ACEVEDO v. PIANO BLDG. LLC No. 105755/05, 12981299
70 A.D.3d 124 (2009)
891 N.Y.S.2d 41
2009 NY Slip Op 9168
JAMES ACEVEDO et al., Plaintiffs, and STEVE ROSENTHAL, Respondent, v. THE PIANO BUILDING LLC, Appellant, et al., Defendant.
Appellate Division of the Supreme Court of New York, First Department.
Decided December 10, 2009.
Heiberger & Associates, P.C., New York City ( Maxwell Breed and Lawrence C. McCourt of counsel), for appellant.
Himmelstein McConnell Gribben Donoghue & Joseph, New York City ( David E. Frazer of counsel), for respondent.
MAZZARELLI, J.P., ANDRIAS, MOSKOWITZ and RICHTER, JJ., concur.
OPINION OF THE COURT
In this landlord-tenant dispute, we revisit the issue of whether an apartment covered by the Loft Law may revert to rent stabilization after the landlord purchased the prior occupant's rights under Multiple Dwelling Law § 286 (12) in a pre-1974 building containing six or more residential units. The landlord invites us to overrule our 2002 pronouncement in 182 Fifth Ave. v Design Dev. Concepts (300 A.D.2d 198 ) in which we answered the question in the affirmative. The owner relies primarily upon Wolinsky v Kee Yip Realty Corp. (2 N.Y.3d 487 ), which the Second Department has interpreted broadly as barring Emergency Tenant Protection Act of 1974 ([ETPA] L 1974, ch 576, § 4, as amended)
The essential facts are undisputed. The unit that is the subject of this action is a loft apartment (unit 14C) at 115 West 23rd Street in Manhattan. When the former owner purchased the
In December 1995, the former owner purchased the tenant's rights under the Loft Law pursuant to Multiple Dwelling Law § 286 (12). The Loft Board sales record form indicates that the unit would not be converted to nonresidential use. In the space asking whether the unit is "subject to rent regulation under any other law, rule or regulation," the response is that it was an IMD and "is now registered with DHCR." The buyout agreement states that the Christensens, as occupants of the unit vacated, "were and are covered under article 7C of the Multiple Dwelling Law or the Rent Stabilization Laws."
In June 1999, plaintiff Rosenthal began to occupy unit 14C pursuant to a residential lease. From its inception, the prior owner treated Rosenthal as an unregulated market rent tenant, with monthly rent starting at $2,781.
Following discovery, the tenant and the landlord each moved for summary judgment on the foregoing defense. The court granted the tenant's motion and denied the owner's cross motion, relying primarily upon our decision in 182 Fifth Ave. v Design Dev. Concepts. The owner now appeals.
We reject the owner's assertion that the sale of the Loft Law rights here ended the unit's eligibility for rent stabilization. In 182 Fifth Ave., this Court confronted a circumstance identical to this one: the owner of a loft covered by the Loft Law purchased the protected occupant's rights under Multiple Dwelling Law § 286 (12) and then leased the unit for residential purposes. We held that where, as here, the building contains six or more residential units, it is subject to rent stabilization by virtue of ETPA "notwithstanding the sale of Loft Law rights by a prior tenant" (300 AD2d at 199; see also Matter of 315 Berry St. Corp. v Hanson Fine Arts, 39 A.D.3d 656 , lv dismissed 10 N.Y.3d 742 ).
The result in 182 Fifth Ave. and its progeny is amply supported by the plain language of Multiple Dwelling Law § 286 (12), which reads as follows:
By its own terms, Multiple Dwelling Law § 286 (12) applies only to the purchase of an occupant's Loft Law rights. The statute says nothing about rent stabilization or ETPA; it says nothing about any subsequent tenant's rights; indeed, it says nothing about deregulating units in any way whatsoever. The purchase of rights permitted in this section is thus necessarily limited to an occupant's rights under the Loft Law.
This conclusion is bolstered by the Loft Board's own regulations, which contemplate that units formerly covered by the Loft Law may be subject to rent stabilization even after they have been "deregulated" under the Loft Law. These regulations provide that an owner has two options after a sale of rights
Under the regulation, the second option offered by the Loft Law upon a sale pursuant to Multiple Dwelling Law § 286 (12) is to continue residential use, except that the owner must legalize the unit under the Loft Law and it may remain subject to rent regulation (29 RCNY 2-10 [c] ):
The only other "such rent regulation" is ETPA. The Loft Board thus acknowledges that a former Loft Law unit may be covered by rent stabilization. If there were no other basis for regulation, such as ETPA, there would have been no reason for the phrase in the regulation referring to "the sole basis for such rent regulation."
To hold otherwise would negate the intent of the Loft Law, which was not to supplant rent regulation. Indeed, at the time of passage of the Loft Law, lofts that met statutory requirements were covered by the rent regulations, and this was not altered by the Legislature in passing the Loft Law or the amendment to ETPA (see Mandel v Pitkowsky, 102 Misc.2d 478 [App Term 1979], affd 76 A.D.2d 807 ). Instead, the purpose of the Loft Law was to integrate unregulated loft dwelling units
Realizing that tenants in such buildings would suffer a great hardship if forced to relocate, the Legislature enacted the Loft Law to allow residential tenants who had moved into nonresidential loft buildings in New York City prior to 1981 to remain in their units while landlords performed the work necessary to legalize the buildings for residential use, within specifically prescribed time periods, culminating in obtaining a certificate of occupancy as a class A multiple dwelling for the residential portions of the building or structure.
The owner's reliance on Wolinsky v Kee Yip Realty Corp. is misplaced. There, the tenants did not seek protection under the Loft Law since they had illegally converted their commercially leased units, at their own expense, over a decade after the Loft Law's eligibility period ended. In addition, the building in question did not have a residential certificate of occupancy and the applicable zoning did not permit residential use. The tenants sought a declaration that "notwithstanding their illegal use of the space, they [we]re protected by the Rent Stabilization Law and Rent Stabilization Code through the ETPA" (2 NY3d at 490). The Wolinsky Court found that reading the Loft Law and ETPA together, the "tenants' illegal conversions do not fall under the ambit of the ETPA," noting that if the previously enacted ETPA "already protected illegal residential conversions of manufacturing space, significant portions of the Loft Law would have been unnecessary" (id. at 493).
Significantly, focusing on Wolinsky's statement quoted immediately above, this Court has held that rent stabilization under ETPA may apply to a loft unit otherwise not covered by the Loft Law where the unit is capable of legalization (see 142 Fulton LLC v Hegarty, 41 A.D.3d 286, 288 ; Duane Thomas LLC v Wallin, 35 A.D.3d 232 ; see also Matter of 315 Berry St. Corp., 39 AD3d at 657). For instance, in Duane Thomas, this Court affirmed Supreme Court's declaration that a loft unit not covered by the Loft Law was still covered by rent stabilization, holding (35 AD3d at 233):
As the foregoing analysis illustrates, nothing in Wolinsky compels us to overrule our holding in 182 Fifth Ave., which is dispositive of the issue here. Where zoning expressly allows residential
Accordingly, the order and judgment (one paper) of Supreme Court, New York County (Marcy S. Friedman, J.), entered June 19, 2008, which, inter alia, granted plaintiff Rosenthal's motion for summary judgment and declared his unit subject to rent stabilization pursuant to the Emergency Tenant Protection Act of 1974, should be affirmed, without costs.
Order and judgment (one paper), Supreme Court, New York County, entered June 19, 2008, affirmed, without costs.
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