Loft Unit Deregulated by Prior Tenant Buyout

Landlord sued to evict loft tenant. Landlord claimed that tenant's 1990 lease was extended through January 2004 and that tenant thereafter became a month-to-month tenant. The building was an intermediate multiple dwelling that was removed from rent regulation by the sale of improvements on file with the Loft Board, and that when tenant moved in, the unit had been deregulated. Tenant claimed that she was rent stabilized and asked the court to dismiss the case. The court ruled for landlord after a trial. Multiple Dwelling Law Section 286(6) permitted landlord to decontrol a loft unit if he purchased an outgoing tenant's fixtures. Evidence at trial showed that prior tenant's 1980 lease provided that the fair market value of tenant's fixtures was $2,000 and that landlord could purchase them upon lease termination. Since prior tenant moved out owing more than $2,000 in back rent, landlord constructively purchased his fixtures. Landlord also had a buyout agreement with another prior tenant. Under DHCR Policy Statement 89-7, when landlord buys tenant's loft improvements or otherwise agrees with tenant on terms of a move-out, the loft is no longer subject to rent stabilization. Current tenant wasn't protected by the Loft Law, and landlord was entitled to possession.

73 Tribeca LLC v. Greenbaum: 36 Misc.3d 1217(A), NY Slip Op. 51385(U) (Civ. Ct. NY; 7/25/12; Kraus, J)