NYC’S PUBLIC ENEMY NUMBER ONE : BUSINESS OWNERS AND INVESTORS

So you read a lot about government waste and insanity, but as an attorney, you get to experience it first hand on nearly a daily basis. Here’s an example.

I received a phone call today - February 16th, 2011 - from an attorney at HPD which was a response to my letter from November 19th, 2010. It only took them two (2) months to respond. Bravo. I had written them at that time regarding a client who had closed on his purchase of a house the day before to inquire about the issuance of a Certificate of No Harassment and whether he would have to apply for a new one. A Certificate is required in order to evict a tenant of a building classified as a Single Room Occupancy (“SRO”). An investigation is conducted and the Tenants are consulted. I had one case a few years ago where the Tenant, who seemed to be suffering from schizophrenia, claimed that he had very expensive electronic equipment and scientific journals in his apartment that he wanted compensation for. His figure was $150,000. The HPD employee took the tenant’s claims seriously and recommended to my client that he make an offer.

You could call the whole process “extortion”, but that would be unfair and vicious to run of the mill extortionists. Indeed, the whole concept is ridiculous and contrary to rational thought. On the one hand you have a property owner who paid a significant amount of money to buy a building and who should be entitled to a fair return on his investment. If you wanted to devise a system which absolutely guaranteed rewarding people for laziness and penalizing others for hard work and initiative, then this is it. This is often what passes for law in New York and squarely in the cross-hairs, pardon the term, are hard working business owners and investors. Indeed, it seems as if the whole system is rigged to penalize people for engaging in hard work and trying to operate a profitable business or enterprise.

My client wants to improve the building, and hence the area. He would perform construction on the building which would provide employment opportunities for various individuals and companies. He would do this with the thought of making a profit, of course, but that seems to be sort of what capitalism is about.

Finishing up the story, I was told that my client would have to file a whole new application to obtain a Certificate of No Harassment and that he could not use the old owner's application. I was also told that if he failed to do so in the near future (I have no idea how many decades that constitutes in HPD time), that they would go ahead with the former owner's application and may give him a Certificate.

I questioned this procedure. HPD is going to continue with the application of a former owner when they have been advised that they no longer own the building. Then they may even give this former owner a Certificate to permit them to evict the tenants. Of course, as the old owner is just that, no longer an owner, they don't have standing to evict anyone nor the desire to do so. But, those are HPD rules, logic and common sense be damned.

Getting back to government agencies that seem to affirmatively and aggressively attempt to impede businesses, there are two more to discuss. That is after leaving out the confiscatory taxes and mindless rules and regulations, business owners run into other roadblocks such as the NYC Department of Consumer Affairs and the Division of Human Rights. Let's start with a look at the latter agency.

Without a modicum of proof, a person can file a complaint with the Division of Human Rights for perceived discrimination. I had a case that I handled in 2009 where after reading the complainant’s affidavit, I couldn’t figure out exactly what the alleged discrimination was. I called up the Division and asked for clarification and I was told that they didn’t know either. They asked the Complainant for clarification and he wasn’t able to articulate what the discrimination was that he was complaining about. He just didn’t like the fact that he was denied from purchasing a house and he thought that the broker discriminated against him. My client’s defense was that he had shown this gentleman, and his family, this particular house 8 times. Every time he asked him for proof regarding his financial ability, he made promises to produce documentation at a later date, but consistently failed to do so. When I brought this fact up in my response, the HPD worker advised me that the Complainant had been unemployed for the past decade. The complaint was eventually dismissed.

I had another case with them recently and out of curiosity asked a worker what powers the Division had if there was an adverse ruling. I was told that they had no enforcement powers whatsoever. Notwithstanding their utter impotence, they operate a large bureaucracy.

So, in essence, you have a government agency which prosecutes frivolous, and sometimes incoherent complaints against businesses with no power to do anything if they find that discrimination has indeed occurred. You would think that a bureaucrat with a single digit iq in a third world country would come up with this kind of system. No. It’s NYC. And this is one reason that you pay such high taxes.

Of course, it’s worse. You have the Department of Consumer Affairs who I have found to be extremely anti-business. I would hesitate to say that they are pro-consumer as it would imply that they have some legitimate function. They aren’t and they don’t. They are just anti-business to the core. I have had a few cases with them over the years, but won’t handle them anymore as it is just a losing proposition. It’s hard to explain to a client how rigged the system is and how they have no chance of prevailing.

I could finish on an upbeat note and remark that it could be worse. Frankly, I am not sure how.