Decarbonize NY - The Local Law 97 Filing Deadline Has Passed - Here’s What You Need to Know
News, thoughts and tools to guide property owners and managers, lenders, developers and
sustainability professionals in their pursuit of a greener New York.
August 29, 2026, was the final deadline for covered buildings to submit their annual compliance reports to the NYC Department of Buildings (DOB) via the DOB NOW portal. Now that the filing window has closed, managers of every covered property need to think about how to move forward based on where they stand today:
1. You Filed and You're Under Your Cap
You're in good company—the DOB reports that roughly 93% of covered private properties met their filing obligations, and a third-party analysis indicates that about 91% of covered properties currently fall below their assigned 2024–2029 emissions thresholds.
However, compliance is an ongoing requirement, not a one-time event. Under Article 320, greenhouse gas limits drop dramatically in 2030 with the goal of realizing a 40% reduction in citywide emissions. According to current estimates, more than half of covered buildings will exceed their 2030 caps if they do not undergo substantial capital upgrades. Because major retrofits—such as electrification of heating units, HVAC modernization, appliance upgrades, and building envelope work—require multi-year planning and DOB permitting, property managers must begin their 2030 compliance analysis now to start making necessary changes.
2. You Filed, But You're Over Your Cap
Exceeding your carbon budget triggers an annual statutory penalty of $268 per metric ton of CO2 equivalent (CO2e) over the limit. Fines accrue every year the building remains non-compliant and can ultimately result in municipal tax liens.
However, exceeding your limit doesn't always mean you have to pay the full fine. The DOB’s Good Faith Effort framework allows non-compliant owners to mitigate or waive penalties if they can demonstrate active progress. Mitigation options include:
- Submitting an approved Decarbonization Plan showing a clear path to compliance.
- Applying Beneficial Electrification credits for HVAC retrofits already in progress.
- Securing financial hardship adjustments.
Evaluating eligibility requires a rigorous review of your certified filing data before responding to DOB notices.
3. You Didn't File at All
Ignoring the filing requirement is not a good long-term strategy. Non-filers face penalties of $0.50 per square foot per month until the certified report is submitted. For a 100,000-square-foot building, that amounts to $50,000 per month in fines.
The DOB is actively enforcing non-compliance. The agency has already issued Notices of Deficiency to roughly 1,400 non-filing properties, which initiates a strict 60-day cure window before cases are referred to the Office of Administrative Trials and Hearings for entry of formal penalty judgments. If your property has not filed, you must retain a Registered Design Professional to complete and submit your report as soon as possible to stop monthly penalties.
Key Takeaway: If your building is compliant, start your 2030 improvements planning today. If you're over your limit or failed to file, seek legal and technical counsel immediately to mitigate your financial exposure.
How to Get Off the Covered Buildings List
The DOB can’t exempt a building from Local Law 97 (LL97), but building owners still have some avenues to challenge their inclusion on the Covered Buildings List (CBL) to avoid being subject to the law.
1. Challenge Square Footage Calculations
The CBL relies on a building’s gross square footage as reported by the Department of Finance, which can include unroofed spaces, balconies, and loading docks. LL97 uses ENERGY STAR® Gross Floor Area (GFA), which excludes such spaces. If an architect confirms your GFA is under 25,000 sq. ft., you should submit a dispute to the Department of Finance and file a ticket on DOB’s BEAM portal to get off of the CBL.
2. Subdivide Tax Lots to Avoid Aggregation
When multiple buildings are located on a single tax lot and their total combined square footage exceeds 50,000 sf, then all buildings are automatically included in the CBL even if none of them are over the 25,000 sq foot single building threshold. However, if the structures function as separate, independent buildings, then any building that falls below the 25,000 sf threshold could potentially be removed from the CBL by subdividing the tax lot so that the building is on its own tax lot.
3. Reclassify Pathway Under Article 321
Houses of worship, properties with rent-regulated units, and qualified affordable housing do not qualify for complete removal from the CBL. However, filing a dispute ticket on BEAM with Homes and Community Renewal records can reclassify the applicable LL97 Article from Article 320 (with annual carbon caps) to Article 321 (with one-time, low-carbon prescriptive retrofits).
4. Demolition and Structural Alterations
Building alterations that reduce the building’s GFA may result in removal from the CBL. Such alterations should be reported to the DOB along with a request for removal from the CBL.
If you have questions about any of these strategies, or would like advice in filing your dispute, please contact a member of our team.
On the Horizon
- Program Available - NYSERDA’s Charge Ready NY 2.0 program continues to offer first-come, first-served rebates of $3,000 to $4,000 per port for Level 2 EV charging station installations at workplaces, hotels, and multifamily properties. Additional incentives are also available for qualifying owners who meet vehicle-leasing or free-charging commitments.
- Upcoming Deadlines - Under Local Laws 33 and 95, building owners must download their 2026 Energy Efficiency Rating Label via DOB NOW starting October 1 and post it near every public entrance by October 31, 2026. Failure to properly display the updated label carries a mandatory $1,250 fine.
- Items to Watch - The Second Circuit Court of Appeals recently upheld both NYC’s Local Law 154 and the NYS All-Electric Buildings Act, rejecting federal preemption challenges to the ban of fossil-fuel-powered appliances in new residential buildings. This creates a circuit split with the Ninth Circuit (which ruled that federal law preempted a similar gas ban), making a rehearing en banc before the Second Circuit, or even an appeal to the U.S. Supreme Court likely.
- Decarbonization Incentive Expiration - Property owners planning heating, cooling, or domestic hot water upgrades should prioritize completion of beneficial electrification projects before December 31, 2026, to take advantage of the Department of Buildings’ double emissions credit incentive before the credit is cut in half in 2027.
Contact
Please do not hesitate to reach out to us if you have any questions regarding these developments. Contact Michael J. Clain, Partner, Benjamin M. Ellis, Special Counsel, or William C. Ladd, Associate.
Disclaimers
In some jurisdictions, this material may be deemed as attorney advertising. Past results do not guarantee future outcomes. Possession of this material does not constitute an attorney/client relationship. This information is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons and it may include links to websites other than the Windels Marx website. This information should not be acted upon in any particular situation without first consulting with an attorney and obtaining legal advice based on your specific facts and circumstances.
