make it a hardship to relocate to another residence during the COVID-19 pandemic; or

(vi) other circumstances related to the COVID-19 pandemic have significantly reduced household income or significantly increased expenses;”

—or—

“(b) an inability to vacate the premises and move into new permanent housing because doing so would pose a significant risk of severe illness or death from COVID-19 that a tenant or household member would face due to being over the age of sixty-five, having a disability or having an underlying medical condition, which may include but is not limited to being immunocompromised.”

A “hardship” alleged by a commercial tenant under the moratorium extension exists where:

“[it] is unable to pay the rent in full or other financial obligations under the lease in full or obtain an alternative suitable commercial property because of one or more of the following reasons and any public assistance the business has received since the start of the COVID-19 pandemic has not fully made up for the business’s loss of revenue or increased expenses:

Significant loss of revenue during the COVID-19 pandemic; or Significant increase in necessary expenses related to providing personal protective equipment to employees or purchasing and installing other protective equipment to prevent the transmission of COVID-19 within the business; or Moving expenses and difficulty in securing an alternative commercial property make it a hardship for the business to relocate to another location during the COVID-19 pandemic.” If the court finds the tenant’s hardship claim valid after a hearing, the court shall grant or continue the stay through Jan. 15, 2022. In residential eviction proceedings, the court is also required to “direct, if the respondent appears to be eligible and has not yet applied, that the parties apply to the [Emergency Rental Assistance Program [ERAP]], so long as [ERAP is] accepting applications.”

If the court finds the tenant’s hardship claim invalid after the hearing, “the proceedings shall continue to a determination on the merits.”

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What Happens When an Apartment Is Vacant On the Base Date?

The base date rent for purposes of determining a rent overcharge complaint is generally the rent charged to the tenant on the date four years prior to the tenant’s overcharge claim. But what happens if the apartment was temporarily exempt or vacant on the base date? The answer to this has taken various twists and turns, including a new twist introduced in Connors v. Kushner Companies, which Warren Estis and Jeffrey Turkel discuss here in their Rent Stabilization column.

As seen in the New York Law Journal By Warren A. Estis and Jeffrey Turkel August 31, 2021 The base date rent for purposes of determining a rent overcharge complaint under the pre-HSTPA version of the RSL is generally the rent charged to and paid by the tenant on the date four years prior to the tenant’s overcharge claim. But what happens if the apartment was temporarily exempt or vacant on the base date?

The answer to this question has taken various twists and turns over the years, including a new twist introduced in Connors v. Kushner Companies, LLC, 2021 WL 3468142 (Sup Ct, Kings County, August 6, 2021), which is discussed below.

DHCR’s Initial Policy

As of 1997, RSL §26-516(a) provided as follows:

…no determination of an overcharge and no award or calculation of an award of the amount of an overcharge may be used based upon an overcharge having occurred more than four years before the complaint is filed.

This paragraph shall preclude examination of the rental history of the housing accommodation prior to the fouryear period preceding the filing of a complaint pursuant to this subdivision.

Because the statute did not state what happens when an apartment is vacant or temporarily exempt on the base date, DHCR stepped into the breach. In an Oct. 14, 1998 prior opinion letter, DHCR’s counsel wrote:

With reference to the ‘renovated’ unit, you state that the unit was last rented through March 31, 1992 at $700 per month. Thereafter, it has been registered as exempt due to owner occupancy. Where the period of temporary exemption has been four years or more, a ‘first rent,’ negotiated between owner and tenant, subject to subsequent guidelines and other lawful increases (in compliance with registration requirements), would be recognized by DHCR. The former rent, statutory vacancy increase, and cost of new equipment and improvements are not relevant. Based on a ‘first rent’ of $2,000 or more per month, the apartment would be considered deregulated under high-rent vacancy decontrol. Because of the length of the period of temporary exemption, DHCR would be precluded, in the event of an overcharge complaint filed

by the new tenant, from examining the rental history prior thereto. Rent Stabilization Law Section 26-516a, as amended by the Rent Regulation Reform Act of 1997, ‘RRRA-97,’ precludes examination by the DHCR of the rental history of the housing accommodation for the period prior to four years preceding the filing of an overcharge complaint. (italics supplied).

In 2000, DHCR codified this policy in RSC §2526.1(a) (3)(iii). That section, in effect until January of 2014, stated in relevant part:

Where a housing accommodation is vacant or temporarily exempt from regulation pursuant to section 2520.11 of this Title on the base date, the legal regulated rent shall be the rent agreed to by the owner and the first rent stabilized tenant taking occupancy after such vacancy or temporary exemption, and reserved in a lease or rental agreement… (italics supplied).

The words “first rent stabilized tenant” in the regulation, as discussed below, would later prove highly significant.

In accord with its 1998 prior opinion letter, DHCR began issuing orders holding that where an apartment was vacant or temporarily exempt on the base date, the apartment would be deemed deregulated where the rent charged to the first tenant thereafter exceeded the statutory threshold. DHCR issued its first such order on Jan. 15, 2003, which was thereafter challenged in PetitSmith v. New York State Div. of Hous. & Community Renewal, Sup Ct, NY County Index No. 104795/03 [n.o.r.].

In Petit-Smith, the apartment was vacant on the base date, and the incoming tenant paid a market rent of $2,050 per month. Citing RSC §2526.1(a)(3)(iii), DHCR ruled that the apartment was luxury deregulated. In an Oct. 7, 2003 decision, Justice Sheila Abdus-Salaam, thereafter an Associate Judge of the Court of Appeals, affirmed DHCR’s ruling in all respects.

