§ 1-01 Organization and Voting.
(a) Organization. The Loft Board (hereinafter referred to as "the Board") shall consist of no fewer than 5 and no more than 9 members, including the Commissioner of the Department of Buildings, serving ex officio as chair, the Commissioner of the Fire Department, serving ex officio as a member, and one representative of loft manufacturing interests, one representative of the real estate industry and one representative of loft residential tenants, respectively. All other members of the Board shall represent the public. The Board may conduct business with fewer than the full complement of its appointed members when one or more vacancies are created by the death, resignation, or inability of a member or members to continue serving on the Board for any reason, until the appointment of replacement(s) by the Mayor.
§ 1-02 Rules and Regulations, Method of Adoption.
The Board shall issue rules and regulations governing its procedures and the exercise of its powers under Article 7-C of the New York State Multiple Dwelling Law and Executive Order No. 129 of Mayor Michael R. Bloomberg, or any successor Executive Order thereto. Loft Board staff shall be responsible for drafting rules, regulations, guidelines and procedures at the direction of the Chair or by vote of the Board. In addition, draft rules, regulations, guidelines and procedures may be presented to the Board for consideration by Board members or other interested parties. Loft Board staff shall comply with § 1043 of the New York City Charter in the promulgation of all rules and regulations. All draft rules and regulations proposed shall be submitted to the Board for comment and review before they are published for comment. Draft rules and regulations may be modified at the direction of the Chair or by vote of the Board. Upon vote of the Board, rules and regulations shall be adopted and ordered into effect following periods for public notification and comment, mandated by § 1043 of the New York City Charter, and hearings when required by § 282(d) of Article 7-C of the New York State Multiple Dwelling Law, except that emergency regulations or guidelines may be adopted without prior public notification and comment. Following consideration of comments received and public testimony, the Board may modify or amend the proposed rules or regulations in response thereto.
§ 1-03 Meetings.
(a) The Board shall meet in regularly scheduled sessions. It may also meet in special sessions at the request of the Chair or by affirmative vote of 5 members.
§ 1-04 Minutes and Transcripts.
(a) Minutes shall be taken at every regular session of the Board and shall be made available to Board members and the public no later than two weeks from the date of a session.
§ 1-05 Public Access to Minutes and Records/Procedures.
Minutes of open and Executive sessions and all records of the Board available under Article 6 of the New York State Public Officers Law (The Freedom of Information Law) shall be available for public inspection, by mail or by appointment upon prior written request, at the offices of the New York City Loft Board, weekdays, between the hours of 10 a.m. and 4 p.m. and during other business hours of the office. Copies of all such minutes and records may be obtained by the public at a charge of 25 per page no bigger than 9 x 14 inches. Requests for inspection or for copies of materials available under the Freedom of Information Law should be addressed to: Records Access Officer, New York City Loft Board. When the Records Access Officer denies access to records in whole or in part, such determination may be appealed within 30 days by written application to: Records Access Officer, New York City Loft Board.
§ 1-06 Applications to the Loft Board.
(a) (1) All applications to the Loft Board concerning coverage, hardship claims, rent adjustments, fixture fee disputes, exemption, and any other matters within the purview of the Loft Board under Article 7-C of the Multiple Dwelling Law ("MDL"), must be submitted to the Office of the Loft Board, on forms approved by the Loft Board, together with any additional information as may be required. The forms may not be altered or re-typed. Except as otherwise described in the Loft Board rules, the applicant must submit 5 copies of the application, and shall be required to list, to the best of his or her knowledge, all affected parties when filing the application. The failure of an applicant to list all of the affected parties on an application may result in a delay in processing the application, or return of the application to the applicant as incomplete.
(2) Affected Parties.
(i) Affected parties for coverage, harassment and hardship claims shall include: owners, all tenants of record in the building, including residential, commercial and manufacturing tenants, and all occupants of the building, if different from tenants of record.
(ii) In addition to the parties listed in (i) above, affected parties for abandonment claims pursuant to 29 RCNY § 2-10 shall also include the current occupant of the unit alleged to be abandoned, the previous occupant alleged to have abandoned, and the unit and the previous occupant’s beneficiary to the estate, if applicable. (iii) For all other categories of applications, affected parties shall include the owner and such occupants as are necessary for a final resolution of the claim asserted in the application.
(3) The applicant may only have one claim per application. The application shall contain facts and arguments relevant to the claim raised in the application. The applicable application fee stated in 29 RCNY § 2-11 is due upon submission of the application. The application will not be considered filed, or be processed, until the application fee is received.
(2) Filing Applications with the Loft Board. The application and accompanying documents may be submitted to the Loft Board by (i) hand delivery, or (ii) regular mail. Applications will be considered filed on the day they are received by the Loft Board during business hours, as defined in subparagraph (e) below. The applicant’s filing with the Loft Board must include:
(i) 5 copies of the application, at least one of which must have an original signature;
(ii) one copy of the instruction sheet sent to each affected party; and
(iii) proof of service of the application to the affected parties (the United States Post Office-stamped copy of the certificate of mailing). Except as set forth in subparagraph (b)(4) below, if any of the documentation required by this section is not filed at the time the application is filed with the Loft Board, the application will be considered incomplete. The Loft Board may return the application and the application fee, if applicable, to the applicant without further notice.
(3) Service shall be deemed to be completed 5 calendar days after the date of mailing.
(4) Waiver of Service for Indigent Persons. An applicant may request a waiver from the Loft Board staff of the requirement to serve all affected parties on the basis of indigence. Upon completion of the application, the applicant must submit 5 copies of the application, at least one of which must have the original signature, plus 1 copy for each affected party listed on the application. In addition, the application must be accompanied by a written request that the Loft Board staff, rather than the applicant, serve each affected party due to the applicant’s indigence. The request must be accompanied by an affidavit setting forth the amount and all sources of applicant’s income, any property owned and the value thereof, and any other facts that would be helpful to the Loft Board staff in determining whether the request should be approved. If the Loft Board staff approves the request, it shall notify the applicant in writing, and serve each affected party with a copy of the application and instruction sheet by regular mail. If the Loft Board staff denies the request, it shall notify the applicant in writing and return the copies of the application submitted for each affected party so that the applicant may serve the affected parties in accordance with the procedure set forth in subparagraph (b)(2).
(2) The answer shall contain facts and arguments relevant to the issues raised in the application.
(1) Defaults. If an affected party fails to file an answer to any application within the applicable time period in the Loft Board rules and fails to file a timely request for an extension, the party will be in default and will be barred from filing an answer or offering any evidence in its defense. The affected party’s defensive case will not be heard as a result of its failure to file an answer. The Loft Board’s staff, the Loft Board’s hearing examiner or the Administrative Law Judge assigned to the case will advise the affected party in writing of the default and that an inquest will be held unless the party moves for relief from the default as specified in 29 RCNY § 1-06(i)(2) below. This provision will not apply where an extension to file an answer has been requested or granted before the expiration of the answer period.
(2) An affected party who is barred from filing an answer will have 30 calendar days after the mailing date of the default determination to move for relief from the default determination. The party submitting the motion must establish before the Loft Board’s staff, the Loft Board’s hearing examiner or Administrative Law Judge assigned to the case that good cause existed for the failure to file an answer. Any motion for relief from a default determination must be received by the Loft Board’s staff, the Loft Board’s hearing examiner or the Administrative Law Judge assigned to the case, with proof of service as defined in 29 RCNY § 1-06(e) on the applicant, within the specified time period. Good cause can be established by proof of a reasonable explanation for failure to file an answer and a summary of a non-frivolous defense to be presented in the case. The Administrative Law Judge, the Loft Board staff or the Loft Board’s hearing examiner assigned to the case may allow the applicant to file opposition papers to the motion to vacate the default determination. Where the affected party fails to file an answer and no timely motion to vacate the default determination has been received by the Administrative Law Judge, Loft Board’s staff or Loft Board’s hearing examiner, the case will proceed and any party in default will not be permitted to file an answer or present its defensive case.
(3) Following the issuance of a Loft Board order, an affected party who has not moved for relief from a default determination as set forth in subparagraph (2) above and is aggrieved by the default determination may move to reopen the proceeding by filing an application for reconsideration with the Loft Board within 30 calendar days following the mailing date of the order. Such application will be granted only if the Loft Board finds that the affected party has established (i) extraordinary circumstances for the failure to file an answer and (ii) substantial likelihood of success on the merits.
(4) An applicant must present a prima facie case at a hearing or inquest demonstrating entitlement to the relief sought in the application whether or not an answer has been filed for the application. The applicant must prove his/her case by a preponderance of the evidence for the relief requested in the application.
(2) Hearings.
(i) All parties shall be afforded an opportunity for a hearing within a reasonable time. The Loft Board shall provide at least 15 calendar days notice to the applicant and all affected parties who have filed an answer. The notice of hearing shall include a statement of the nature of the proceeding and time and place it will be held, the legal authority and jurisdiction under which the hearing is to be held, a reference to the particular sections of law and rules involved, and a short and plain statement of the matters to be adjudicated.
(ii) The Executive Director or designated staff member, shall determine whether an informal conference or a hearing shall be conducted before a staff hearing examiner, a Loft Board’s staff member or before an Administrative Law Judge at the Office of Administrative Trials and Hearings (OATH). All hearings shall be conducted in accordance with procedures set forth in these rules. OATH’s rules of practice, whether procedural or substantive, may only apply to Loft Board cases if the issue is not the subject of any rule in Title 29 of the Rules of the City of New York. Where a hearing is conducted at OATH, the Administrative Law Judge shall submit recommended findings of fact and a recommended decision to the Loft Board, which shall make the final findings of fact and decision. Where a hearing is conducted by a Loft Board’s staff hearing examiner, such a hearing will be conducted by a staff hearing examiner who is assigned solely to adjudicative duties, who may take testimony under oath and consider affidavits and other proofs. Formal rules of evidence shall not apply to such hearings, except that effect shall be given to the rules of privilege recognized by law. All hearings shall be electronically recorded, and a duplication of the recording or transcript of the proceedings shall be available to any party upon request and agreement to pay the fee assessed for the duplication. At the hearing, the parties shall be afforded the opportunity to be represented by counsel, to issue subpoenas or to request that a subpoena be issued, to call witnesses, to cross-examine opposing witnesses and to present oral and written arguments on the law and facts.
(3) Parties shall be advised of their right to representation by counsel and of their right to cross-examine witnesses at hearings.
(4) When a party fails to furnish documents requested by the Administrative Law Judge, the Loft Board, or its staff, or fails to submit to examination or cross-examination, inferences adverse to his or her position may be drawn by the fact-finder from such refusal.
(5) Where informal conferences conducted by an Administrative Law Judge or the Loft Board’s staff result in the resolution of disputes to the mutual satisfaction of the parties, a stipulation of agreement shall be entered into by the parties and reviewed by the Executive Director. A summary report of such matters including the type of application, the issues presented and the resolution reached shall be made to the Loft Board, which may direct that a particular matter be reopened and remanded for further investigation. These cases shall appear on the summary calendar of the Loft Board’s agenda. Upon issuance of an order, such summary cases shall be deemed closed.
(2) Additional requests for adjournments must be made in writing to the Loft Board’s hearing examiner, staff member or Administrative Law Judge assigned to the case, with notice to all affected parties or applicant, at least 5 calendar days before the date of the scheduled conference or hearing. The reason for the adjournment request must be provided at the time of the request. The adjournment will be granted at the sole discretion of the Loft Board hearing examiner, Loft Board staff member or Administrative Law Judge assigned to the case.
(3) When any party adjourns more than 2 consecutive schedule d conferences or hearings, the Loft Board hearing examiner, Loft Board staff member or Administrative Law Judge may direct that the next scheduled hearing or conference be marked final. This notice shall be sent to the parties in writing.
(4) If an applicant does not appear for a conference or hearing which has been marked final against him/her, the application may be dismissed for failure to prosecute unless the Loft Board hearing examiner, Loft Board staff member or Administrative Law Judge approves a written request for its reinstatement which must be made within 30 calendar days from the conference or hearing date. The written request for reinstatement must provide a showing of extraordinary circumstances which prevented the applicant’s attendance at the hearing or conference.
(5) If an affected party does not appear for a conference or hearing marked final against him/her, the answer may be stricken and the affected party may be barred from presenting its defensive case unless the Loft Board hearing examiner, Loft Board staff member or Administrative Law Judge assigned to the case approves a written request for its reinstatement, which must be made within 30 calendar days from the conference or hearing date. The written request for reinstatement must be served on the applicant and must provide a showing of extraordinary circumstances which prevented the affected party’s attendance at the hearing or conference.
(6) In a case in which an answer has been stricken or an affected party is barred from filing an answer and presenting its defensive case, the applicant must present a prima facie case at an inquest before the assigned hearing examiner, Loft Board staff member or Administrative Law Judge, demonstrating entitlement to the relief sought in the application by a preponderance of the evidence.
(2) If an affected party fails to appear for a hearing and an inquest is held, the conclusions of which are adverse to his or her contentions, the affected party may move to vacate the default within 30 calendar days after the mailing date of the report and recommendation, upon good cause shown. Good cause can be established by proof of a reasonable explanation for the affected party’s failure to appear on the date of the hearing and a summary of the non-frivolous defense to be presented at the hearing. Failure to provide a reasonable explanation for the affected party’s failure to appear at the hearing and a summary of the non-frivolous defense may result in the denial of the request to vacate the default. Any motion to vacate the default received 30 or more calendar days after the mailing date of the report and recommendation will be denied as untimely, except that the Executive Director may grant such motion, in her/his discretion, if extraordinary circumstances for the non-appearance and a substantial likelihood of success on the merits can be shown.
