Commercial Space Used as Residence

Facts: Landlord rented space to tenants under a commercial lease. Tenants remained in occupancy as month-to-month tenants for a while after the lease ended. Landlord then terminated the tenancy and sued to evict tenants. Tenants claimed that landlord had consented to their residential use of the premises and that they were rent stabilized under the ETPA. The court ruled for landlord, and tenants appealed. Court: Tenants lose. If tenants lived in the unit with landlord's knowledge, they could be subject to ETPA coverage even though they had a commercial lease. But landlord credibly testified that it never consented to residential use of the unit, and that the unit wasn't equipped for residential occupancy when rented. No witnesses testified that tenant stayed overnight in the unit. Landlord's employee stated that he never saw tenant in the building after business hours. Tenant also had bought a house on Long Island, and documents showed that it was used as her residence. And landlord's having mistakenly registered tenants' unit with the DHCR didn't make it rent stabilized.

Benroal Realty Assocs. LP v. Lowe: NYLJ, 7/15/05, p. 30, col. 6 (App. T. 2 Dept.; Rudolph, PJ, McCabe, Covello, JJ)