Loft Is Rent Stabilized

April 30, 2007

LVT Number: #19581

Landlord sued to evict loft tenant and claimed that the loft was deregulated. Subtenants argued that the loft was rent stabilized. The court and first appeals court ruled for subtenants. Landlord appealed again and lost. Landlord had obtained deregulation of the building under the Loft Law by purchasing improvements and rights to the unit from former tenant and telling the Loft Board that the loft would be used for nonresidential purposes. But landlord knew that current tenant illegally converted the loft to residential use by subtenants.

Landlord sued to evict loft tenant and claimed that the loft was deregulated. Subtenants argued that the loft was rent stabilized. The court and first appeals court ruled for subtenants. Landlord appealed again and lost. Landlord had obtained deregulation of the building under the Loft Law by purchasing improvements and rights to the unit from former tenant and telling the Loft Board that the loft would be used for nonresidential purposes. But landlord knew that current tenant illegally converted the loft to residential use by subtenants. Under these circumstances, the loft became subject to rent stabilization. Subtenants also became the legal rent-stabilized tenants because current tenant was illusory.

315 Berry Street Corporation v. Hanson Fine Arts: NYLJ, 4/18/07, p. 30, col. 2 (App. Div. 2 Dept.; Miller, JP, Mastro, Ritter, Balkin, JJ)

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