(1) a description of the application, and the names of the parties, their counsel and other persons affected by the application;
(2) a summary of the facts disputed, and the facts found during any investigation and of testimony and other proofs taken at the hearing or inquest;
(3) copies of the application and of all affidavits, memoranda, and briefs submitted by the parties;
(4) a recommendation to the Loft Board regarding disposition of the application, with a summary of the factual and legal bases for such recommendation. A copy of all written recommended decisions shall be mailed forthwith to each party.
§ 1-06.1 Limitations on Applications.
(a) Filing deadline. In accordance with the terms and provisions of § 282-a of the MDL, a coverage application or an initial registration application form for coverage pursuant to Article 7-C must be filed with the Loft Board on or before March 11, 2014, which is 6 months following the effective date of this subdivision (a).
§ 1-07 Reconsideration of Loft Board Determination.
(a) Reconsideration Application.
(1) General Requirements. The procedures and requirements set forth in 29 RCNY § 1-06 apply to reconsideration applications filed pursuant to this section, except as otherwise stated in this section.
(2) Basis of the Reconsideration Application. The Loft Board, upon the application of a party aggrieved by a determination of the Loft Board, may, in its sole discretion, reconsider its determination. An application for reconsideration will be granted only under the following extraordinary circumstances: (i) an allegation of denial of due process or material fraud in the prior proceedings, (ii) an error of law, (iii) an erroneous determination based on a ground that was not argued by the parties at the time of the prior proceeding and that the parties could not have reasonably anticipated would be the basis for a determination, or (iv) discovery of probative, relevant evidence which could not have been discovered at the time of the hearing despite the exercise of due diligence. In addition, pursuant to 29 RCNY § 1-06(i), an affected party who has not moved for relief from a default determination and who is aggrieved by the default determination may move to reopen the proceeding by filing an application for reconsideration with the Loft Board within 30 calendar days following the mailing date of the order. Such reconsideration application will be granted only if the Loft Board finds that the affected party has established (i) extraordinary circumstances for the failure to file an answer and (ii) substantial likelihood of success on the merits.
(1) Service and filing requirements set forth in 29 RCNY § 1-06(b) apply to reconsideration applications filed pursuant to this section. These requirements include but are not limited to the following:
(i) An aggrieved party must file with the Loft Board: (A) 5 copies of his or her reconsideration application, at least one of which must have an original signature, (B) one copy of the instruction sheet sent to each affected party to the prior proceeding, and (C) proof of service of the reconsideration application to the affected parties in the prior proceeding;
(ii) Payment of the application fee required by 29 RCNY § 2-11(b)(15) must be made upon submission of the reconsideration application to the Loft Board; and
(iii) Service of the application must be made in accordance with the provisions of 29 RCNY § 1-06(b)(1).
(2) To be considered timely, a complete reconsideration application must be received by the Loft Board within 30 calendar days after the mailing date of the determination sought to be reconsidered. The application must specify the questions presented for reconsideration and the facts and points of law relied upon as a basis for seeking reconsideration, and must include a copy of the determination sought to be reconsidered.
(i) Unless otherwise stated here, the service and filing requirements set forth in 29 RCNY § 1-06(c) - (f) apply to answers to reconsideration applications filed pursuant to this section. In accordance with 29 RCNY § 1-06(e), any affected party submitting an answer to the reconsideration application must file 5 copies of the original answer and any accompanying documents, and proof of service of the answer on the applicant for reconsideration, with the Loft Board.
(ii) The answer period is 20 calendar days after service of the reconsideration application on the affected party is deemed complete pursuant to 29 RCNY § 1-06(b)(3). The answer must contain the facts and arguments relevant to the issues raised in the reconsideration application.
(2) Issuance of Orders. Pursuant to § 1046(f) of the City Administrative Procedure Act, prior to the issuance of the final order, the Loft Board will mail a copy of its proposed order to 1) the party or parties who filed the reconsideration application, 2) the parties who filed an answer, and 3) all affected parties in the underlying proceeding. The Loft Board will mail a copy of its final order, within a reasonable time from the date of the order, to 1) the party or parties who filed the reconsideration application, 2) the parties who filed an answer, and 3) all affected parties in the underlying proceeding.
(1) Modifies or revokes the underlying determination, the revocation or modification is deemed the final agency determination for purposes of judicial review;
(2) Denies the reconsideration application, the underlying determination is deemed the final agency determination for purposes of judicial review, and the date of the denial of the reconsideration application is deemed the date of the final agency determination; or
(3) Decides the reconsideration application by remanding the matter to the assigned staff hearing examiner or Administrative Law Judge at the Office of Administrative Trials and Hearings (OATH) for further proceedings, neither the underlying order nor the remand order constitutes a final agency determination for purposes of judicial review, and no judicial review may be sought until such time as the Loft Board issues a final agency determination following the remand.
§ 1-07.1 Appeal from a Determination of the Loft Board Staff or the Environmental Control Board, or Determination of a Hearing Officer Under 29 RCNY § 2-04.
(1) Appeal from a Determination of the Loft Board Staff or Hearing Officer.
(1) A person aggrieved by a written determination of the Loft Board staff, with respect to any matter that is not required by these rules to be determined by the full Loft Board, or by a determination of a Loft Board hearing officer with respect to housing maintenance standard violations under 29 RCNY § 2-04, may appeal such determination to the Loft Board. The determination of the Loft Board pursuant to such appeal constitutes the final agency determination from which judicial review may be sought.
(2) Who has the Right to Appeal? For the purposes of this section, a “person aggrieved” by a written determination of the Loft Board staff means the owner or any residential tenant of the building in question whose rights may be affected by the determination. For the purposes of this section, a “person aggrieved by a determination of a hearing officer with respect to housing maintenance standard violations under 29 RCNY § 2-04” means the owner of the building in question or the Loft Board staff, in his or her capacity as prosecutor of housing maintenance standard violations.
(1) A person aggrieved by a determination as set forth in paragraph (a) of this subdivision must file with the Loft Board 5 copies of an appeal application, along with proof of service of the appeal application upon the affected parties to the prior proceeding and, except where the Loft Board staff is the appellant, the application fee required by 29 RCNY § 2-11(b)(14). Service of the application must be made in accordance with the provisions of 29 RCNY § 1-06(b). To be considered timely, an appeal application must be received by the Loft Board within 45 calendar days of the date of mailing of the determination sought to be appealed. The application must specify the questions presented for appeal and the facts and points of law relied upon as a basis for seeking appeal.
(2) Who is an Affected Party in an Appeal? For the purposes of this section, an “affected party” in an appeal from a staff determination means the owner or any residential tenant of the building in question whose rights may be affected by the determination. For the purposes of this section, an “affected party” in an appeal from a determination of a hearing officer with respect to housing maintenance standard violations under 29 RCNY § 2-04 means the owner of the building in question or the Loft Board staff, in his or her capacity as prosecutor of housing maintenance standard violations.
(2) Appeal from a Determination of the Environmental Control Board. An appeal from a determination of an Environmental Control Board (“ECB”) hearing examiner issued pursuant to a Loft Board rule must be brought before the ECB in accordance with the applicable rules and provisions established by the ECB, as set forth in 48 RCNY Chapter 3, and must be in a form prescribed by the ECB, which may be obtained at www.nyc.gov/ecb.
§ 1-08 Ex Parte Communications on Pending Applications.
(a) After an application has been filed with the Loft Board, an employee of the Board assigned to conduct a conference or hearing, or make findings of fact and recommendations on that application, shall not communicate on any substantive matter involving the merits of the application with one party to a dispute without notice and opportunity for all parties to participate.
§ 1-09 Action by the Board on Its Own Initiative.
The Board on its own initiative may commence appropriate proceedings or investigations pursuant to its powers or duties under Article 7-C of the Multiple Dwelling Law, including, but not limited to, findings, determinations or enforcement proceedings concerning coverage, hardship claims, rent adjustments, fixture fee disputes, exemptions and compliance with requirements of Article 7-C, including the minimum housing maintenance standards promulgated by the Board. Prior to making a finding or determination pursuant to Article 7-C, the Board shall afford the party against whom a proceeding is directed an opportunity to be heard on not less than 10 days notice by regular mail.
§ 1-10 Administrative Authority and Correspondence.
Administrative authority is vested in the Executive Director of the staff, under the direction of the Chair. Official correspondence regarding administrative matters shall be signed by the Executive Director or by his or her designees. Official correspondence to the Board may be addressed to the New York City Loft Board or to the attention of the Chair or the Executive Director at the New York City Loft Board.
§ 1-11 Petitioning Board to Adopt Rules.
(a) Definitions.
Persons. “Persons” shall mean an individual, partnership, corporation or other legal entity, and any individual or entity acting in a fiduciary or representative capacity.
Petition. “Petition” shall mean a request or application for the Loft Board to adopt a rule.
Petitioner. “Petitioner” shall mean the person who files a petition.
Rule. “Rule” shall have the same meaning set forth in Section 1041(5) of the New York City Charter.
(1) Any person may petition the Loft Board to consider the adoption of rules.
(2) The petition must contain the following information:
(i) The proposed language for the rules to be adopted;
(ii) A statement of the Loft Board’s authority to promulgate the rules and their purpose;
(iii) The petitioner’s argument in support of adopting the rules;
(iv) The period of time the rule should be in effect;
(v) The name, address and telephone number of the petitioner;
(vi) The signature of the petitioner.
(3) All petitions should be typewritten.
(4) The Loft Board is authorized to adopt a form petition. Every petition shall be submitted on such form unless such a form is not available from the Loft Board, in which case the petition shall be filed on plain white, durable paper which shall be eleven by eight and one-half inches in size.
(5) Petitions shall be mailed or delivered to the offices of the Loft Board marked to the attention of the Chair or the Executive Director.
(6) Upon receipt of a petition submitted in proper form, the petition shall be stamped with the date it was received and shall be assigned a processing number. The petition shall then be forwarded to the Chair who may, at his or her discretion, reject the petition or present the petition for consideration by the Board. If the Chair rejects the petition, he or she must do so by written notice stating the reasons for denial. Copies of the Chair’s notice rejecting the petition, together with a copy of the petition, shall be presented to the Board at the next regularly scheduled session, after which any Board member may present the petition for consideration by the Board.
(7) Within sixty days from the date the petition was received by the Loft Board, the Loft Board shall either deny any petition not preciously rejected by the Chair by written notice stating the reasons for denial, or shall state in writing the Loft Board’s intention to grant the petition and to initiate rulemaking by a specified date. In proceeding with such rulemaking, the Loft Board shall not be bound by the language proposed by petitioner, but may amend or modify such proposed language at the Loft Board’s discretion.
(8) The Loft Board’s decision to deny or grant a petition is final and shall not be subject to judicial review.
§ 2-01 Code Compliance Deadlines, the Narrative Statement Process, Code Compliance Work and Removal from the Loft Board’s Jurisdiction.
(a) Code compliance timetable for Interim Multiple Dwellings (IMD's). The owner of any building, structure or portion thereof that meets the criteria for an IMD set forth in § 281 of Article 7-C and Loft Board coverage regulations, shall comply with the code compliance deadlines set forth below. Any building or unit that is not covered by Article 7-C because of the denial of a grandfathering application or expiration of study area status is not required to be legalized pursuant to these regulations, unless either the area in which the building is located is rezoned to permit residential use or a unit or units at the building qualify for coverage pursuant to M.D.L. § 281(4) or § 281(5). However, the building must still comply with all other applicable laws and regulations. Definitions. When used in this section, the following definitions apply, unless context clearly dictates otherwise:
“Alteration application” means the work application form filed with the Department of Buildings of the City of New York (“DOB”) which describes the work to be undertaken that will result in obtaining a final certificate of occupancy for an interim multiple dwelling (“IMD”) unit, as defined in § 281 of the Multiple Dwelling Law and these rules, (“covered unit”) for residential use or joint living-work quarters for artists usage.
“Alteration permit,” also referred to as “building permit” or “work permit” means a document issued by DOB authorizing the owner to make the alterations set forth in the approved alteration application which are necessary to obtain a residential certificate of occupancy for a covered unit.
“Alternate plan application” means an occupant’s alteration application and associated legalization plan filed with the DOB pursuant to 29 RCNY § 2-01(d)(2)(viii).
“Legalization plan” means the construction documents, as defined in § 28-101.5 of the Administrative Code, as may be amended, including but not limited to architectural, structural, detailed drawings, and other required plans submitted to the DOB with the alteration application as defined above.
“Month” means 30 calendar days.
“Narrative statement” means a document that describes in plain language the proposed alterations in the alteration application and legalization plan and meets the requirements provided in 29 RCNY § 2-01(d)(2)(v).
“Occupant,” unless otherwise provided, means a residential occupant qualified for the protections of Article 7-C, any other residential tenant, or any nonresidential tenant.
Code Compliance Deadlines. The failure of an owner to meet any of the code compliance deadlines provided below does not relieve the owner of its obligations to comply with these requirements nor does it relieve the owner of its duty to exercise all reasonable and necessary action to so comply.
Paragraphs (1) through (4) of this subdivision implement the initial code compliance deadlines that applied pursuant to § 284(1)(i) of Article 7-C before the enactment of later amendments, and paragraphs (5) through (8) reflect those amendments, as set forth in § 284(1)(ii) through (v). The deadlines set forth in paragraphs (1) through (8) of this subdivision do not apply to a building or a portion of a building subject to Article 7-C pursuant to MDL § 281(5).
