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The Climate Mobilization
Act, passed by the City Council on April 22, 2019, aims to reduce greenhouse gas emissions from NYC buildings and increase their energy efficiency. It has several deadlines for compliance. As of the date of this writing, landlords of buildings larger than 25,000 square feet are required to begin planning retrofits and make improvements. In addition to requiring landlords to install green roofs, the new law also sets standards and requires building owners to install solar panels and other energy-efficient technologies.
As of January
1, 2020, the law will be implemented in full. This will require landlords to purchase or build renewable energy credits, as these credits will be required to meet minimum standards for carbon offsets. But landlords and tenants should note that this law will not impact rents. This legislation also will affect the cost of electricity. This may cause some building owners to raise their rents.
The Climate Mobilization Act will have a profound impact on buildings in New York. Buildings with high energy demands will likely be closely scrutinized by landlords. This will impact the overall report card of the building. In addition, the landlord may be penalized unfairly if the tenants are not in compliance with the new rules. But landlords should not let this discourage them from making green improvements to their buildings.
The CMA mandates building owners to make changes to their properties to become more energy-efficient. This new law requires landlords to invest in retrofitting buildings that are more efficient. It also requires landlords to obtain loans from lenders to help with the costs. While these loans are repaid by the landlord, they are also paid for by the building owner through property tax assessments. Therefore, tenants may want to exclude these payments from their rents in order to reduce their property taxes.
While the CMA
is a landmark law for the city, many landlords and tenants still have to prepare for its implementation. It is expected to impact building owners for decades to come. The law is a major step toward reducing greenhouse gas emissions in New York City. Achieving these goals requires a thorough understanding of the law and the various regulations. The climate Mobilization Act will have a profound impact on building owners and tenants.
While the law mandates building owners to reduce carbon emissions, there are no new rules for tenants. However, landlords and tenants should pay close attention to the operating expense provisions of their leases. Those provisions may have an effect on the lease’s carbon reduction target. So, before signing the lease, consider whether or not the legislation has any financial impact on the building.