Tenant's Proposed Sale of Fixtures Wasn't ‘Bona Fide'

(Decision submitted by Joseph Burden of the Manhattan law firm of Belkin Burden Wenig & Goldman, attorneys for the landlord.) Facts: Tenant, who was moving out of a loft, filed a Sales of Improvements Disclosure Form with the Loft Board. Tenant stated that he was selling fixtures to the incoming tenant for over $44,000. Landlord claimed that this wasn't a bona-fide transaction because the new tenant was tenant's stepson and because the fair market replacement value of tenant's fixtures was closer to $9,000. Landlord claimed that tenant's agreement with stepson was a sham intended to prevent landlord from purchasing the fixtures at a fair market value. Tenant claimed that even though there was a family relationship, the new tenant intended to buy tenant's fixtures for the amount stated. Loft Board: Landlord wins. The new tenant was a law student with no assets and substantial outstanding school loans. It wasn't credible that tenant expected the new tenant to pay $44,000 for fixtures. Given the new tenant's position and his family relationship with tenant, it was more likely that the fixtures were intended as a gift. The Loft Board barred the sale.

[60-62 East 11th Street Corp.: Loft Bd. Order No. 1377 (12/24/92)]. 13-page document.