Paragraphs (9) and (10) of this subdivision implement the current code compliance deadlines set forth in MDL § 284(1)(vi) for buildings or portions of buildings subject to Article 7-C pursuant to MDL § 281(5). Paragraph (9) implements the current code compliance deadlines for a building or portion of a building covered by Article 7-C pursuant to chapters 135 or 147 of the laws of 2010. Paragraph (10) implements the current code compliance deadlines for a building or portion of a building covered by Article 7-C pursuant chapter 4 of the laws of 2013.
(1) Deadlines for filing alteration applications.
(i) Code compliance timetable for buildings in which all residential units are as of right. The owner of an IMD that contains only residential units in which residential use is permitted as of right under the Zoning Resolution shall have filed an alteration application by March 21, 1983.
(ii) Buildings with 3 or more as of right units and additional units eligible for grandfathering. The owner of an IMD that, on December 1, 1981, contained 3 or more residential units as of right and 1 or more units eligible for coverage by use of one of the grandfathering procedures set forth in subsection 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall have filed an alteration application for all covered as of right residential units by March 21, 1983, and
(B) Following the grandfathering approval of any additional residential units, the owner shall amend the existing alteration application to reflect approval of the grandfathering application for the additional unit or units within a month from such approval or within a month of the effective date of these regulations, whichever is later.
(iii) Buildings with fewer than 3 as of right units and additional units eligible for grandfathering. The owner of an IMD that, on December 1, 1981, contained fewer than three residential units as of right and 1 or more units eligible for coverage by use of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall file an alteration application for all covered residential units within 9 months after approval of the grandfathering application of the unit that becomes the third covered residential unit, and
(B) Following the grandfathering approval of the unit that becomes the third eligible residential unit, the owner of a building with additional units eligible for grandfathering shall amend the existing alteration application to reflect approval of the grandfathering application for the additional unit or units within a month after such approval or within a month after the initial timely filing of the alteration application referred to in 29 RCNY § 2-01(a)(1)(iii)(A) above, whichever is later.
(iv) Buildings in study areas rezoned to permit as of right residential use. The owner of an IMD located in an area designated by the Zoning Resolution as a study area that is rezoned to permit residential use as of right shall file an alteration application within 9 months after the effective date of such rezoning.
(v) Buildings in study areas rezoned to permit residential use with 3 or more as of right units and additional units eligible for grandfathering. The owner of an IMD that is located in an area designated by the Zoning Resolution as a study area and that, as a result of rezoning, contains 3 or more residential units as of right and 1 or more units eligible for coverage by use of one of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08 “Grandfathering” (i) and (ii):
(A) Shall file an alteration application for all covered as of right residential units within 9 months after the effective date of such rezoning, and
(B) Following the grandfathering approval of any additional residential units, the owner shall amend the existing alteration application to reflect approval of the grandfathering application for the additional unit or units within a month after such approval.
(vi) Buildings in study areas rezoned to permit residential use with fewer than 3 as of right units and additional units eligible for grandfathering.
The owner of an IMD that is located in an area designated by the Zoning Resolution as a study area and that, as a result of rezoning, contains fewer than 3 residential units as of right and 1 or more units eligible for coverage by use of one of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall file an alteration application for all covered residential units within 9 months after approval of the grandfathering application of the unit that becomes the third covered residential unit, and
(B) Following the grandfathering approval of the unit that becomes the third eligible residential unit, the owner of a building with additional units eligible for grandfathering shall amend the existing alteration application to reflect approval of the grandfathering application for the additional unit or units within a month after such approval or within a month after the initial timely filing of the alteration application referred to in 29 RCNY § 2-01(a)(1)(vi)(A) above, whichever is later.
(2) Deadlines for obtaining permits.
(i) Code compliance timetable for buildings in which all residential units are as of right. The owner of an IMD that contains only residential units in which residential use is permitted as of right under the Zoning Resolution shall take all necessary and reasonable actions to obtain a building permit within 6 months after the effective date of these regulations.
(ii) Buildings with 3 or more as of right units and additional units eligible for grandfathering. The owner of an IMD that, on December 1, 1981, contained 3 or more residential units as of right and 1 or more units eligible for coverage by use of one of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall take all necessary and reasonable actions to obtain a building permit for all covered residential units within 6 months after the effective date of these regulations, and
(B) Following the grandfathering approval of any additional residential units, the owner shall take all necessary and reasonable actions to obtain approval of the amended alteration application for the additional units within 6 months after such grandfathering approval or within 6 months after the effective date of these regulations, whichever is later.
(iii) Buildings with fewer than 3 as of right units and additional units eligible for grandfathering. The owner of an IMD that, on December 1, 1981, contained fewer than 3 residential units as of right and 1 or more units eligible for coverage by use of one of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall take all necessary and reasonable actions to obtain a building permit for all covered residential units within 6 months after the effective date of these regulations or within 6 months after the timely filing of an alteration application, whichever is later, and
(B) Following the grandfathering approval of the unit that becomes the third eligible residential units, the owner of a building with additional units eligible for grandfathering shall take all necessary and reasonable actions to obtain approval of the amended alteration application for the additional units within 6 months after such grandfathering approval or within 6 months after the effective date of these regulations, whichever is later.
(iv) Buildings in study areas rezoned to permit as of right residential use. The owner of an IMD located in an area designated by the Zoning Resolution as a study area that is rezoned to permit residential use as of right shall take all necessary and reasonable actions to obtain a building permit for all covered residential units within 6 months after the effective date of these regulations or within 6 months after the timely filing of the alteration application, whichever is later.
(v) Buildings in study areas rezoned to permit residential use with 3 or more as of right units and additional units eligible for grandfathering. The owner of an IMD that is located in an area designated by the Zoning Resolution as a study area and that, as a result of rezoning, contains 3 or more residential units as of right and 1 or more units eligible for coverage by use of one of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall take all necessary and reasonable actions to obtain a building permit for all covered residential units within 6 months after the effective date of these regulations or within 6 months after the timely filing of the alteration application, whichever is later, and
(B) Following the grandfathering approval of any additional residential units, the owner shall take all necessary and reasonable actions to obtain approval of the amended alteration application for the additional units within 6 months after such grandfathering approval.
(vi) Buildings in study areas rezoned to permit residential use with fewer than 3 as of right units and additional units eligible for grandfathering. The owner of an IMD that is located in an area designated by the Zoning Resolution as a study area and that, as result of rezoning, contains fewer than three residential units as of right and one or more units eligible for coverage by use of one of the grandfathering procedures set forth in § 281(2)(i) or (iv) of Article 7-C, as defined in 29 RCNY § 2-08(a) “Grandfathering” (i) and (ii):
(A) Shall take all necessary and reasonable actions to obtain a building permit for all covered residential units within 6 months after the effective date of these regulations or within 6 months after the timely filing of the alteration application, whichever is later, and
(B) Following the grandfathering approval of the unit that becomes the third eligible residential unit, the owner of a building with additional units eligible for grandfathering shall take all necessary and reasonable actions to obtain approval of the amended alteration application for the additional units within 6 months after such grandfathering approval.
(3) Deadlines for Article 7-B compliance. The owner of an IMD shall achieve compliance with the fire and safety standards of Article 7-B of the M.D.L. for all covered residential units within 18 months after a building permit has been obtained or within 18 months after the effective date of these regulations, whichever is later. Or the owner may elect to comply with other local building codes or provisions of the M.D.L. that provide alternative means of meeting the fire and safety standards of Article 7-B (pursuant to § 287 of Article 7-C) within 18 months after a building permit has been obtained or within 18 months after the effective date of these regulations, whichever is later. Where an owner is required to amend the existing alteration application to reflect approval of grandfathering applications for additional units pursuant to 29 RCNY § 2-01(a)(1)(ii)(B), (iii)(B), (v)(B) or (vi)(B) above, the owner shall achieve compliance with the fire and safety standards of Article 7-B, or with alternative building codes or provisions of the M.D.L. for the additional grandfathered unit or units within 18 months after the timely approval of the amended alteration application or within 18 months after the effective date of these regulations, whichever is later. Issuance of a temporary certificate of occupancy shall be considered the equivalent of Article 7-B compliance or compliance with alternative building codes or provisions of the M.D.L.
(4) Deadlines for obtaining a final certificate of occupancy. The owner of an IMD shall take all necessary and reasonable actions to obtain a final certificate of occupancy as a class A multiple dwelling for all covered residential units within 6 months after compliance with the fire and safety standards of Article 7-B, alternative building codes or provisions of the M.D.L. has been achieved, or within 6 months after a temporary certificate of occupancy has been obtained. The owner of an IMD that contains additional units subject to 29 RCNY § 2-01(a)(1)(ii)(B), (iii)(B), (v)(B) or (vi)(B) above, shall take all necessary and reasonable actions to obtain a final certificate of occupancy as a class A multiple dwelling for the additional unit or units within 6 months after the date such unit or units come into compliance with the fire and safety standards of Article 7-B, alternative building codes, or provisions of the M.D.L., or within 6 months after the date such unit or units are covered by a temporary certificate of occupancy.
(5) Notwithstanding the provisions of subdivisions (a)(1) through (4) of this section, the owner of an IMD who has not been issued a final certificate of occupancy as a class A multiple dwelling for all covered residential units on or before June 21, 1992 shall:
(i) File an alteration application by October 1, 1992; and
(ii) Take all reasonable and necessary action to obtain a building permit by October 1, 1993; and
(iii) Achieve compliance with the fire and safety standards of Article 7-B of the M.D.L. for all covered residential units by April 1, 1995, or within 18 months after an approved alteration permit has been obtained, whichever is later. The owner may, alternatively, elect to comply with other building codes or provisions of the M.D.L. that provide alternative means of meeting the fire and safety standards of Article 7-B (pursuant to M.D.L. § 287) by April 1, 1995 or within 18 months after an approved alteration permit has been obtained, whichever is later; and
(iv) Take all reasonable and necessary actions to obtain a final certificate of occupancy as a class A multiple dwelling for all covered residential units by October 1, 1995, or within 6 months after achieving compliance with the fire and safety standards of Article 7-B, alternative building codes, or provisions of the M.D.L., whichever is later.
(6) Notwithstanding the provisions of subdivisions (a)(1) through (a)(5) of this section, the owner of an IMD who has not complied with the requirements of M.D.L § 284(1)(i) or (ii) by June 30, 1996 shall:
(i) File an alteration application by October 1, 1996; and
(ii) Take all reasonable and necessary action to obtain an approved alteration permit by October 1, 1997; and
(iii) Achieve compliance with the fire and safety standards of Article 7-B of the M.D.L. for all covered residential units by April 1, 1999 or within 18 months after obtaining an approved alteration permit, whichever is later; and
(iv) Take all reasonable and necessary action to obtain a certificate of occupancy as a class A multiple dwelling for all covered residential units by June 30, 1999, or within 3 months after achieving compliance with the fire and safety standards of Article 7-B of the M.D.L., whichever is later.
(v) As an alternative to complying with the requirements of subparagraph (iii) of this subdivision, an owner may, pursuant to M.D.L. § 287, elect to comply with other local building codes or provisions of the M.D.L. that provide alternative means of meeting the fire and safety standards of Article 7-B by April 1, 1999 or within 18 months after obtaining an approved alteration permit, whichever is later.
(7) Notwithstanding the provisions of subdivisions (a)(1) through (a)(6) of this section, the owner of an IMD who has not complied with the requirements of M.D.L. § 284(1)(i), (ii), or (iii) by June 30, 1999 shall:
(i) File an alteration application by September 1, 1999; and
(ii) Take all reasonable and necessary actions to obtain an approved alteration permit by March 1, 2000; and
(iii) Achieve compliance with the fire and safety standards of Article 7-B of the M.D.L. for all covered residential units by May 1, 2002, or within 12 months after obtaining an approved alteration permit, whichever is later; and
(iv) Take all reasonable and necessary action to obtain a certificate of occupancy as a class A multiple dwelling for all covered residential units by May 31, 2002, or within 1 month after achieving compliance with the fire and safety standards of Article 7-B of the M.D.L., whichever is later.
(v) As an alternative to complying with the requirements of subparagraph (iii) of this subdivision, an owner may, pursuant to M.D.L. § 287, elect to comply with other local building codes or provisions of the M.D.L. that provide alternative means of meeting the fire and safety standards of Article 7-B by May 1, 2002 or within 12 months after obtaining an approved alteration permit, whichever is later.
(8) Notwithstanding the provisions of subdivisions (a)(1) through (a)(7) of this section, the owner of an IMD who has not complied with the requirements of M.D.L. § 284(1)(i), (ii), (iii) or (iv) by June 21, 2010 must:
(i) File an alteration application by September 1, 1999; and
(ii) Take all reasonable and necessary action to obtain an approved alteration permit by March 1, 2000; and
(iii) Achieve compliance with the fire and safety standards of Article 7-B of the MDL for all covered residential units by June 1, 2012, or within 12 months after obtaining an approved alteration permit, whichever is later; and
(iv) Take all reasonable and necessary action to obtain a final certificate of occupancy as a class A multiple dwelling for all covered residential units by July 2, 2012, or within 1 month after achieving compliance with the fire and safety standards of Article 7-B of the MDL, whichever is later.
