Illegal Loft Tenants Not Subject to Rent Stabilization

October 31, 2008

LVT Number: #20812

Brooklyn tenants living in a commercial loft building sued landlord. Among other things, they claimed that they were subject to rent stabilization. Landlord asked the court to dismiss the case without a trial, arguing that tenants weren't protected by the ETPA. The court ruled for landlord. Tenants appealed and lost. The building was illegally converted to residential use and therefore doesn't qualify for coverage under the ETPA.

Brooklyn tenants living in a commercial loft building sued landlord. Among other things, they claimed that they were subject to rent stabilization. Landlord asked the court to dismiss the case without a trial, arguing that tenants weren't protected by the ETPA. The court ruled for landlord. Tenants appealed and lost. The building was illegally converted to residential use and therefore doesn't qualify for coverage under the ETPA. Notably, the court's ruling is at odds with First Department case law, which has held that, if a loft unit can be legalized, it may be subject to rent stabilization.

Caldwell v. American Package Co., Inc.: NYLJ, 10/29/08, p. 31, col. 1 (App. Div. 2 Dept.; Spolzino, JP, Miller, Dillon, McCarthy, JJ)

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