Purchase of Loft Rights Doesn't Preclude Future Rent Stabilization

Facts: In 1985, the NYC Loft Board ruled that landlord's loft building was subject to the Loft Law of 1982. In 1995, landlord purchased tenant's loft law rights as permitted by Multiple Dwelling Law Section 286(12). In 1999, tenant moved out, and new tenant moved in. New tenant paid landlord unregulated market rent of $2,781 per month. Later, the rent was raised to $3,201. Tenant later sued landlord, claiming that he was subject to rent stabilization and was being overcharged. Landlord argued that the loft unit was permanently deregulated when landlord bought prior tenant's loft law rights. The court ruled for tenant, and landlord appealed.

Court: Landlord loses. The Loft Law section permitting deregulation by purchase of a tenant's loft law rights says nothing about rent stabilization or the ETPA, or about a subsequent tenant's rights. The building contained six or more units and had been legalized for residential occupancy. New tenant is subject to rent stabilization under the ETPA. The court noted that its decision was in conflict with a decision by the appeals court in the Second Department on the same question.

Acevedo v. The Piano Building LLC: NYLJ, 12/15/09, p. 37, col. 3 (App. Div. 1 Dept.; Mazzarelli, JP, Andrias, Moskowitz, Renwick, Richter, JJ)