(v) As an alternative to complying with the requirements of subparagraph (iii) of this paragraph (8), an owner may, pursuant to MDL § 287, elect to comply with other local building codes or provisions of the MDL that provide alternative means of meeting the fire and safety standards of Article 7-B by June 1, 2012 or within 12 months after obtaining an approved alteration permit, whichever is later.
(9) 2013 amended code compliance timetable for buildings subject to Article 7-C pursuant to MDL § 281(5) as a result of the 2010 amendments to the Loft Law. The owner of a building, structure or portion of a building or structure that is covered by MDL § 281(5) and became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010 must:
(i) File an alteration application by March 21, 2011; and
(ii) Take all reasonable and necessary actions to obtain an approved alteration permit by June 21, 2011; and
(iii) Achieve compliance with the fire and safety standards of Article 7-B of the MDL for all covered residential units within 18 months after obtaining an approved alteration permit; and
(iv) Take all reasonable and necessary action to obtain a final residential certificate of occupancy for all covered units by December 21, 2012.
(v) As an alternative to complying with the requirements of subparagraph (iii) of this paragraph (9), an owner may, pursuant to MDL § 287, elect to comply with other local building codes or provisions of the MDL that provide alternative means of meeting the fire and safety standards of Article 7-B by no later than 18 months from the issuance of the alteration permit.
(10) 2013 code compliance timetable for buildings subject to Article 7-C pursuant to MDL § 281(5) as a result of the 2013 amendments to the Loft Law. The owner of a building, structure or portion of a building or structure that is covered by MDL § 281(5) and became subject to Article 7-C pursuant to Chapter 4 of the Laws of 2013 must:
(i) File an alteration application on or before June 11, 2014; and
(ii) Take all reasonable and necessary actions to obtain an approved alteration permit on or before September 11, 2014; and
(iii) Achieve compliance with the fire and safety standards of Article 7-B of the MDL for all covered residential units within 18 months after obtaining an approved alteration permit; and
(iv) Take all reasonable and necessary action to obtain a final residential certificate of occupancy on or before March 11, 2016.
(v) As an alternative to complying with the requirements of subparagraph (iii) of this paragraph (10), an owner may, pursuant to MDL § 287, elect to comply with other local building codes or provisions of the MDL that provide alternative means of meeting the fire and safety standards of Article 7-B by no later than 18 months after the obtaining an alteration permit.
(1) Extensions of current deadlines. Pursuant to MDL § 284(1), an owner of an IMD building may apply to the Loft Board for an extension of time to comply with the code compliance deadlines provided in MDL § 284 in effect on the date of the filing of the extension application. An application for an extension must be filed before the deadline for which an extension is sought, except as provided in (i) through (iv) below:
(i) Where title to the IMD was conveyed to a “new owner” after the code compliance deadline has passed, the new owner may file an extension application for the passed deadline within 90 calendar days from acquiring title. For the purposes of this paragraph, “new owner” is defined as an unrelated entity or unrelated natural person(s) to whom ownership interest is conveyed for a bona fide business purpose and not for the purpose of evading the code compliance deadlines of the MDL or any other law. Prior to making a determination, the Executive Director may request additional information relevant to the extension application including, but not limited to, information regarding the applicant’s claim to be a new owner as defined in this paragraph.
(ii) Where the IMD is found to be covered under Article 7-C or registered as an IMD after the code compliance deadline has passed, the owner may file an extension application for the passed code compliance deadline within 90 calendar days after either a finding of Article 7-C coverage by the issuance of a Loft Board order, a court of competent jurisdiction or the issuance of an IMD registration number, whichever is first. If an owner appeals a finding of Article 7-C coverage, the owner may file an extension application 90 calendar days after the final determination of the appeal.
(iii) Where the owner of an IMD covered under Article 7-C pursuant to MDL § 281(5) requires an extension of the code compliance deadline provided in MDL § 284(1)(vi)(D) and 29 RCNY § 2-01(a)(9)(iv) and was not able to file an extension application prior to the deadline because such deadline was shortened from June 21, 2013 to December 21, 2012 by Chapter 4 of the Laws of 2013, the owner may file an extension application within 60 days after the effective date of this amended rule.
(iv) The IMD owner described in (i) and (ii) above may file an application for an extension of time of up to 1 year to comply with the most recently passed deadline.
(2) Statutory standard.
(i) The Executive Director will grant an extension of the code compliance deadlines in MDL § 284(1)(ii), (iii), (iv), (v) or (vi) only where an owner has demonstrated that it has met the statutory standards for such an extension, namely, that the necessity for the extension arises from conditions or circumstances beyond the owner’s control, and that the owner has made good faith efforts to meet the code compliance timetable requirements. Examples of such conditions or circumstances beyond the owner’s control include, but are not limited to, a requirement for a certificate of appropriateness for modification of a landmarked building, a need to obtain a variance from the Board of Standards and Appeals or the denial of reasonable access to an IMD unit.
In the case of an IMD owner described in 29 RCNY § 2-01(b)(1)(i) and (b)(1)(ii) above, the Executive Director may consider any action the owner has taken from the date that the title transferred to the new owner, or from the date of the determination of Article 7-C coverage, up to the date the owner filed the extension application when making a determination of whether the owner has exercised good faith efforts to satisfy the requirements.
The existence of conditions or circumstances beyond the owner’s control and good faith efforts must be demonstrated in the application by the submission of corroborating evidence. For example, copies of documents from the Landmarks Commission or the Board of Standards and Appeals, or an architect’s statement, may be filed with the extension application to show the existence of conditions or circumstances beyond the owner’s control and good faith efforts. Proof of the date that the title was transferred to the owner or proof of when the building was deemed covered under Article 7-C should be submitted with the application. Failure to include corroborating evidence in the application may be grounds for denial of the application without further consideration.
(ii) Pursuant to MDL §§ 284(1)(i) and 284(1)(vi), upon proof of compliance with Article 7-B, the Executive Director may twice extend the deadline for obtaining a final certificate of occupancy issued pursuant to MDL § 301, for a period of up to 12 months each, upon proper showing of good cause.
(3) Administrative Determination on the Extension Application. The owner of an IMD may apply to the Loft Board’s Executive Director for an extension to comply with the amended code compliance timetable. The Loft Board’s Executive Director will promptly decide each application for an extension. Where the Loft Board’s Executive Director determines that the owner has met the statutory standards for an extension, the Executive Director shall grant the minimum extension required by the IMD owner. Applications for extensions of code compliance deadlines will be limited to one extension per deadline in the amended code compliance timetable.
The Executive Director’s administrative determination will be mailed to the owner and to the affected parties identified in the application submitted pursuant to paragraph (4) of this subdivision below, and may be appealed to the Loft Board upon application by such owner or affected party.
An appeal of the administrative determination must be filed in accordance with 29 RCNY § 1-07.1.
(4) Form of application, filing requirements and occupant responses.
(i) An extension application filed pursuant to this subdivision (b) of 29 RCNY § 2-01 must be filed on the approved form and must meet the requirements of this subdivision, and 29 RCNY §§ 1-06 and 2-11 except as provided in this paragraph. An application for an extension must include a list of all residential IMD units in the building and must specify a date to which the applicant seeks to have the deadline extended. Failure to so specify in the application shall be grounds for dismissal of the application without prejudice.
(ii) The original extension application and 2 copies must be filed with the Loft Board. Prior to filing an extension application with the Loft Board, an owner shall serve a copy of the extension application upon the occupant of each IMD unit in the building in the manner described in 29 RCNY § 1-06(b). Any occupant of an IMD unit may file an answer to such application with the Loft Board within 20 calendar days from the date service of the application is deemed complete, as determined below in subparagraph (iv).
(iii) The occupant(s) of an IMD unit must serve a copy of the answer upon the owner prior to filing the answer with the Loft Board. Each answer filed with the Loft Board must include, at the time of filing, proof of service in the manner described in 29 RCNY § 1-06(d) and (e).
(iv) Service of the application by mail is deemed completed five calendar days following mailing. While an application filed under this subdivision is pending, an owner may amend the application one time to request a longer extension period than was originally sought in the application.
(1) The Loft Board, on its own initiative or in response to complaints, may commence a proceeding to determine whether an owner has violated the provisions of § 284(1) of the MDL or these code compliance rules. In addition, a residential occupant of an IMD building may file with the Loft Board an application seeking a Loft Board determination on whether the owner of the occupant’s building is in violation of the provisions of § 284(1) of the MDL or these code compliance rules.
(2) An owner who is found by the Loft Board to have violated the code compliance timetables set forth in MDL § 284(1) or any provision of 29 RCNY § 2-01(a): (i) may be subject to a civil penalty in accordance with 29 RCNY § 2-11.1 for each missed deadline; (ii) may be subject to all penalties provided in Article 8 of the MDL; and (iii) may be subject to a specific performance proceeding as provided in paragraph (4) below.
(3) Upon demonstration by an owner of insufficient funds to proceed with code compliance, the Loft Board may consider the lack of sufficient funds in mitigation of any fine to be imposed against the owner upon a finding of noncompliance. To obtain the benefit of the defense of insufficient funds, an owner must supply the Loft Board with an income and expense statement for the building verified by an independent certified public accountant, a written estimate of the cost of compliance with the cited deadline or requirement from a registered architect. If the funds generated by the building are not sufficient to cover the costs of the necessary compliance work, the owner must also supply a letter from two separate banks or mortgage brokers refusing to offer sufficient funds to comply, accompanied by copies of the owner’s applications for such funds, or if the lenders refuse to provide a written rejection, then the owner shall file an affidavit setting forth the basis for the owner’s belief that the applications have been rejected.
(4) If the Loft Board finds an owner in violation of the code compliance timetable set forth in MDL § 284(1) and 29 RCNY § 2-01(a), the Loft Board or any three occupants of separate, covered residential units in the building may apply to a court of competent jurisdiction for an order of specific performance directing the owner to satisfy all code compliance requirements set forth in this section.
(5) The owner of an IMD who is found by the Loft Board to have willfully violated the code compliance timetable of these regulations or to have violated the code compliance timetable more than once may be found to have harassed occupants with respect to such IMD in a harassment proceeding before the Loft Board.
(6) If any residential occupant of an IMD building is required to vacate its unit as a result of a municipal vacate order that has been issued for hazardous conditions as a consequence of an owner’s unlawful failure to comply with the code compliance timetable: (i) The occupant, at its option, will be entitled to recover from the owner the fair market value of any improvements made or purchased by the occupant and will be entitled to reasonable moving costs incurred in vacating the unit. All such transactions shall be fully in accordance with 29 RCNY § 2-07 regarding Sales of Improvements. These rights are in addition to any other remedies the occupant may have.
(ii) Any municipal vacate order shall be deemed an order to the owner to correct the noncompliant conditions, subject to the provisions of Article 7-C. The issuance of such an order as a result of the owner’s unlawful failure to comply with the code compliance timetable shall result in a rebuttable presumption of harassment in a harassment proceeding brought by an occupant or occupants before the Loft Board.
(iii) When the owner has corrected the noncompliant conditions, the occupants will have the right to reoccupy the unit and will be entitled to all applicable occupant protections of Article 7-C, including the right to reoccupy the unit at the same rent paid prior to the vacancy period plus any rental adjustments authorized by Article 7-C or the Loft Board rules. Furthermore, the occupant will be entitled to recover from the owner reasonable moving costs incurred in reoccupying the unit in accordance with 29 RCNY § 2-07 regarding Sales of Improvements.
(iv) At no time may rent for the unit be due or collectible for such period of vacancy.
(1) Notice: form and time requirements.
(i) All notices, requests, responses and stipulations served by owners and occupants directly upon each other shall be in writing, with a copy delivered or mailed to the Loft Board, accompanied by proof of service, within five calendar days of delivery, if service was made personally, or within five calendar days of mailing if service was performed by mail. Service of a notice, request, response or stipulation by the parties shall be effected either:
(A) By personal delivery or
(B) By certified or registered mail, return receipt requested, with an additional copy sent by regular mail.
Proof of service must be in the form of: a) a verified statement by the person who effected service, setting forth the time, place and other details of service, if service was made personally, or b) by copies of the return receipt or the certified or registered mail receipt stamped by the United States Post Office, and verified statement of mailing, if service was performed by mail. Communications by the Loft Board pursuant to these rules will be sent by regular mail.
Service is deemed effective on the date of personal delivery or five calendar days following service by mail. Deadlines provided herein are to be calculated from the effective date of service.
(ii) Modifications on consent, change of address. Applications, notices, requests, responses and stipulations may be withdrawn and disputes may be resolved, by written agreement of the parties, subject to Loft Board approval. Parties may change their addresses upon service of written notice to the other parties and the Loft Board, and such notice is effective upon personal delivery or five calendar days following service by mail.
(2) Procedure for occupant review of the narrative statement and legalization plan and resolutions of occupant objections.
(i) Buildings not covered under MDL § 281(5). This paragraph (2) shall apply to IMD’s for which a building permit for achieving compliance with the fire and safety standards of Article 7-B, alternative building codes or provisions of the M.D.L. has not been issued as of October 23, 1985, the date of adoption of these regulations. In the case of a building permit that has been issued as of October 23, 1985 and that remains in effect or is renewed, an owner who thereafter requests reinstatement of the underlying alteration application shall be required to comply with all provisions of this paragraph (2) with respect to all work yet to be performed as of the date that reinstatement is requested.
