Investigations and Penalties.
19 RCNY § 62-04
in effect§ 62-04 Investigations and Penalties.
(a) Audit authority. The commissioner may conduct an audit for the purposes of determining the amount of the surcharge owed by a covered property, including any determination relating to primary residence, and any certification or documentation of primary residency submitted to the department, provided that any audit of such certification or documentation shall be conducted within six years of the submission of such certification or documentation.
(b) Collection of records and subpoena. The commissioner may:
1. compile any materials necessary to conduct such audit; and
2. subpoena and require the attendance of witnesses and the production of books, papers and documents to secure information pertinent to an audit initiated pursuant to subdivision (a) of this section.
(c) Transmission of notice of penalty.
1. The commissioner may transmit a notice of penalty to any owner of a covered property where the commissioner determines that: (i) any certification or documentation submitted to the department in connection with the imposition of the surcharge on a covered property contains inaccurate or misleading information that: (A) is material to the determination of the imposition of such surcharge, including a determination relating to primary residence; and (B) was submitted negligently or in bad faith; or (ii) a covered property that is a residential condominium unit has been divided into more than three units to avoid application of such surcharge and the owner of such covered property has made such division in bad faith. Such notice shall include the amount of such penalty pursuant to subdivision (g) of this section.
2. The commissioner shall transmit such notice to:
(i) the address of the owner of record of such covered property filed with the department, provided that in the case of a covered property that is a residential cooperative property, such notice shall be transmitted to both the owner of record of such residential cooperative property and the owner of record of the applicable residential cooperative dwelling unit; and
(ii) the address of any person who has registered with respect to such covered property pursuant to Administrative Code § 11-309.
(d) Filing of a petition for a hearing.
1. An owner of a covered property that is subject to a notice of penalty pursuant to this section may request a hearing by filing a petition with the department no later than 30 days from the date of transmission of such notice on a form designated by the department. Failure to file a petition for a hearing within such period shall result in the imposition of a penalty pursuant to subdivision (g) of this section.
2. A petition may be filed only by an owner of a covered property or by a duly authorized representative of the owner, provided that that in the case of a covered property that is a residential cooperative property, a petition may be filed by the owner of record or duly authorized representative of either such residential cooperative property or the applicable residential cooperative dwelling unit.
(e) Delegation to the office of administrative trials and hearings.
1. If, prior to issuance of a notice of penalty, the commissioner and OATH enter into a memorandum of understanding authorizing OATH to conduct hearings in accordance with the procedures set forth in Title 48 of the Rules of the City of New York and such memorandum of understanding has not been terminated, then upon receipt of a petition filed in a timely manner pursuant to subdivision (d) of this section: (i) the department shall transmit such petition to OATH; and (ii) following a hearing on such notice of penalty conducted in accordance with such title, the presiding hearing officer shall make a recommendation to the commissioner with respect to whether to impose penalties pursuant to this section. The commissioner shall make a determination regarding whether to impose penalties pursuant to this section no later than 30 days after the receipt of such recommendation, provided that the failure of the commissioner to make a determination within such time period shall not result in a waiver of such penalties. The commissioner shall transmit such determination to both the owner and the duly authorized representative of the owner, if any, at the addresses provided in the petition.
2. If the commissioner and OATH have not entered into a memorandum of understanding pursuant to paragraph 1 of this subdivision prior to issuance of a notice of penalty, or if such memorandum of understanding has been terminated prior to such issuance, any such hearing shall be conducted in accordance with the provisions of subdivision (f) of this section.
(f) Conduct of hearings by the department.
1. Designation of hearing officer. The commissioner shall designate a person to serve as hearing officer to hear petitions filed pursuant to these rules. Such person need not be an employee of the department.
2. Representation of petitioners. A duly authorized representative may appear on behalf of an owner at a hearing. If an owner is an individual, such individual may appear on their own behalf.
3. Proof of authorization. Documentation demonstrating that an individual is a duly authorized representative or such individual’s status as a duly authorized representative is revoked must be filed with the hearing officer with or prior to such individual’s appearance or submission of documents on behalf of an owner.
4. Consolidation, joinder, severance.
(i) Any party to a hearing may request the consolidation of hearings relating to the same owner or property.
(ii) Any party may request the severance of a matter in a hearing relating to a property when such property is not owned by the same owner or identical issues of fact or law are not involved.
(iii) Consolidation, joinder or severance of any case or issue shall be permitted at the discretion of the hearing officer.
5. Ex parte communications. No party to a hearing may make an ex parte communication to a hearing officer with respect to the merits of such hearing.
6. Burden of proof. The department shall have the burden of establishing each fact relevant to a determination of the matters reviewable pursuant to this subdivision by a preponderance of the evidence.
7. Hearings without personal appearance. A petition for a hearing without a personal appearance may be made by mail or on the department’s website in accordance with this paragraph.
(i) A hearing by mail or website may be conducted by submission of a paper or electronic form, as applicable, if a petition filed pursuant to subdivision (d) of this section indicates that the petitioner wishes to conduct a hearing without a personal appearance. Such form must be received at an address or web portal designated by the department no later than 30 days following submission of such petition. Attached to such form, the petitioner may include legal memoranda, additional documents or other material in support of the owner’s position and proof that the individual submitting such form is authorized to submit such petition pursuant to paragraph 2 of this subdivision.
