Local Law 97's first penalty season is here. Here is what over-limit condo and co-op boards do now.

Local Law 97 set carbon emissions caps for NYC buildings over 25,000 square feet starting in calendar year 2024. The Department of Buildings on September 15, 2026 reported that 95 percent of covered buildings submitted compliant emissions reports through the DOB BEAM portal. The remaining 5 percent did not. Those buildings face civil penalties of $268 per metric ton of CO2-equivalent above their cap, assessed under NYC Administrative Code §28-320.6.1, processed through the Office of Administrative Trials and Hearings. Penalties have accrued for both 2024 and 2025. The board that does not know its current OATH status should find out today.

What the Department of Buildings just reported.

DOB's September 15 summary covered roughly 50,000 buildings subject to LL97's first compliance period (calendar years 2024-2029). Buildings were required to submit annual emissions reports through the DOB BEAM portal: May 1, 2025 for calendar year 2024, and May 1, 2026 for calendar year 2025. Ninety-five percent of covered buildings submitted compliant reports for both periods. The approximately 2,500 that did not, or that reported emissions above their building-specific cap, are now in the penalty queue.

The cap for each building is calculated from gross floor area and occupancy type under NYC Administrative Code §28-320.3.5. A 100,000-square-foot residential building has a lower per-square-foot cap than a hotel or office building of the same size, reflecting different baseline energy intensities. A building 200 metric tons over its cap owes $53,600 for that year. A building 1,000 metric tons over owes $268,000. Because DOB tracks calendar years independently, a building out of compliance for both 2024 and 2025 faces two separate Notice of Violation proceedings and two separate penalty calculations. Those can combine into a six-figure exposure before any default surcharges.

What a Notice of Violation contains.

When DOB issues an NOV under Local Law 97, it is served on the building's registered managing agent or board contact. The document identifies:

• The building address and tax lot number (BBL)
• The calendar year at issue
• Reported emissions for that year (in metric tons CO2-equivalent)
• The building's cap for that year (in metric tons CO2-equivalent)
• The calculated overage (reported emissions minus cap)
• The civil penalty ($268 multiplied by the tCO2e overage)
• The specific code provision: NYC Administrative Code §28-320.3.7.1
• The OATH docket number assigned to the proceeding
• The 30-calendar-day deadline to file an Answer

The penalty stated on the face of the NOV is the starting calculation, not a fixed number. It can be reduced through a successful Answer or a negotiated stipulation with DOB before the hearing date.

The OATH enforcement process, step by step.

The Office of Administrative Trials and Hearings is the city tribunal that hears DOB enforcement matters, including LL97 penalty proceedings. Once a docket is opened, the sequence runs as follows:

1. DOB serves the NOV on the building's registered contact. The 30-day Answer clock starts on the date of service, not the date the managing agent forwards the document to the board.
2. The respondent files an Answer at OATH within 30 calendar days. An Answer must state a defense: a disputed emissions calculation, a GFE eligibility claim (see below), a claimed exemption, or a request for a reduced-penalty stipulation.
3. If the Answer raises a factual dispute, OATH schedules a hearing before an Administrative Law Judge. Hearings are typically scheduled within 60 to 90 days of the Answer filing date.
4. The ALJ issues a written decision. The penalty can be affirmed at the full amount, reduced, or dismissed if the stated defense is sustained on the record.
5. If no Answer is filed within 30 days, OATH enters a default judgment for the full stated penalty plus a default surcharge.
6. An unpaid judgment is certified to the NYC Department of Finance as a lien against the property. Lien attachment follows the Department of Finance's standard enforcement process, including potential sale to a third-party lien holder.

What happened to Good Faith Effort plans.

LL97 allowed buildings that could not meet the 2024 cap to file a Good Faith Effort (GFE) Decarbonization Plan with DOB, committing to a timeline for reaching compliance. A validated GFE plan could reduce or defer the 2024 penalty. The deadline to submit a verification package confirming that the building was tracking its GFE commitment was May 1, 2026.

That date passed four months ago. Buildings that filed GFE commitments but did not submit their May 2026 verification package no longer have the GFE defense available for 2024 penalty proceedings. A building now receiving an NOV for the 2024 compliance year, having missed the May 1 verification deadline, faces the full §28-320.3.7.1 penalty with no GFE offset.

For 2025, a new GFE window is open. The structure mirrors the 2024 process: a commitment phase followed by a verification deadline. Buildings seeking to limit 2025 penalty exposure should confirm with DOB whether they hold a validated GFE plan and whether they are tracking to the committed emissions trajectory. Missing the 2025 verification deadline will reproduce the same retroactive liability that is now arriving as 2024 NOVs. DOB publishes current GFE deadlines and requirements on the BEAM portal.

Who controls the file has no license.

The NOV is served on whoever the building has registered as its contact with DOB, which is typically the managing agent. The managing agent then coordinates the OATH response: forwarding the NOV to the board, retaining an attorney if needed, gathering the building's energy and emissions data, and filing the Answer on time. The outcome of the proceeding depends heavily on how accurately and promptly the managing agent moves.

Nothing in New York law requires that person to hold a license or any certification. A managing agent overseeing a building's LL97 enforcement file may have no training in building energy law, emissions accounting, or OATH administrative procedure. The board has no statutory basis to verify competence before the managing agent takes control of a time-sensitive penalty proceeding. This is not a hypothetical gap: the same structural absence affected how buildings handled J-51 recertification work and Int. 1015 compliance filings.

S.71, introduced in the NY Senate by Senator Kavanagh, would establish a licensure requirement for managing agents of residential buildings. The bill has no Assembly same-as companion for the 2027 session and has not advanced beyond committee. Until the legislature acts, the board's only protection is direct oversight. Ask your managing agent: Has the NOV been served? What is the OATH docket number? What is the Answer deadline? Has an attorney been retained? Do not accept a summary account. Ask for the documents.

Bottom line.

A building over its 2024 or 2025 LL97 cap has 30 calendar days from NOV service to file an Answer at OATH. Missing that window produces a default judgment, a default surcharge, and a path to a property tax lien. The managing agent running the response is unlicensed and not required to flag the deadline to the board unprompted.

The board needs three pieces of information: whether an NOV has been served, what the Answer deadline is, and whether an attorney is on the file. Those are yes-or-no questions with a specific date attached. If the answers are unclear, the board can check the building's OATH docket status directly through DOB or the OATH portal. The penalty can be contested, reduced, or in some cases dismissed. It cannot be revisited after a default judgment is entered.

Companion resources: LL97 overview · LL97, J-51, and Int. 1015 · How boards use NYCEEC MEG loans · S.71 managing agent licensure · How to write an AG REFB complaint.