This paragraph (2) shall apply where an owner is required to amend an alteration application to reflect grandfathering approval of additional units pursuant to 29 RCNY §§ 2-01(a)(1)(ii)(B), (iii)(B), (v)(B), or (vi)(B), or where an owner is required to amend an alteration application to reflect the coverage of additional units under M.D.L. § 281(4); however, if the proposed work is to be performed solely within the additional unit(s), this paragraph (2) shall only apply to the occupant(s) of such unit(s).
This paragraph (2) shall not apply to IMD’s for which a building permit for achieving compliance with Article 7-B, alternative building codes or provisions of the M.D.L. has already been issued and is in effect as of the date of adoption of these regulations, and which remains in effect or is renewed without reinstatement of the underlying alteration application until such compliance is achieved. However, an occupant of such an IMD may file an application with the Loft Board based on the grounds that the scope of the work approved under the alteration application for which the permit was issued constitutes an unreasonable interference with the occupant’s use of its unit in accordance with the provisions of 29 RCNY § 2-01(h).
This paragraph (2) also shall not apply to those units in IMD’s for which a temporary or final certificate of occupancy as a class A multiple dwelling has been issued and is in effect as of the date of adoption of these regulations.
(ii) For buildings covered under MDL § 281(5) as a result of the 2010 amendments to the Loft Law. The requirements of 29 RCNY § 2-01(d)(2) (“paragraph (2)”) apply to an IMD covered by MDL § 281(5) that became subject to Article 7-C pursuant Chapter 135 or 147 of the Laws of 2010 as follows:
(A) Paragraph (2) does not apply to those units for which a building permit for achieving compliance with the fire and safety standards of Article 7-B, alternative building codes, or provisions of the MDL that provide alternative means of meeting the fire and safety standards of Article 7-B has been issued on or before June 21, 2010, and which remains in effect or is renewed without reinstatement or amendment of the underlying alteration application and legalization plan until the final certificate of occupancy is obtained.
(B) If a building permit has been issued prior to June 21, 2010 and the owner thereafter files for reinstatement of the underlying alteration application and legalization plan related to any part of the building or files for an amendment to the underlying alteration application and legalization plan, the owner will be required to comply with all provisions of paragraph (2) with respect to all work in the alteration application and legalization plan yet to be performed as of the date of the reinstatement or with respect to the proposed work in the amendment.
(C) If, prior to June 21, 2010, the building was already registered as an IMD because other units in the building are covered by Article 7-C pursuant to MDL §§ 281(1) or (4); the building had an alteration permit in effect on June 21, 2010; and the proposed work is solely within the additional unit(s) covered under MDL § 281(5) (“additional unit(s)”), paragraph (2) only applies to the occupant(s) of the additional unit(s).
(D) Paragraph (2) does not apply to those units for which a temporary certificate of occupancy is in effect as of June 21, 2010 and which remains in effect or is renewed without reinstatement or amendment of the underlying alteration application and legalization plan until the final certificate of occupancy is obtained.
(iii) For buildings covered under MDL § 281(5) as a result of the 2013 amendments to the Loft Law. The requirements of 29 RCNY § 2-01(d)(2) (“paragraph (2)”) apply to an IMD covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 4 of the Laws of 2013 as follows:
(A) Paragraph (2) does not apply to those units for which a building permit for achieving compliance with the fire and safety standards of Article 7-B, alternative building codes, or provisions of the MDL that provide alternative means of meeting the fire and safety standards of Article 7-B, has been issued on or before June 1, 2012, and which remains in effect or is renewed without reinstatement or amendment of the underlying alteration application and legalization plan until the final certificate of occupancy is obtained.
(B) If a building permit has been issued prior to June 1, 2012 and the owner thereafter files for reinstatement of the underlying alteration application and legalization plan related to any part of the building or files for an amendment to the underlying alteration application and legalization plan, the owner will be required to comply with all provisions of this paragraph (2) with respect to all work in the alteration application and legalization plan yet to be performed as of the date of the reinstatement or with respect to the proposed work in the amendment.
(C) If, prior to June 1, 2012, the building was already registered as an IMD because other units in the building are covered by Article 7-C pursuant to MDL §§ 281(1), 281(4) or 281(5); the building had an alteration permit in effect on June 1, 2012; and the proposed work is solely within the additional unit(s) covered under MDL § 281(5) as a result of Chapter 4 of the Laws of 2013 (“additional unit(s)”), this paragraph (2) only applies to the occupant(s) of the additional unit(s).
(D) Paragraph (2) does not apply to those units for which a temporary certificate of occupancy is in effect as of June 1, 2012 and which remains in effect or is renewed without reinstatement or amendment of the underlying alteration application and legalization plan until the final certificate of occupancy is obtained.
(iv) An occupant of an IMD covered by Article 7-C pursuant to MDL § 281(5), who did not participate in the narrative statement process because 29 RCNY § 2-01(d)(2) did not apply to the unit as described in 29 RCNY § 2-01(d)(2)(ii)(A) or (d)(2)(iii)(A), may file an application with the Loft Board based on the grounds that the scope of the work approved in the underlying alteration application for which the permit was issued constitutes an unreasonable interference with the occupant’s use of its unit in accordance with the provisions of 29 RCNY § 2-01(h).
(v) Narrative Statement. Except as otherwise provided in this paragraph (2), within 15 calendar days of the filing of its alteration application with DOB, the owner of an IMD must provide all occupants with a narrative statement, upon the approved Loft Board form, describing separately for each unit, both residential and nonresidential, all the work to be performed in such unit and all of the work to be performed in common areas. The owner of an IMD covered by Article 7-C pursuant to MDL § 281(5) must provide occupants with the narrative statement within 15 calendar days of filing the alteration application with DOB or within 30 calendar days after the effective date of this amended rule, whichever is later.
The description of work to be performed must include a listing of all noncompliant conditions, citation to the specific provisions of law or regulation that require their correction, and the work to be performed to correct them; an estimated time schedule for performance of the work; and a certification that the narrative statement is a complete and accurate statement reflecting all of the work proposed in the filed alteration application and the corresponding legalization plan, as defined in subdivision (a) of this section.
In accordance with the procedures set forth in 29 RCNY § 2-01(d)(1), following service of the narrative statement, the owner must file with the Loft Board the original narrative statement with proof of service, as required by 29 RCNY § 2-01(d)(1)(i), two copies of its filed alteration application along with the DOB’s acknowledgment of filing, and two copies of the legalization plan submitted to DOB. The plan filed with the Loft Board must be no larger than 14 inches by 17 inches.
Occupants may examine the alteration application and legalization plan by appointment at the Loft Board. An occupant may request from the owner a reproducible copy of the alteration application and legalization plan, construction specifications, if any, and the tenant protection plan described in subparagraph (vi) below, and the owner must supply such copy within 7 calendar days of service of the request. The cost of the copies of the alteration application and legalization plan are payable by the occupants up to the amount listed in 1 RCNY § 101-03.
(vi) The owner must certify to the DOB on the approved Loft Board form that it has complied with the provisions of subparagraph (v); that it will comply with all other requirements of this paragraph (2) and with the requirement for a tenant protection plan pursuant to New York City Administrative Code § 28-104.8.4; and that prior to obtaining the building permit, the owner will submit to the DOB a letter from the Loft Board, certifying compliance with all requirements of 29 RCNY § 2-01(d)(2). The owner’s certification must be filed with the DOB within 5 calendar days after the owner’s filing with the Loft Board pursuant to the procedures described in the preceding subparagraph (v).
(vii) Narrative Statement Conference. Within 30 calendar days after the owner has filed a complete narrative statement, as required by 29 RCNY § 2-01(d)(2)(v), the Loft Board will notify the owner and all occupants that a conference has been scheduled. The notice from the Loft Board will be sent by regular mail. This conference is for informational and conciliatory purposes. The Loft Board representative assigned to conduct the conference may review the provisions of these code compliance rules, including 29 RCNY § 2-01(f), dealing with occupant participation and may address the participants’ questions.
The owner or its representative will present its alteration application, narrative statement, legalization plan and the estimated time schedule for performance of the work. The occupants may raise any questions, comments or suggestions regarding the alteration application, narrative statement and legalization plan and the estimated schedule. The Loft Board representative will encourage the owner and occupants to discuss fully the alteration application, narrative statement, legalization plan, and the schedule, and to reach an agreement as to the performance of code compliance work.
The Loft Board representative may authorize an additional period of time, not to exceed 21 calendar days, for the parties to negotiate an agreement. If the parties are unable to come to an agreement within the authorized time period, the remaining provisions of this paragraph (2) shall apply. Any agreement reached by the parties, including any agreement reached after the above-mentioned 21 calendar day period, must be in writing, signed by the parties, and filed with the Loft Board as provided in 29 RCNY § 2-01(f).
With the exception of material contained in any written agreement(s) among the parties, the conference will not be electronically recorded, and the specifics or nature of communications made at the conference or in the course of negotiations during the authorized time period are not admissible as evidence in any Loft Board proceedings.
Information or responses to questions provided by the Loft Board representative will be advisory only and should not be relied upon as a substitute for professional advice of lawyers, architects or engineers retained by the participants.
The conference may be scheduled in the evening. Upon the request of the owner and the occupant(s), the Loft Board may schedule a conference for any IMD unit for which 29 RCNY § 2-01(d)(2) does not apply.
(viii) (A) Within 45 calendar days after due notice issued by the Loft Board or, if authorized, the additional period of time described in 29 RCNY § 2-01(d)(2)(vii), any occupant:
(a) May file with the DOB an alternate plan application, including a legalization plan, for work affecting the occupant’s use of its unit if the proposed work in the owner’s alteration application and legalization plan unreasonably interferes with the occupant’s use of the unit and the occupant’s alternate plan requires a review by DOB;
(b) May file with the DOB an alternate plan application in support of a claim that the owner’s alteration application and legalization plan will diminish services to which the occupant is legally entitled; and
(c) If authorized by the Loft Board staff, may file comments with the Loft Board opposing the owner’s alteration application and legalization plan on the ground that such plans unreasonably interfere with the occupant’s use of the unit or diminish services to which an occupant is legally entitled, provided that the occupant’s claim does not require DOB review in order for the Loft Board to resolve the dispute.
(B) If the occupant’s alternate plan proposed pursuant to this subparagraph (viii) is required to be filed with the DOB because it requires DOB review, it shall be filed by a registered architect or professional engineer retained by the occupant, who will be responsible for any required fees. If the alternate plan application includes an alteration application describing plumbing work, the alteration application must be filed with the DOB by a licensed plumber retained by the occupant, who is responsible for any required fees. Two or more occupants may file a joint alternate plan application describing their alternate plan.
The failure of an occupant to file an alternate plan application with the DOB and the Loft Board or comments with the Loft Board within the prescribed time period will constitute a waiver of an occupant’s right to challenge the owner’s submitted legalization plan on the ground that it would unreasonably interfere with the occupant’s use of the unit or constitute a diminution of services; however, late filing of an alternate plan application is permitted if, upon application, the Loft Board or its staff by order or administrative determination finds that good cause existed for the occupant’s failure to file in a timely manner and if a building permit has not yet been issued.
Within 5 calendar days after filing an alternate plan application with the DOB, the occupant shall provide the owner and all other occupants with a dated narrative statement describing the occupant’s objections to, comments on, or criticisms of the owner’s plan and any projected increase in code compliance costs resulting from the occupant’s alternate plan. In accordance with the procedures provided in 29 RCNY § 2-01(d)(1), the occupant must file with the Loft Board: the original copy of the occupant’s narrative statement with proof of service on the owner and all other occupants, two copies of the filed alternate plan application, including the DOB’s acknowledgment of filing, and two copies of the occupant’s alternate plan application and legalization plan.
The owner and other occupants may review the alternate plan application, including the legalization plan, by appointment at the Loft Board’s office. An owner or another occupant may request from the filing occupant a reproducible copy of the alternate plan application and legalization plan and shall be supplied with such copy within 7 calendar days after service of the request. The cost to the requesting party is the fee listed in 1 RCNY § 101-03.
(ix) If the DOB issues objections to an alternate plan application submitted by any occupant of the building, the occupant, through his or her architect or engineer, must take all necessary and reasonable actions to cure such objections within 45 calendar days of notice of objections from the DOB.
The owner, through its architect or engineer, must take all necessary and reasonable actions to cure the DOB objections within 60 calendar days of notice of objections from the DOB for its alteration application and legalization plan. The failure to take all necessary and reasonable actions to cure the objections within the prescribed time period may subject the owner to fines in accordance with 29 RCNY §§ 2-01.1 and 2-11.1 to be imposed by the Loft Board or the Environmental Control Board, if designated by the Loft Board, for failure to comply with these rules.
If the occupant’s opposition to the owner’s plan does not require DOB review, the occupant must serve the owner and the other occupants with the comments describing how the owner’s plan will unreasonably interfere with the occupant’s use of the unit or how it will result in a diminution of services to which the occupant is entitled. The occupant’s comments must be filed with the Loft Board within 45 days of the Loft Board’s notice, unless extended pursuant to 29 RCNY § 2-01(d)(2)(vii). Proof of service to the owner and the other occupants must be attached to the filing of the comments with the Loft Board.
(x) Amendments to Legalization Plan Prior to Loft Board’s Certification. If the owner amends the legalization plan initially submitted to the Loft Board, the owner must file two copies of any amended plans with the Loft Board, along with a detailed amendment to the narrative statement listing the changes. Proof of service of the narrative statement on all of the occupants of the building and copies of the plans must be filed with the Loft Board in accordance with the procedures described in subparagraph (v) above.
