Managing a property in New York City is a complex job. Between tenant needs, operational budgets, and maintenance, you already have a full plate. Adding a growing list of complex energy regulations to the mix can feel overwhelming. One of the most significant compliance mandates you can’t afford to ignore is NYC Local Law 87.
This law requires periodic energy check-ups for large buildings, and failing to comply comes with steep penalties. The process can seem technical and confusing, but it doesn’t have to be. This article provides a clear, no-nonsense breakdown of what Local Law 87 is, who it affects, and exactly what you need to do to stay compliant.
Local Law 87 of 2009 requires buildings over 50,000 square feet to conduct energy audits and retro-commissioning to improve energy efficiency across the city. Let’s break down what that means for you.
Key Takeaways
- Who Must Comply: LL87 applies to most NYC buildings over 50,000 gross square feet. Your specific compliance deadline occurs once every ten years and is determined by the last digit of your property’s tax block number.
- Core Requirements: To comply, you must complete two technical assessments: a detailed energy audit of your base building systems and a retro-commissioning study to ensure those systems are running as efficiently as possible.
- The Consequence of Inaction: Failure to submit your Energy Efficiency Report (EER) on time results in a Class 2 violation and significant financial penalties that accrue annually until you comply.
- The Path to Compliance: The process involves hiring a qualified energy professional to conduct the necessary studies, prepare the official EER, and submit it to the Department of Buildings on your behalf.
Why Does It Matter?
At its core, Local Law 87 is a mandate for periodic energy “check-ups” designed to improve building efficiency and reduce carbon emissions across New York City. Think of it as a required physical for your building’s energy systems to identify and correct inefficiencies.
The “why” behind this law is directly tied to the city’s ambitious sustainability goals. Buildings account for approximately 70% of NYC’s greenhouse gas emissions, making them the primary target for environmental legislation. By requiring building owners to investigate and optimize their energy performance, the city aims to make a significant dent in its overall carbon footprint.
For a proactive property manager, it’s helpful to frame compliance not just as a cost, but as an opportunity. The findings from an LL87 assessment can uncover hidden energy waste, leading to lower operating costs, improved tenant comfort, and enhanced building performance for years to come. That’s especially true with NYC Local Law 87, which requires periodic energy audits and retro-commissioning—but also gives building teams a chance to pinpoint inefficiencies and plan smarter upgrades that pay off long-term.
Does LL87 Apply to Your Building? A Simple Checklist
Determining if LL87 applies to your property is the first critical step. The rules are straightforward and based primarily on building size.
Your building must comply if it meets either of these criteria:
- A single building with a gross floor area exceeding 50,000 square feet.
- A group of two or more buildings on the same tax lot that, when combined, exceed 100,000 gross square feet.
This is not a one-time requirement. Compliance is cyclical, occurring once every ten years. Your specific deadline is determined by the last digit of your building’s tax block number. For example, if your tax block number ends in a ‘3’, your EER was due in 2013, is due again in 2023, and will be due again in 2033.
While most large buildings are covered, some limited exceptions apply for new buildings or those that have already achieved high levels of energy performance through specific certifications.
The Two Pillars of LL87 Compliance: What You Need to Do
Complying with Local Law 87 boils down to completing two distinct but related technical assessments. These are not simple checklists you can complete yourself; they require specialized expertise and a deep understanding of building science.
Pillar 1: The Energy Audit
An energy audit is a comprehensive analysis of your building’s energy consumption. Its goal is to identify opportunities for efficiency improvements and cost savings. This is a forensic look at where your energy dollars are going.
During the audit, a qualified professional evaluates the “base building systems”—the core equipment that serves the entire property. This includes:
- Heating, Ventilation, and Air Conditioning (HVAC) systems
- Building envelope (roof, walls, windows)
- Lighting systems and controls
- Domestic hot water systems
The final deliverable from the audit is a detailed report that outlines potential Energy Conservation Measures (ECMs). Each ECM includes an estimate of implementation costs, projected energy savings, and the expected payback period, giving you a clear roadmap for future capital improvements.
Pillar 2: The Retro-Commissioning Study
While the audit identifies what could be improved, retro-commissioning focuses on optimizing what you already have. It is a systematic process of fine-tuning your existing building systems to ensure they operate at peak efficiency and as they were originally designed.
If the energy audit is like a doctor’s diagnosis identifying potential health issues, retro-commissioning is the physical therapy that gets the systems working correctly again.
This study identifies and corrects low-cost operational problems that often go unnoticed, such as faulty sensors, incorrect equipment schedules, or improper control sequences. This process requires a deep understanding of building controls and systems integration to uncover hidden inefficiencies.
Fulfilling these requirements involves a detailed technical analysis and report. For busy property managers, this is why many opt for a complete, done-for-you compliance service to ensure every detail is handled correctly.
Penalties, Exemptions, and Key Deadlines
Understanding the consequences of inaction is critical for prioritizing compliance. The city takes these deadlines seriously, and the penalties are designed to ensure action.
The Cost of Non-Compliance
Failing to file your EER by the deadline results in a Class 2 violation. This is not a minor infraction. It comes with a significant fine for the first year of non-compliance and an even larger fine for each additional year the building remains in violation.
These penalties are automatic and continue to accrue until the required report is successfully submitted and accepted by the DOB. Proactive planning is the only way to avoid these unnecessary costs.
Are There Exemptions or Deferrals?
Some buildings may be able to delay or bypass the full audit and retro-commissioning requirements, but the conditions are very specific and limited.
An exemption may be granted if your building meets one of these criteria:
- It is less than 10 years old.
- It has received an ENERGY STAR label for at least two of the last three years.
- It is certified under the LEED for Existing Buildings rating system.
A one-time deferral (extension) can be filed if you can professionally demonstrate that all your base building systems are already in compliance with the NYC energy conservation code. Pursuing either an exemption or a deferral is not automatic; it requires a formal application and assessment by a qualified professional to be submitted to the DOB.
Conclusion
NYC Local Law 87 is a mandatory requirement for large buildings, and it comes with significant financial penalties for non-compliance. While the process is technical, it is built on two core components: a thorough energy audit to identify potential improvements and a retro-commissioning study to optimize existing systems.
The main takeaway is that while the law is complex, the path to compliance is entirely manageable with proactive planning and the right expert partner. Engaging a professional early removes the burden from your shoulders and ensures you meet your deadline without issue. Tackling LL87 is not only a legal necessity—it’s a smart investment in your building’s long-term efficiency, value, and sustainability.