Buyouts of Prior Loft Tenants Permanently Excluded Units from Rent Regulation

The Loft Board found that residential units in a building qualified as interim multiple dwellings (IMDs) under the Loft Law but weren't subject to rent stabilization upon prior landlord's purchase of former tenants' fixtures and rights. Tenants filed an Article 78 court appeal, claiming that the Loft Board's decision was unreasonable. The court ruled against tenants, who appealed and lost. The Loft Board's decision was rational and not contrary to law. When former tenants sold their fixtures and rights in the units to prior landlord in 1984 and 1992, the units remained residential and landlord remained subject to all requirements of the Loft Law, except that the units were no longer subject to rent regulation since coverage under Multiple Dwelling Law Article 7-C was the sole basis for regulation. Also, prior landlord's undisputed buyout of all fixtures, improvements, and protected occupancy rights prior to current tenants' occupancy permanently excluded those units from ever regaining rent-regulated status.

Fievet v. NYC Loft Board: 2017 NY Slip Op 03450, 2017 WL 1555747 (App. Div. 1 Dept.; 5/2/17; Friedman, JP, Andrias, Feinman, Kapnick, Gesmer, JJ)