Within 40 calendar days of the Loft Board’s notice of the revised plan, any occupant who has not previously done so, may file with the DOB an alternate plan application for work affecting the occupant’s use of the unit, if DOB review is required or may file comments opposing the owner’s revised plan with the Loft Board. The occupant must comply with all the requirements of subparagraph (viii) above. The occupant may object to only those items that represent a change from the owner’s submissions previously received. The procedures for DOB review provided in subparagraph (ix) above shall apply.
(xi) Loft Board’s Certification of the Legalization Plan.
(A) (a) When the DOB has no further objections to the owner’s alteration application and legalization plan, and if no alternate plan application has been filed by any occupant of the building within the time period provided for filing in this rule, the Loft Board shall issue a letter certifying compliance with all requirements of 29 RCNY § 2-01(d)(2). To receive Loft Board certification, the owner must verify to the Loft Board that no revisions have been made to the legalization plan since the narrative statement conference or if the legalization plan has been revised, the owner must summarize any revisions which may have been made and include the date of the revised legalization plan.
(b) If an occupant’s alternate plan application has been filed and the 45 calendar day period provided in subparagraph (ix) above for addressing objections to the occupant’s alternate plan application has expired without all necessary and reasonable actions having been taken by the occupant to cure the objections, the Loft Board shall issue a letter certifying the owner’s compliance with all requirements of 29 RCNY § 2-01(d)(2).
(B) (a) Where the occupant has submitted an alternate plan application and is unable to agree with the owner upon the work to be performed, and the DOB has no objections to such alternate plan, or if the occupant has cured such objections, the occupant must advise the Loft Board and refer the alternate plan application to the Loft Board for review and resolution of the dispute.
Such referral to the Loft Board will occur no sooner than 30 calendar days after notification of the removal of the last objection or of the lack of objection.
In addition, the Loft Board staff may authorize such referral before all objections have been removed if the remaining objections do not need to be resolved in order for the Loft Board to resolve the dispute. If the owner and the occupant come to an agreement, they must immediately inform the DOB and the Loft Board of the agreement in writing and must provide the Loft Board with a copy of the agreement. In such case, the owner must amend the legalization plan for the IMD building to include the changes agreed upon by the parties, if any.
(b) Loft Board-Initiated Alternate Plan Dispute. If an occupant’s alternate plan application is referred to the Loft Board, pursuant to 29 RCNY § 2-01(d)(2)(xi)(B)(a) above, the Loft Board shall review the plans and on its own initiative may commence a proceeding to determine whether the owner’s alteration application and legalization plan would result in an unreasonable interference of the occupant’s use of the unit or a diminution of service. The proceeding will be governed by the Loft Board’s rules.
The owner and the occupants of the building will have an opportunity to submit an answer. In the case of an occupant challenging the owner’s legalization plan, the answer must include an explanation of how the owner’s proposed legalization plan would result in an unreasonable interference with the occupant’s use of the unit or a diminution of service.
If the Loft Board, after a fact-finding hearing, or the Executive Director, if a fact-finding hearing is not required, finds that the owner’s legalization plan would result in an unreasonable interference, it shall order the owner to amend its alteration application, legalization plan and corresponding narrative statement within 60 calendar days or may certify the alternate plan submitted by the occupant for the space involved.
A failure or refusal to comply with such an order may constitute a violation of the owner’s obligation to take all reasonable and necessary action to obtain an alteration permit under § 284 of Article 7-C and these rules, and the owner may be subject to civil penalties in accordance with 29 RCNY § 2-11.1. The Loft Board may also initiate an action to compel specific performance, and seek all applicable penalties authorized by the Loft Board rules or Article 7-C.
If the owner has cleared all DOB objections and if the Loft Board or its Executive Director finds that the owner’s alteration application and legalization plan would not unreasonably interfere with the occupant’s use of the unit, the Loft Board or its Executive Director shall issue an order or an administrative determination certifying compliance with all requirements of 29 RCNY § 2-01(d)(2).
(xii) Within 10 calendar days after the issuance of a building permit by the DOB, the owner shall file a copy of the building permit with the Loft Board. In the case of an IMD subject to Article 7-C pursuant to MDL § 281(5) which has an alteration permit on September 11, 2013, the effective date of this rule, the owner must file a copy of the building permit with the Loft Board by October 11, 2013, 30 calendar days after the effective date of this rule.
(xiii) Amendments to Legalization Plan After the Loft Board’s Certification of Compliance with 29 RCNY § 2-01(d)(2).
(A) If the owner intends to amend the legalization plan certified by the Loft Board, the owner must file with the Loft Board two copies of the amended narrative statement listing the changes and the amended legalization plan within 10 days after the filing of the amendment with the DOB in accordance with (B) below.
(B) The owner must follow the procedures for notice to the residential and nonresidential occupants set forth in 29 RCNY § 2-01(d)(1) above. If an owner amends the legalization plan and the proposed work is located within IMD space, or within the common areas of the building, the owner must serve an amended narrative statement on the occupants in accordance with the notice provisions provided in 29 RCNY § 2-01(d)(1) above. The owner must file proof of service and the amended narrative statement and legalization plan with the Loft Board. In accordance with the requirements of 29 RCNY § 2-01(d)(2)(viii) and within 40 calendar days from the Loft Board’s notice of the owner’s revised legalization plan, any occupant: 1) may file with the DOB an alternate plan application or 2) may file with the Loft Board comments opposing the work proposed in the amendment. The occupant may only object to those items that represent a change from the legalization plan certified by the Loft Board. The owner must obtain a Loft Board certification described in 29 RCNY § 2-01(d)(2)(xi) for any amended legalization plan.
If the occupant and the owner are unable to agree to the proposed work in the amended narrative statement and legalization plan, the Loft Board must follow the procedures in 29 RCNY § 2-01(d)(2)(xi)(B) regarding the Loft Board-initiated alternate plan dispute.
(xiv) Approval of an owner’s legalization plan by the DOB pursuant to this subsection shall not be construed as approval of the construction costs for the work proposed in the plan as necessary and reasonable costs of code compliance work for purposes of rent adjustment proceedings under these rules.
(3) Procedures for certification of estimated further rent adjustments. Following the DOB’s approval of an owner’s alteration application and legalization plan or an occupant’s alternate plan application, an owner may apply to the Loft Board for certification of estimated future rent adjustments, based on the legalization plan and the Loft Board Schedule of Allowable Necessary and Reasonable Code Compliance Costs in the Loft Board’s rules. The filing of an application for estimated future rent adjustments is at the discretion of the owner and shall not be a basis for staying commencement or continuation of work under a valid building permit issued by the DOB.
All applications for certification of estimated future rent adjustments will be processed in accordance with 29 RCNY § 1-06, except as provided herein. The owner must file with the Loft Board an application on a Loft Board approved form. The application must describe separately: i) the work to be performed in each residential unit; ii) the work to be performed in common areas; and iii) the work to be performed in the nonresidential units. The application must include a calculation of the necessary and reasonable costs based on the Loft Board schedule and any other necessary and reasonable costs as permitted in the Loft Board’s rules. If the owner anticipates the use of financing, the application must also include any statements, letters of intent or commitment, or other materials from institutional or noninstitutional lenders regarding the terms or conditions of such financing. In addition, the owner must file with the Loft Board two copies of the approved alteration application and legalization plan.
The owner’s application must be served on all of the building’s occupants by the owner in accordance with the service requirements for applications set forth in 29 RCNY § 1-06. Occupants may review the alteration application and legalization plan at the DOB in accordance with the DOB’s procedures or by appointment at the Loft Board’s office. An occupant may request from the owner a reproducible copy of the alteration application and legalization plan, and the owner must supply such a copy within 7 calendar days after service of the request at a cost to the occupant of up to the amounts listed in 1 RCNY § 101-03. Occupants may submit an answer to the owner’s application within 20 calendar days after the date on which service of the application was completed. The answer may list any objections, comments or suggestions regarding the calculation of necessary and reasonable costs of approved work.
The Loft Board may schedule a conference to discuss objections, comments or suggestions raised by the occupants and responses by the owner. Following such a conference, the application will be processed, and the Loft Board will issue findings on the necessary and reasonable code compliance work and associated costs, and the estimated future rent adjustments. Such findings will be a reasonable estimate based on available information. However, actual rent adjustments will be determined by the Loft Board in accordance with 29 RCNY § 2-01(i) through (l).
(4) Requirement of a Letter of No Objection for Work Permits in IMD Buildings.
(i) Proposed Work in Non-IMD Spaces: An owner of an IMD building who is applying to the DOB for an alteration permit to perform work in the non-IMD spaces of such building, including any commercial space or residential space not covered by Article 7-C of the MDL, must provide DOB with a letter of no objection (“LONO”) from the Loft Board prior to issuance of an alteration permit.
(ii) Proposed Work in the IMD Spaces: Any request for a LONO by or on behalf of the owner for work to be performed in the IMD units will be processed by the Loft Board as an amendment to the owner’s narrative statement and the legalization plan certified pursuant to 29 RCNY § 2-01(d)(2). The Loft Board will issue an amended certification for the revised narrative statement and legalization plan.
(iii) Requirements to Obtain a Letter of No Objection:
(A) Before a LONO may be granted, a building owner must demonstrate compliance with the annual registration requirements set forth in 29 RCNY § 2-11, and all outstanding fees and fines payable to the Loft Board for the building must be paid or an arrangement for payment must be made.
(B) The LONO request must include:
a. a formal request, which must be submitted on the Loft Board approved form, if any, at the time of the request;
b. a copy of the current monthly report relating to the legalization projects in the building, in accordance with the requirements of 29 RCNY § 2-01.1(a)(1)(ii);
c. a copy of the alteration application filed with the DOB;
d. a copy of the DOB objection sheet listing the only remaining DOB objection to be the requirement to obtain a LONO from the Loft Board; and
e. a copy of the corresponding drawings or plans with DOB bar code numbers filed with the DOB, on paper no larger than 14 inches wide by 17 inches long.
(C) The Loft Board’s staff will not consider an incomplete request for a LONO.
(D) The Loft Board’s staff may request additional information or documentation, as it deems necessary in its review of the LONO request. If the owner does not respond to the Loft Board staff’s request within ten (10) calendar days of the request, the request for a LONO will be deemed to be withdrawn.
(E) The Loft Board’s staff may deny a LONO request for the proposed work where:
a. the owner does not have an alteration application filed with the DOB to perform the legalization work in the IMD spaces;
b. the Loft Board issued a certification of the legalization work in the IMD spaces pursuant to 29 RCNY § 2-01(d)(2)(xi), and the owner does not have a current permit to perform the legalization work in such IMD units;
c. the DOB had issued a temporary certificate of occupancy for the residential portion of the subject building before the owner applied for a LONO, and the temporary certificate of occupancy expired and has not been renewed;
d. the owner’s monthly reports as required in 29 RCNY § 2-01.1(a)(1)(ii) show no advancement of legalization projects in the building. The Loft Board’s staff may supplement its review of the owner’s monthly reports to consider any relevant information contained in the Loft Board’s files;
e. the IMD building already has a final certificate of occupancy, but the owner has not applied to the Loft Board for removal;
f. the owner applied to the Loft Board for removal of the subject building prior to filing the LONO request, but the owner has not exercised all diligent efforts to submit additional information that was requested by the Loft Board’s staff for processing the removal application; or
g. any other circumstance exists that indicates to the Loft Board’s staff that the owner has failed to take all reasonable and necessary action to obtain a final certificate of occupancy for the residential portions of the IMD spaces to legalize the subject building or to remove the building from the Loft Board’s jurisdiction.
(F) Granting of a LONO is not a finding by the Loft Board that the owner is exercising all reasonable and necessary action toward obtaining a final certificate of occupancy for the residential portions of the IMD units to legalize the subject building.
(iv) Nature of the Proposed Work. In granting a LONO request, the Loft Board staff may consider the effect the proposed work may have on the IMD units and the protected occupants of the building. If the proposed work would (1) result in a change in the use, egress, buildings’ systems, or occupancy of IMD space in the building, or (2) affect an IMD unit in which there is an active dispute or finding of harassment by the Loft Board, or (3) adversely affect any protected occupants of the IMD units in the building, the Loft Board’s staff may conduct an informal conference with the protected occupants and the owner upon at least 15 calendar days’ notice. Service of the conference notice by the Loft Board will be sent by regular mail.
(v) Appeal of Decision.
(A) If the Loft Board’s staff denies a LONO request, the owner may appeal to the Executive Director for an administrative determination.
(B) To be considered timely, the appeal to the Executive Director must be received by the Loft Board within 15 calendar days from the mailing date of the LONO’s denial. An untimely appeal is subject to dismissal by the Executive Director. The appeal to the Executive Director must include:
a. the basis for the appeal;
b. a statement that requirements for the LONO set forth in subparagraph (iii) above are true, correct and complete as of the date of the appeal;
c. a detailed report of the current status of the legalization projects; and
d. a detailed schedule of the work to be performed in connection with achieving compliance with Article 7-B of the MDL, and a projected compliance date, to the extent the building is not yet in compliance therewith.
(C) The Executive Director will issue a written determination within 30 calendar days of receipt of the request.
(D) The Executive Director will not consider any incomplete appeals. Failure to file a complete appeal may result in rejection of the appeal without consideration of the issues raised.
(E) Appeals from the written determination of the Executive Director shall be governed in accordance with 29 RCNY § 1-07.1.