DHCR next implemented this policy in Matter of Bryk, DHCR Adm. Rev. Dckt. No. RK-210057-RT, issued Dec. 29, 2003: Code provides in pertinent part that where a housing accommodation is vacant on the base date, the legal regulated rent shall be the rent agreed to by the owner and the first rent stabilized tenant taking occupancy after such vacancy, and reserved in a lease or rental agreement.

In the instant case, the record reflects that the tenant filed the subject complaint on December 23, 2002 so that the base date is December 23, 1998. The record, including the affidavit from prior occupant Collora, reflects that the subject apartment was vacant on the base rent date. The record further reflects that the tenant herein was the first tenant to occupy the subject apartment after Collora vacated. Accordingly, the legal rent is the first rent charged the tenant herein or $2,500.00. Since that amount is over $2,000.00, the Rent Administrator correctly concluded that the subject apartment is exempt from rent regulation pursuant to Section 2520.11(r)(4) of the Rent Stabilization Code. (italics supplied).

DHCR thereafter issued several similar orders, the last being Matter of Montesinos, DHCR Adm. Rev. Dckt. No. XG-410078-RT, issued Jan. 22, 2000.

The Courts Intervene

In 2012, the First Department overruled DHCR’s policy in Gordon v. 305 Riverside Drive Corp., 93 AD3d 590 (1st Dept 2012). The court held that although RSC 2526.1(a)(3)(iii) authorized a landlord to charge a ‘first rent’ to the incoming tenant after four or more years of vacancy or temporary exemption, the regulation, contrary to DHCR’s interpretation, required that the apartment remain stabilized:

Defendant argues that even if the base date is March 11, 2006, the legal regulated rent should still be $3,095 because the apartment was vacant on that date. In support, defendant points to Rent Stabilization Code (9 NYCRR) section 2526.1(a)(3) (iii), which provides that ‘[w]here the housing accommodation is vacant… on the base date, the legal regulated rent shall be the rent agreed to by the owner and the first rent-stabilized tenant taking occupancy after such vacancy…, and reserved in a lease or rental agreement.’

C-PACE positioned for widespread use in NYC as environmental regulation deadlines approach

As seen in the New York Real Estate Journal By Stefanie M. Graham August 24, 2021 A landmark $89 million Commercial Property Assessed Clean Energy (C-PACE) loan–the first in New York City and the largest ever completed–may well signal a significant uptick in this form of financing.

The NYC Accelerator, which administers the city’s C-PACE program, is helping Nightingale Properties and Wafra Capital Partners fund energy efficiency upgrades for most of the 1.2 million s/f former Citibank building at 111 Wall St.

Since debuting in California in 2007, the once-obscure, low-interest, 10- to 30-year C-PACE loan structure, which property owners pay back via annual property tax assessments, has grown to support more than $800 million in projects as of 2019. Such financing assists building owners in covering the upfront costs for energy efficiency and renewable energy upgrades.

C-PACE loans are poised to catch on in New York City as building owners seek to meet a growing number of regulatory benchmarks. Under Local Law 97, one of 10 bills in the city’s sweeping 2019 Climate Mobilization Act, the owners of more than 50,000 of the city’s larger buildings face multi-million-dollar fines if they don’t meet stringent carbon cap requirements beginning in 2024.

Like LL97, New York State’s Climate Leadership and Community Protection Act, also enacted in 2019 and dubbed the most ambitious climate law in America, has a long list of mandates. Among them is a statewide requirement to reduce greenhouse gases by 85% by 2050 compared with 1990 levels.

C-PACE loans are a likely mechanism to help city building owners achieve compliance. The improvements to the 25-story 111 Wall St. tower, including new HVAC, mechanical, electrical and plumbing systems, will allow the 53-year-old building’s owner to avoid $750,000 per year in LL97 fines alone, according to the mayor’s office. The retrofit is also expected to save $2.5 million in annual energy costs.

governments pass legislation enabling various flexible residential and commercial PACE financing deals, with some programs run by local governments and others administered by third parties, and the programs have a variety of eligible technologies and Savings to Investment Ratio (SIR) and Loan to Value (LTV) requirements.

Thirty-seven states and Washington, D.C. have enabled C-PACE deals since 2007 when Berkley, California’s City Council pioneered the legal structure so homeowners could pay for solar systems over 20 years with an assessment charge on their tax bills.

But C-PACE programs are only actively used by building owners in 26 states and D.C. In New York City, the 111 Wall St. C-PACE deal was the first since the city enabled the loans in 2019, and few know that New York’s Legislature created its first iteration of C-PACE in 2009.

Several types of financing can back C-PACE, including debt or loans (the most common), leases and other arrangements. There is some debate over whether or not these loans can be treated as off-balance sheet operating expenses given their status as property tax assessments.

Another open question: Will senior lenders get on board? C-PACE financing takes priority over senior lenders, and getting their consent can be challenging. But lenders and other real estate players are increasingly likely to use C-PACE as they realize its benefits.

C-PACE can be layered with various forms of economic development financing, including historic and new market tax credits. C-PACE interest rates, typically around 5 to 6%, make the loans exponentially cheaper than mezzanine financing, and C-PACE payments cannot be accelerated by defaults.

With a seemingly endless list of potential commercial and industrial clients, C-PACE could grow far larger than EB-5 financing, the post-recession cash-for-visa program that facilitated projects like Hudson Yards and Atlantic Yards. Those wondering about C-PACE’s potential in New York need only look to the example set at 111 Wall Street.

Rosenberg & Estis, one of New York City’s leading real estate law firms, facilitated the 111 Wall St. C-PACE funding on behalf of the building’s owners.