(ii) Upon receipt of a copy of the form and any materials attached thereto, the department may also submit legal memoranda, additional documents or other materials to the hearing officer to support the department’s position within a reasonable time as determined by the hearing officer.
(iii) At any time after receipt of a petition indicating a request for a hearing without personal appearance, the hearing officer may by subpoena require the production of any relevant books, papers and documents, upon written request of a petitioner or the department.
(iv) At any time after receipt of submissions by the petitioner and the department pursuant to subparagraphs (i) and (ii) of this paragraph, a hearing officer may give both the department and the petitioner the opportunity to submit additional materials and legal memoranda in support of their positions.
8. Hearing in person or through simultaneous electronic appearance. If a petition submitted pursuant to subdivision (d) of this section indicates that the petitioner wishes to conduct a hearing in person or through simultaneous electronic webcast, the following provisions shall apply to such hearing:
(i) The hearing officer may by subpoena require the production of any relevant books, papers and documents upon written request of a petitioner or the department.
(ii) The hearing officer shall be authorized to:
(A) administer oaths and affirmations;
(B) dictate the course of the hearing, set the time and place for conducting the hearing, and fix the time and manner for filing of legal briefs, memoranda and other documents;
(C) rule upon offers of proof and receive relevant evidence;
(D) require the parties at any time during the hearing to state their respective positions in support of any issues under consideration in the matter;
(E) question any party or witness for the purpose of clarifying the record; and
(F) take any other action that the hearing officer determines is appropriate to conduct a speedy and expeditious hearing.
(iii) The hearing officer shall set a schedule for the hearing as soon as is practicable. The parties shall be given notice of the hearing date no fewer than 20 days prior to such date. The notice shall include the time, place, and nature of the hearing, including whether the hearing will be conducted through simultaneous electronic webcast. The hearing officer will not consider a request for a postponement of a hearing date unless a written application setting forth good cause for the postponement is received by the hearing officer within 10 days after transmission of the hearing notice. In the event of an emergency, however, a postponement may be considered on shorter notice. A postponement may be granted only in writing by the hearing officer.
(iv) At the hearing, the parties shall have the right to call and examine witnesses, to introduce exhibits, and to cross-examine opposing witnesses.
(v) In the discretion of the hearing officer, technical rules of evidence need not be applied. However, the rules of privilege recognized by law shall apply. Objections to evidentiary offers may be made and shall be noted in the record.
(vi) Hearings shall be transcribed verbatim or recorded by electronic means determined by the hearing officer. A copy of the transcript or recording shall be provided to all parties within a reasonable time after the hearing is concluded.
9. Hearing officer recommendation.
(i) Following a hearing conducted pursuant to either paragraph 7 or 8 of this subdivision, the hearing officer shall make a recommendation to the commissioner regarding whether any documentation or certification was submitted as described in paragraph (1) of subdivision (c) of this section or a division of a residential condominium unit has been made as described in such paragraph and a recommendation regarding the imposition of a penalty pursuant to this section. Such recommendation shall be based on any relevant findings of fact and conclusions of law, upon consideration of the record as a whole and as supported by the evidence entered by the parties. A copy of the determination shall be mailed to the petitioner and to the petitioner’s duly authorized representative, if any.
(ii) If a petitioner fails to appear at a hearing and no written postponement has been granted pursuant to subparagraph (iii) of paragraph 8 of this subdivision or fails to make a submission required by paragraph 7 of this subdivision within a timeframe designated by these rules or an order of the hearing officer, the hearing shall be concluded and the hearing officer shall make a recommendation to the commissioner for final determination based on the record, if any, previously made.
10. Commissioner determination. The commissioner, upon review of a hearing officer’s recommendation made pursuant to paragraph 9 of this subdivision, shall render a final determination regarding the imposition of a penalty pursuant to this section within 30 days of the receipt of such recommendation, provided that the failure of the commissioner to make a determination within such period shall not result in a waiver of such penalties. Notwithstanding any provision of this chapter to the contrary, the commissioner shall not designate any individual to make such determination who audited or investigated the owner or property subject to such penalties, issued the notice of penalty, or represented the department in a hearing regarding such penalties. A copy of the determination shall be mailed to both the petitioner and the petitioner’s duly authorized representative, if any. Such determination shall constitute a final agency determination and is subject to challenge pursuant to Article 78 of the civil practice law and rules.
(g) Penalty amounts. If the commissioner determines that any certification or documentation submitted to the department in connection with the imposition of the surcharge was submitted, or a residential condominium was subdivided as described in paragraph (1) of subdivision (c) of this section, and any such subdivision, certification or documentation, if accepted as accurate by the department, would result in:
1. the surcharge not being imposed upon such property, a penalty of 50% of the surcharge applicable to such property for such fiscal year shall be imposed, and the commissioner shall reinstate such surcharge against such property for such fiscal year; or
2. the valuation of a property pursuant to Chapter 32 of Title 11 of the Administrative Code at a lower amount than would otherwise have been assigned by the department, a penalty equal to 300% of the amount of the difference in surcharge that would result from such lower valuation shall be imposed, provided that such penalty shall not exceed 50% of the surcharge applicable to such property.
(Added City Record 7/14/2026, eff. 7/14/2026)
Source: City of New York, Charter, Administrative Code and Rules (American Legal Publishing XML export, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/newyorkcity/latest/NYCrules/0-0-0-156108Fetched: 10/24/2026