Tenants Illegally Converted Commercial Units

Facts: Landlord rented commercial loft units on five floors of a SoHo building to tenants in 1997. Tenants converted the raw spaces into residential lofts at their own expense. There was no residential C of O for the building. Tenants lived in the units illegally and had no protected status as artists. When their leases were ending, tenants sued landlord and asked the court to declare that they were protected by rent stabilization. The lower courts ruled against tenants and they appealed to the Court of Appeals. Court: Tenants lose. They aren't protected by the Loft Law because that law applied only to residential loft tenants in occupancy in December 1981. And while the Emergency Tenant Protection Act of 1974 doesn't specifically exempt illegal lofts from rent stabilization coverage, the legislature didn't intend to protect this type of tenant. Neither the Loft Law nor any New York City zoning law has been amended to protect recent illegal loft tenants.

Wolinsky v. Kee Yip Realty Corp.: NYLJ, 6/9/04, p. 20, col. 2 (Ct. App. NY; Graffeo, PJ, Kaye, G.B. Smith, Ciparick, Rosenblatt, Read, R.S. Smith, JJ)