If the owner and affected occupant are unable to reach a resolution about how to legalize the unit, either the owner or the residential occupant may apply to the Loft Board for a determination as to whether the unit can be made code compliant. In processing such an application the Loft Board may, following a hearing, or if a fact-finding hearing is not necessary, the Executive Director may:
(1) Order the owner to apply for a non-use related variance, special permit, minor modification, or administrative certification, where the granting of such an application would make compliance possible; or
(2) Order the owner to alter the unit, or to redesign residential units and common area space into a configuration that would allow the legal conversion of the unit to residential use; or
(3) Revoke the unit’s Article 7-C coverage, if these remedies are unavailing.
If the Executive Director or the Loft Board orders (1) or (2) above, a specific date for compliance shall be provided and the occupants will be required to cooperate to achieve code compliance in accordance with the requirements of this section.
(1) The Loft Board encourages the owners and occupants of IMD buildings to work together to achieve code compliance. Such cooperation may include, but is not limited to, occupants’ performance of code compliance work. Owners, occupants and their representatives should make good faith efforts to communicate and cooperate with each other throughout the process so as to reduce or eliminate potential disputes during the course of code compliance. Cooperation may result in benefits to all the parties insofar as:
(i) Costs incurred by the owner may be minimized, reducing the capital the owner would have to raise and reducing the rent adjustment increases that would have to be passed along to residential occupants;
(ii) Access difficulties may be minimized;
(iii) Incidents of harassment may be eliminated or reduced;
(iv) Losses incurred by nonresidential occupants may be eliminated or minimized; and
(v) Code compliance may be achieved in a timely fashion.
(2) While occupants have no right as a matter of law to perform code compliance work, the owner and the occupant may agree voluntarily to allow such occupant to perform code compliance work or any portion thereof, within the building, to the extent permitted by applicable laws and regulations.
The owner is required to obtain the appropriate DOB approval for all work to be performed, but where the owner and the occupant have agreed that work will be performed by the the occupant, they may also agree that the occupant will obtain the required DOB approvals, permits, and consents in accordance with all applicable laws, codes and rules on any work so permitted.
Should the owner and the occupant agree upon performance of the code compliance work or any portion thereof by such occupant, the owner and the occupant must file a written agreement with the Loft Board in accordance with the procedures set forth in 29 RCNY § 2-01(d)(1). Such agreement must include:
(i) an outline specification of all work to be performed and who will perform it;
(ii) a time schedule for work to be performed as well as the identification of who is to supervise all construction work;
(iii) a certification that the parties will provide all information required in the processing of applications for rent adjustments, if any, by the Loft Board;
(iv) a certification by the owner and occupant that all work will be performed in accordance with the code compliance timetable provided in 29 RCNY § 2-01(a).
Such agreement by the owner and the occupant must be consistent with the alteration application, corresponding legalization plan certified by the Loft Board, and any other job type alteration applications, limited alteration applications (LAA), electrical work applications, elevator application (EA) or Elevator Building Notice applications (EBN) filed with the DOB and the Loft Board.
(3) If at any time after execution of the agreement but prior to the completion of the code compliance work, the occupant or the owner rescinds the agreement, the rescission must be in writing, served upon all other parties to the agreement and filed with the Loft Board in accordance with the procedures provided in 29 RCNY § 2-01(d)(1). Neither the agreement nor its abrogation will relieve the owner of the obligation to comply with Article 7-C and these rules. The owner and the occupant may also agree in writing, with a copy served on the Loft Board, to:
(i) Waive the procedure for occupant review of plans and resolution of occupant objections set forth in 29 RCNY § 2-01(d)(2); or
(ii) Modify the procedure for notice to occupants of proposed work set forth in 29 RCNY § 2-01(d)(2) and (g)(3).
Any agreement to waive the procedure for occupant review of plans must be completed on the Loft Board’s approved form and must identify the relevant plan and narrative statement by date. Any other agreement for waiver or modification of other provisions of these rules must be submitted to the Loft Board for its approval. The Loft Board will not give any effect to an agreement which proposes that code compliance will not be achieved or that it will be achieved after the deadlines prescribed in 29 RCNY § 2-01(a) and MDL § 284(1).
(4) If an owner who has agreed to allow an occupant to perform code compliance work applies to the Loft Board for an extension of time to obtain a final residential certificate of occupancy pursuant to 29 RCNY § 2-01(b), the owner must exercise due diligence in monitoring the timely completion of such code compliance work in order to have grounds of good cause for its inability to meet the code compliance timetable.
(1) Unless otherwise agreed by the parties, the owner must provide all occupants with written notice of the approximate commencement date, duration and scope of all work to be performed within their units and of all common area work that may interfere with access to their units or the provision of services to their units.
The notice need not provide an exact date for the work, but must provide a range of three consecutive working days during which work to be completed in one working day will take place and a range of five consecutive working days during which work expected to require more than one consecutive working day will begin.
The access notice must be served by personal service, first class mail, registered mail return receipt requested, or certified mail return receipt requested, such that service is deemed completed at least 5 calendar days prior to the first date in the range of days for work that may reasonably be expected to be completed within one working day and at least 10 calendar days prior to the first date in the range of days for all other work expected to require two or more consecutive working days.
(2) No later than the day preceding the first day in the range of work days listed on the access notice referenced in paragraph (g)(1) above, the owner must provide written notice, either confirming a specific starting date from among those specified or cancelling the scheduled work for the day or days specified. In instances where scheduled work is cancelled, it must be rescheduled in accordance with the provisions of 29 RCNY § 2-01(g)(1) above.
The owner must deliver the second access notice personally to the occupant or, in the occupant’s absence, to a person of suitable age and discretion within the unit. If the owner or agent cannot achieve delivery to a person as described, the owner or agent must deposit the notice under the main entrance of the unit or, if that is not possible, must affix such notice to the main entrance of the unit.
An occupant may designate in writing another occupant within the building to receive an access notice pursuant to this 29 RCNY § 2-01(g) provided that the designee is authorized to provide reasonable access to the occupant’s unit as required in such notice. Such designation must be served on the owner by (i) personal service or (ii) first class mail, and registered mail return receipt requested or certified mail return receipt requested.
(3) Upon appropriate notice, the building occupants must provide the owner with reasonable access to their units so that all requisite code compliance or repair work, inspections and surveys as may be required for the purpose of code compliance, may be performed.
(4) Upon the failure of an occupant to provide such access, the owner may apply to the Loft Board for an order affording the owner reasonable access to the unit. Recognizing the necessity of construction work proceeding without unnecessary delays caused by administrative processing, the Loft Board will process applications for access under the following expedited procedures:
(i) The owner must serve the occupant with a copy of the owner’s verified or affirmed application for access on the Loft Board’s form. Service on the occupant must be effected either by:
(A) personal service or
(B) certified or registered mail, return receipt requested, with an additional copy sent by regular mail.
Within 5 calendar days after delivery or service by mail on the occupant, the owner must file 5 copies of the application at the offices of the Loft Board, along with proof of service of the application upon the occupant. Proof of service is required at the time of filing the access application with the Loft Board.
(ii) The occupant must file with the Loft Board 5 copies, including the original, of a written answer in response to the application within 15 calendar days after service of the application is deemed complete. Service is deemed complete on the date of personal service or 5 calendar days after the owner mailed the application.
(iii) (A) Before the occupant files an answer with the Loft Board, the occupant must serve a copy of the answer on the owner by regular mail at the address designated on the application. Both owner and occupant will be notified of a hearing date, which will not be fewer than 8 calendar days or more than 15 calendar days from the mailing of the notice. There will be no more than one adjournment per party, limited to 7 calendar days, for good cause shown. Except as provided herein, the provisions of 29 RCNY § 1-06 apply to an application for access under this subdivision.
(B) Even if the occupant fails to file an answer, the Loft Board may issue an order granting access.
(iv) A finding by the Loft Board of failure by the owner to comply with any of the notice provisions of 29 RCNY § 2-01(g) or a finding by the Loft Board that an occupant has unreasonably withheld access may be the basis for a civil penalty in accordance with 29 RCNY § 2-11.1 for each violation of the notice provisions, or the unreasonable denial of access to the unit.
The necessary and reasonable cost of bringing and pursuing a Loft Board access proceeding that results in a finding that a residential occupant has unreasonably withheld access, including the labor or other costs incurred by the owner because access was unreasonably denied, may be included in the owner’s application for code compliance rent adjustment as an allowable cost to be allocated to such occupant’s residential unit, as provided for in 29 RCNY § 2-01(l)(1).
(v) The failure of an occupant to comply with a Loft Board order regarding access may be grounds for eviction of that occupant in a proceeding brought before a court of competent jurisdiction.
(1) Whenever reasonably possible, work to achieve code compliance should be performed without any, including the temporary, dislocation of occupants from their units and with minimal disruption to the occupants’ use of their units. The owner must take all reasonable actions to ensure that code compliance work does not unreasonably interfere with the use of any occupied unit. Arrangements should be made for each day’s work to be a full day’s work, to the extent possible. Scheduling of work must be done, to the extent possible, in a fashion that minimizes disruptions in the provision of essential services. Regular maintenance must be performed within the building during the construction period, except when construction renders regular maintenance impossible.
(2) After the filing of an alteration application by the owner, but before the issuance of a building permit, occupants who object to the proposed work because it will unreasonably interfere with the use of their units must oppose the proposed plan as provided in 29 RCNY § 2-01(d)(2)(viii)(A). After a permit has been issued through the process described in 29 RCNY § 2-01(d)(2), in which the occupants have had an opportunity to participate, the occupants may raise no further objections to the scope of the work approved under the permit on the grounds that it constitutes an unreasonable interference with the use of their units.
(3) i) In the case of an IMD for which a building permit for achieving code compliance with Article 7-B, alternative building codes or provisions of the M.D.L. has been issued and is in effect as of the date of adoption of these regulations, such that 29 RCNY § 2-01(d)(2) is not applicable, an occupant of such an IMD may file an application pursuant to this subdivision (h) on the grounds that the scope of the work approved under the permit constitutes an unreasonable interference with the occupant’s use of its unit. This subparagraph (i) is not applicable to IMD units subject to Article 7-C pursuant to MDL § 281(5).
(ii) IMD Units Subject to Article 7-C pursuant to MDL § 281(5) as a result of the 2010 amendments to the Loft Law. An occupant of an IMD unit subject to Article 7-C pursuant to MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010 may file an unreasonable interference application under this subdivision (h) if: (1) an alteration permit was in effect on June 21, 2010; (2) the occupant was not able to participate in the narrative statement process because 29 RCNY § 2-01(d)(2) was not applicable to the IMD at the time of the issuance of the alteration permit; and (3) the scope of the work approved under the alteration permit constitutes an unreasonable interference with the occupant’s use of the unit.
(iii) IMD Units Subject to Article 7-C pursuant to MDL § 281(5) as a result of the 2013 amendments to the Loft Law. An occupant of an IMD unit subject to Article 7-C pursuant to MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 4 of the Laws of 2013 may file an unreasonable interference application under this subdivision (h) if: (1) an alteration permit was in effect on June 1, 2012; (2) the occupant was not able to participate in the narrative statement process because 29 RCNY § 2-01(d)(2) was not applicable to the IMD at the time of the issuance of the alteration permit; and (3) the scope of the work approved under the alteration permit constitutes an unreasonable interference with the occupant’s use of the unit.
(4) In considering an application pursuant to this subdivision, the Loft Board shall process the application in accordance with Loft Board rules. The Loft Board may order the owner to amend its alteration application or may recommend that the DOB revoke the permit if it finds that the proposed work unreasonably interferes with the occupant’s use of the unit. If the permit is revoked by the DOB on these grounds, the occupants will have the opportunity to participate in the review of plans through the process described in 29 RCNY § 2-01(d)(2).
(5) Unreasonable interference during the legalization process. An aggrieved occupant may file an application with the Loft Board claiming an unreasonable interference with use of the unit, if, in the course of performing the code-compliance work, the owner or its agent:
(i) Engages in work that is outside of the scope authorized by the permit;
(ii) Departs significantly from the work described in the owner’s narrative statement and legalization plan;
(iii) Departs significantly from the estimated time schedule for performance of the work as amended according to the requirements of 29 RCNY § 2-01(d)(2);
(iv) Engages in repeated or substantial violations of the notice provisions provided in 29 RCNY § 2-01(g); or
(v) Violates the provisions of the tenant protection plan provided in 29 RCNY § 2-01(d)(2)(vi).
Such application must provide the factual basis for a claim that such unauthorized work, departure from the schedule, or violation of the tenant protection plan unreasonably interferes with the occupant’s use of its unit.
A finding by the Loft Board that the owner or its agents engaged in unreasonable interference with an occupant’s use may result in civil penalties in accordance with 29 RCNY § 2-11.1 for each violation. A finding by the Loft Board that the owner or its agents engaged in unreasonable and willful interference with an occupant’s use of its IMD unit may result in civil penalties in accordance with 29 RCNY § 2-11.1 for each violation, may constitute harassment of occupants, and may subject the owner to penalties resulting from a finding of harassment. As further provided in 29 RCNY § 2-02, the penalties may include, but are not limited to the denial of exemptions from rent regulation provided to an owner pursuant to § 286(6) of the MDL and Loft Board rules.
(i) Applications for Rent Guidelines Board (“RGB”) increases and for rent adjustments based on costs of compliance.
(1) RGB increases.
