Loft Tenant Didn't Waive Counterclaims

Landlord sued to eject residential loft tenant. Tenant's lease had expired in 2004 and wasn't renewed, and landlord claimed that tenant remained without permission. Landlord claimed that residential occupancy of the loft was illegal. Tenant raised counterclaims against landlord. Among other things, tenant said that landlord was trying to empty the building to convert it to condominium ownership. Tenant also claimed that he was subject to rent stabilization. Landlord argued that tenant's lease contained a "no counterclaim" clause and that counterclaims were waived because tenant's lease was no longer in effect. Landlord asked the court to dismiss tenant's counterclaims. The court ruled against landlord. Tenant waived counterclaims contained in the prior lease. But tenant's claim about condo conversion concerned violations of the Martin Act. And there were questions of fact as to whether tenant's loft unit was subject to the Loft Law and rent stabilization. Tenant's counterclaims were so intertwined with landlord's claims that they shouldn't be dismissed.

47 Thames Realty LLC v. Kreiling: NYLJ, 8/16/07, p. 27, col. 1 (Sup. Ct. Kings; Harkavy, J)