By Jim Fleming
On June 21, 2010, the Loft Law (Article 7-C of the New York State Multiple Dwelling Law) was amended and now protects residential tenants in many commercial buildings in Williamsburg, Greenpoint, Bushwick, and other areas of the city. Passage of the 2010 Loft Law amendments was supported by a number of local politicians, notably New York State Assembly members Joe Lentol and Vito Lopez, who tried valiantly for decades to get similar legis-lation passed the now-disgraced felon and former Senate Republican leader Joseph Bruno. Democrat State Senator Martin Malave Dilan led the successful effort in that chamber this year, in a close, party-line vote. Mayor Bloomberg’s commercial-developer lackeys engineered an eleventh-hour bid to get Governor Paterson to quash it, but succeeded only in winning exceptions for some “industrial business zones.”
To learn more about the 2010 Loft Law amendments, I interviewed Margaret Sandercock, a partner in the Manhattan law firm Goodfarb & Sandercock, LLP, who often represents loft tenants on housing issues (full disclosure: including my own tenants’ association). I asked her the following questions:
WG: What is the relationship between the recent amendments and the Loft Law as it existed before the amendments?
Margaret Sandercock: Until the 2010 amend-ments to the Loft Law, the statute protected almost exclusively residential tenants of commercial buildings already in occupancy in 1980 and 1981. The 2010 amend-ments protect residential tenants in occupancy of commercial buildings in 2008 and 2009—a whole new crop of residential tenants, many of whom live in Williamsburg, Greenpoint and Bushwick.
Who is responsible for administering the Loft Law?
The New York City Loft Board, 100 Gold Street, New York, New York 10038, (212) 566-5663. The Loft Board has a useful website at www.nyc.gov/html/loft/html/home/home.shtml
Which tenants are covered by the 2010 amendments to the Loft Law?
To be protected under the recent amendments, a tenant must show that his or her building (1) was residentially occupied by three or more families during any consecutive 12 month period from January 1, 2008, through December 31, 2009 (or two units in buildings located north of West 24th Street and south of 27th Street and west of 10th Avenue and east of 11th Avenue); (2) is a structure or portion thereof that at any time was occupied for manufacturing, commercial, or warehouse purposes; and (3) lacks a certificate of occupancy or compliance pursuant to Section 301 of the Multiple Dwelling Law.
What is a “certificate of occupancy or compliance with Section 301 of the Multiple Dwelling Law?”
It is a residential certificate of occupancy.
Do tenants need to use a lawyer to apply for pro-tection under the 2010 amendments to the Loft Law?
Not necessarily, but many tenants prefer to consult with an attorney. There is a statute of limitations within which the tenant must act in order to be covered, and if an application is incorrectly prepared, or is late, the tenant will lose the protection to which he or she is entitled. Tenants using an attorney can avoid these and other problems.
Where do most of the tenants reside who are newly covered under the Loft Law?
Many live in Williamsburg, Greenpoint, Bushwick, Long Island City, and northwest Chelsea, in Manhattan. However, apart from the geo-graphical restrictions mentioned below, newly protected tenants could live anywhere (for instance, I believe there are probably some in the Bronx), as long as their building otherwise qualifies.
What areas of the city were excluded from coverage?
Tenancies in industrial business zones of the city are not protected, except that tenancies in Greenpoint/Williamsburg, North Brooklyn, and certain areas of Long Island City’s industrial business zone are covered. A complete list of industrial business zones can be obtained at: www.nyc.gov/html/imb/html/home/home.shtml
Any restrictions on physical size or features of live/work loft spaces?
Apart from units in industrial business zones, the following units are not covered: those (1) less than 550 square feet in area; and/or (2) located in a basement or cellar; and/or (3) that don’t have at least one window opening onto a lawful street, yard or court; and/or (4) located in a building that on June 21, 2010, contained certain commercial/industrial uses that the Loft Board deems inherently incompatible with residential uses. Also, in general, the tenant, at the tenant’s expense, must have performed some physical conversion of the unit for residential purposes—for instance, the installation of a shower or bathtub and a kitchen with a stove.
How do I get my loft covered under the 2010 amendments to the Loft Law?
Some landlords will voluntarily register their buildings with the Loft Board. A form for this purpose is already available on the Loft Board website. Those tenants whose landlord does not register the building must file an application for coverage with the Loft Board. If there is any doubt about whether the landlord will register the building, the tenants MUST apply.
Any penalties for landlords who don’t comply with registration requirements?
Owners who do not comply can be fined by the Loft Board.
What if tenants have been living in their spaces surreptitiously, without the landlord’s consent?
The knowledge and consent of the landlord is not a requirement for coverage under the Loft Law.
What coverage applies for roommates who were in residence for 12 or more consecutive calendar months in 2008 and 2009 but are not on the lease?
If the building and unit otherwise qualify, whoever occupied the space for 12 consecutive calendar months in 2008 and/or 2009 will be covered. This may be more than one person. Being on the lease is not required.
What about subtenants who were in residence for 12 or more consecutive calendar months in 2008 and 2009 but are not on the lease?
If the building and unit otherwise qualify, the subtenant will be protected. A prime tenant will be protected only with regard to space occupied by the prime tenant as his/her own residence for 12 or more consecutive calendar months in 2008 and 2009.
Are the children of live/work families protected into the future?
Children who lived in the space in 2008 and 2009 and who continue to live there without interruption except for college or military service are protected. Children who leave for other purposes and come back may be protected under the laws of succession.
What are the main benefits of the law to eligible tenants?
First, the law substantially limits the landlord’s ability to evict tenants. Second, the law is expected to limit rent increases to protected tenants. Third, the landlord must bring the building up to residential code standards and obtain a residential certificate of occupancy.
Who bears the cost of building improvements to obtain the certificate of occupancy?
Initially, the landlord, but after the certificate of occupancy is obtained, the landlord can apply to the Loft Board to impose temporary rent increases to recapture some of the costs.
Can tenants subject to the Loft Law transfer their tenancies and the fixtures they have installed if they want to move?
Loft Law tenants can sell their rights and fixtures but must offer them to the landlord before consummating any sale to a third party. The requirements are a bit technical and most tenants consult with an attorney before attempting this.
Can any real estate or landlord tenant attorney help me with Loft Law issues if I decide I do need an attorney’s help?
Not really. This is a very detail-oriented field and only a few attorneys are really on top of it. You should ask in detail about the attorney’s loft background before making a choice.
Are there any uncertainties surrounding the 2010 Loft Law amendments that I should know about?
The Loft Board has to adopt regulations to carry out the newly amended statute. Until the regulations are adopted, the full range of rights and obligations of new Loft Law tenants cannot be determined. Also, the statute of limit-ations (the last day on which applications can be filed to be protected under the law) will be determined based on when these regulations are adopted. So stay tuned with the Loft Board website, active community housing groups, or your attorney to learn of further developments.
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