Shareholder Tenant's Unit Subject to Loft Law

In 2016, the NYC Loft Board ruled that landlord's building was an interim multiple dwelling (IMD) subject to the Loft Law. Landlord filed an Article 78 court proceeding, seeking annulment of the Loft Board's order. The court ruled against landlord, who appealed and lost. The Loft Board's ruling was rational and not arbitrary and capricious or contrary to law or procedure. All of landlord's efforts to file a reconsideration application with the Loft Board were either by improper means, incomplete, or untimely. The Loft Board's interpretation of its rules as requiring that reconsideration applications be filed by mail or hand delivery was rational and entitled to deference. In a related case by landlord against shareholder tenant, the appeals court also upheld the court's initial ruling that the building's lack of a certificate of occupancy (C of O) prevented landlord from seeking to recover rent or use and occupancy for the units in question. This rule applied even if shareholder tenant violated her proprietary lease by obtaining an unjust enrichment through the sublet rent.

Barrett Japaning, Inc. v. Bialobroda: Case Nos. 2019-04299, 2019-3793, 2021 NY Slip Op 00248 (App. Div. 1 Dept.; 1/19/21; Webber, JP, Manazzelli, Gonzalez, Scarpulla, Shulman, JJ)