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Homes and Community Renewal

2009-B-08: Procedure for Certification of Commercial Leases

To: All Housing Companies
     Owners, Managing Agents and Site Managers

From: Robert Damico, Downstate Director
          Housing Management Bureau

Date: June 8, 2009

Subject: Procedure for Certification of Commercial Leases


DHCR has streamlined its commercial lease review procedure and revised and renamed the attached transmittal form, "Certification of Commercial Lease" (HM-59) [5/09], in order to expedite the leasing of commercial space at State-supervised housing companies. The revised form enables the housing company to self-certify that the lease conforms to a number of outlined conditions and requirements, thereby eliminating the need for prior DHCR approval in most cases.

Previously, all proposed commercial leases required DHCR approval prior to commencement. Under the new procedure, housing companies must continue to submit commercial leases to DHCR for record purposes along with a completed "Certification of Commercial Lease" form; however, prior DHCR approval is only required in the following cases:

  1. if there is an identity of interest (IOI), as defined in DHCR regulations, or the lease is with a former principal, member or employee or the housing company or its managing agent;

  2. if the rent is less than projected as part of the commercial income in the last approved budget; or

  3. if the lease involves the installation of roof top antennas, communication equipment, or other building appenditures.

Effective immediately, the certification procedure on the reverse should be followed for all proposed commercial or professional leases and related assignment and assumption agreements, amendments and extensions.

Procedure for Certification of Commercial Leases

  1. Access the "Certification of Commercial Lease" (HM-59) form in a fillable pdf format on DHCR's website @ http://www.nyshcr.org/Forms/HousingMangementBureau/ and follow the instructions.

  2. Complete the certification it in its entirety, indicating whether or not prior DHCR approval is required. If required, sufficient time for DHCR review and approval must be allocated.

    (Note that a commercial space may be rented to a not-for-profit organization for less than market rent if in the judgment of the housing company it will enhance the quality of life for its residents. The anticipated benefit must be explained in section 6,c,i of the HM-59. Prior DHCR approval of the lease is not required unless one or more of the three conditions necessitating such approval apply.)

  3. Have the certification form signed by an authorized agent of the housing company and examined and approved by its legal counsel. The approval by counsel shall include a review to assure that DHCR and any state mortgagee are additionally insured in the amounts required by DHCR and that they would be defended and indemnified.

  4. Maintain a copy of the certification for housing company records and submit the original to DHCR along with an executed copy of the lease, including riders and addenda, and an authorizing board resolution, where applicable.

Should you have any questions concerning this procedure, please contact your assigned Housing Management Representative.

- Robert Damico

Last updated on 05/12/10