(i) Upon issuance of a final certificate of occupancy, an owner shall be eligible for a rent adjustment based upon the percentage rent increases established by the RGB (hereinafter “RGB Increases”). The first RGB Increase shall commence on the first day of the first month following the day an owner submits to the Loft Board a Notice of RGB Increase Filing form on the Loft Board approved form. Each subsequent rent increase shall be effective on each one or two-year anniversary of such commencement date, as applicable. This one or two-year period during which a particular RGB Increase is effective is referred to herein as the “RGB Increase Period.” The last RGB Increase prior to issuance of a final rent order by the Loft Board setting the initial legal regulated rent, pursuant to 29 RCNY § 2-01(m), shall remain effective until expiration of the applicable RGB Increase Period.
The amount of each RGB increase shall be equal to the percentage increase applicable to one or two-year leases as established by the RGB on the date the Notice of RGB Increase Filing form is submitted to the Loft Board and on each one or two-year anniversary thereafter, as applicable, and shall be applied to the maximum rent permissible under Loft Board rules as of the date the Notice of RGB Increase filing is submitted to the Loft Board.
The RGB Increase shall apply to all covered residential units, except for those units that are exempt from rent regulation under Article-7-C.
(ii) To obtain the RGB Increase, the owner shall submit to the Loft Board:
(A) Two copies of the Notice of RGB Rent Increase Filing formand the required attachments. The Notice of RGB Increase Filing form shall contain the rent in effect, including escalations and increases permitted in accordance with MDL § 286(2) or the Loft Board’s rules, for each covered residential unit subject to rent regulation;
(B) A copy of the final residential certificate of occupancy;
(C) A copy of the individual notices as described in subparagraph (iii) of this paragraph;
(D) The “Tenant Response Form” sent by the owner to the affected occupants; and
(E) An affidavit that such notices were sent by first class mail and certified or registered mail to each affected occupant.
(iii) The owner shall mail to each affected occupant a an individual notice of RGB Increase form setting forth the maximum permissible rent under Loft Board rules for the unit. The mailing of the individual notice of RGB Increase shall also include the “Tenant Response Form” with instructions for the tenant to elect RGB increases applicable to one-year or two-year leases. Such election shall be binding upon the occupant for the entire period prior to expiration of the last RGB Increase before issuance by the Loft Board of the final rent order setting the initial legal regulated rent. The failure of an occupant to make an election between RGB increases applicable to one-year or two-year leases within 45 calendar days of the mailing of the Notice of RGB Increase Filing shall be deemed to be an election to be governed by increases applicable to one year leases.
(iv) The occupant may dispute the maximum permissible rent set forth in the owner’s Notice of RGB Increase Filing, by detailing the amount in dispute on the Tenant Response Form. The occupant must file the dispute with the Loft Board within 45 calendar days of the mailing date of the individual notice of RGB Increase, as indicated on the affidavit of service. Failure of such occupant to notify the Loft Board of a dispute within such 45-day period shall be deemed to be an acceptance by the occupant of the amount of rent claimed by the owner. The Notice of RGB Rent Increase Filing form, the individual notices and the Tenant Response Form may not be altered or re-typed. During the period prior to the resolution of the dispute, the occupant shall pay rent in a sum equal to the amount of the monthly base rent that is not in dispute plus the amount of RGB Increase based on the undisputed amount. For example, if the owner claims the rent in effect is $450 and the occupant claims it is $400, the rent paid to the owner prior to resolution of the dispute shall be equal to $400 plus the applicable RGB Increase based on the undisputed amount of $400. The occupant shall pay any deficiency in one lump sum together with the first rent payment due following resolution of the dispute.
(v) RGB increases may also take effect in accordance with 29 RCNY § 2-01(i)(2)(i)(B) where the Loft Board sets the initial legal regulated rent.
(2) Rent Adjustments Based on the Cost of Code Compliance.
(i) (A) An owner may apply for rent adjustments based on the necessary and reasonable costs of compliance:
(a) once upon certification of compliance with Article 7-B of the MDL, alternative local building codes or provisions of the MDL, by a registered architect or a professional engineer licensed in the State of New York or upon issuance of a temporary residential certificate of occupancy, or
(b) once upon issuance of a final residential certificate of occupancy, or both.
(B) Notwithstanding any other provision of this title and in addition to any rights afforded to owners or tenants under this section, in accordance with MDL § 286(3), if an owner applies for a rent adjustment based on the code compliance costs for compliance with Article 7-B of the MDL and the Loft Board approves of such compliance, the Loft Board shall set the initial legal regulated rent, and each residential occupant qualified for protection pursuant to Article 7-C shall be offered a residential lease subject to the provisions regarding evictions and regulation of rent set forth in the Emergency Tenant Protection Act of 1974, except to the extent the provisions of Article 7-C are inconsistent with such act. If the initial legal regulated rent has been set based upon Article 7-B compliance only, a further adjustment may be obtained upon the obtaining of a residential certificate of occupancy.
(C) Except as set forth in this paragraph, the rent adjustment application based on code compliance costs filed with the Loft Board for IMD units covered under Article 7-C pursuant to MDL § 281(1), may include those necessary and reasonable code compliance costs incurred prior to June 21, 1982 for which the residential occupants have not either reimbursed or begun to reimburse the owner. A residential occupant who claims that reimbursement has been or is being made for such costs shall be required to present satisfactory proof of such reimbursement to the Loft Board.
(D) Except as provided in this subparagraph, rent adjustments shall be allowed for necessary and reasonable code compliance costs incurred by an owner in obtaining the building permit under which code compliance work is performed and for necessary and reasonable costs incurred for code compliance work performed after the issuance of such a permit.
(a) Limitations of Rent Adjustments Based on Costs of Compliance.
1. An owner who has failed to register its building as an IMD:
(i) on or before December 1, 1985, in the case of a building covered by Article 7-C pursuant to MDL § 281(1) or,
(ii) on or before February 11, 1993, in the case of a building which is covered by Article 7-C solely pursuant to MDL § 281(4) or,
(iii) on or before September 11, 2013, the effective date of this rule, in the case of a building covered by Article 7-C pursuant to MDL § 281(5), shall be allowed rent adjustments only for necessary and reasonable code compliance costs incurred after registration.
2. An owner who fails to register its building as an IMD:
(i) on or before March 1, 1986, in the case of a building covered by Article 7-C pursuant to MDL § 281(1) or,
(ii) on or before May 11, 1993, in the case of a building which is covered by Article 7-C solely pursuant to M.D.L. § 281(4) or,
(iii) on or before December 10, 2013, 90 calendar days after the effective of this rule, in the case of a building covered by Article 7-C pursuant to MDL § 281(5), shall be allowed only the necessary and reasonable code compliance costs incurred after registration, and such costs shall be based upon the schedule of costs referenced in subdivision (p) below, without indexing, regardless of when such costs were incurred.
(ii) An application filed pursuant to this paragraph (2) of 29 RCNY § 2-01(i) shall be filed no later than nine months after the owner has obtained a certificate of occupancy or February 1, 2000, whichever date is later. An owner that fails to file an application for code compliance rent adjustments in a timely manner pursuant to this provision shall be deemed to have waived its right to seek such a rent adjustment. An application submitted pursuant to this paragraph shall be submitted on a form prescribed by the Loft Board and shall meet the requirements of this paragraph and 29 RCNY §§ 1-06 and 2-11, except that for applications filed pursuant to clause (A) of subparagraph (iii) of this paragraph, only two copies must be filed plus one for each affected party, and for precertified applications filed pursuant to clause (B) of subparagraph (iii) of this paragraph, only two copies of the application must be filed. As part of the application the applicant must submit an itemized statement of costs incurred, including paid bills, cancelled checks or receipts for work performed, any construction contracts, the certificate issued by the Department of Buildings for the pertinent level of compliance, and such other information or materials as the Board requires. If the applicant seeks reimbursement for interest and service charges incurred in connection with compliance costs, the applicant must submit the information and materials required under paragraph (4) of 29 RCNY § 2-01(k). In accordance with the provision of 29 RCNY § 1-06(j)(1), the Board may require the applicant to furnish such reports and information as it may require concerning the code compliance work performed and may audit the books and records of the applicant with respect to such matters.
(iii) An application filed pursuant to this paragraph (2) of 29 RCNY § 2-01(i) may be submitted to the Loft Board for an audit or may be precertified pursuant to clause (B) of this subparagraph.
(A) If the application is not precertified, the Loft Board shall audit the application to ascertain whether the code compliance costs set forth in the application:
(a) are substantiated by invoices and copies of cancelled checks or other similarly reliable documentary evidence submitted as part of the application; and
(b) do not exceed the reasonable code compliance costs set forth in the schedule contained in these rules. Once the Loft Board’s audit of an application is completed, the Executive Director shall, by first class mail, send the affected residential occupants a copy of the owner’s application and send the affected residential occupants and the owner a copy of the auditor’s report.
(B) An owner shall have the option to file a precertified application for code compliance rent adjustments pursuant to this clause (B). Costs attributable solely to the precertification of the application shall not be included as reimbursable code compliance costs. A precertified application shall meet the requirements of subparagraph (ii) of this paragraph as to form and content, shall be served on all affected residential occupants, and shall be filed, together with:
(a) certification by a certified public accountant (“CPA”), certifying that said CPA has audited the code compliance cost information contained in the application and that the code compliance costs set forth in the application (i) are substantiated by invoices and copies of cancelled checks or other similarly reliable documentary evidence; and (ii) do not exceed the reasonable code compliance costs set forth in the schedule contained in these rules;
(b) certification by a registered architect that the code compliance work described in the application for which the owner seeks reimbursement has been performed, meets the requirements of MDL Article 7-B, and is reimbursable pursuant to these rules; and
(c) proof of service of the precertified application upon all affected residential occupants.
(C) Residential occupants may, no later than 45 days following mailing by the Loft Board of the auditor’s report pursuant to clause (A) of this subparagraph or service of a precertified application pursuant to clause (B) of this subparagraph, as the case may be, serve comments concerning the application upon the owner, and shall file such comments with the Loft Board along with proof of such service. Comments may include, but are not limited to, such matters as the scope of work performed, its necessity and reasonableness, the quality of the workmanship, and the actual costs claimed by the owner. Such comments shall specify the items in contention and the reasons therefor, and shall be supported by corroborating evidence, e.g., contractors’ estimates, invoices, and/or architects’ statements. The Executive Director may extend the 45-day period for a period of time not to exceed 21 days, upon a written request of a registered architect, contractor or CPA stating that he or she has been retained by an affected residential occupant for the purpose of reviewing the owner’s application and the Loft Board audit, where an audit has been performed, and stating the reason an extension of time is needed to complete such review. Within the 45-day period, or within the period of any extension granted by the Executive Director, an affected residential occupant may request that the Executive Director schedule a conference at the offices of the Loft Board with the owner or the owner’s representative. The conference shall be scheduled expeditiously and shall be limited to the issues presented in the owner’s application and in the Loft Board audit, where an audit has been performed.
(D) If the Executive Director determines that there are no genuine issues of material fact with regard to the application, the Executive Director shall recommend approval of the application. In the event that the Executive Director finds that a genuine issue of material fact has been raised with regard to any item in the application, he shall proceed with respect to such item in accordance with clause (E) or (F) of this subparagraph, as appropriate, and at the same time shall recommend approval of the part of the application as to which he has determined there are no genuine issues of material fact. In considering the application under this clause (D), the Board shall review the application, the comments submitted, and the recommendation of the Executive Director, and shall determine whether to approve the application or any part thereof.
(E) Where the Executive Director finds that a genuine issue of material fact has been raised he may take appropriate action to obtain such relevant information as in his discretion is necessary to assist him in reaching a determination. Such action may include, but shall not be limited to, ordering an inspection of the premises, directing the parties to serve and file additional information or corroborating evidence in support of their positions, holding an informal conference with the parties, or directing that a hearing be scheduled pursuant to the provisions of clause (F) of this subparagraph. No later than 45 days following the end of the period in which residential occupants may submit comments pursuant to clause (C) of this subparagraph, the Executive Director shall either make findings of fact and a recommended determination to the Board, or shall direct that a hearing be scheduled pursuant to clause (F) of this subparagraph; provided, however, that the 45-day period shall be extended an additional 30 days if, prior to the expiration of the 45-day period, the Executive Director has requested additional information or documentary evidence pursuant to item (2) of this clause (E) and the time to provide such additional information or documentary evidence, or to respond to such additional information or documentary evidence, has not yet passed. In making a recommended determination pursuant to this clause (E), the Executive Director shall consider, and shall make available to the Board, the application, any comments of the residential occupants, inspection results, information provided by the parties at an informal conference, additional comments, information or corroborating evidence submitted by the parties in writing, or other relevant information.
(a) If the Executive Director orders an inspection of the premises, the results of the inspection shall be mailed to the parties within three business days of completion of such inspection, and the parties may serve and file comments concerning the inspection results within eight business days after the date of mailing of such results.
(b) A party directed to serve and file additional information or documentary evidence shall serve and file the additional information or evidence within fourteen business days of such order. The party upon whom the additional information or evidence has been served shall serve and file its response, if any, within five business days after service of the information or evidence.
(c) If the Executive Director obtains any other relevant information to assist him in making his recommended determination under this clause (E), the Executive Director shall ensure the parties are provided with such information, shall provide the parties an opportunity to comment in writing on such information within up to 15 business days after service thereof, and shall provide the parties an opportunity to respond to each other’s comments within five business days after service of such comments.
(F) If the Executive Director determines that a genuine issue of material fact has been raised which may be resolved only by a hearing, the Executive Director may bifurcate the application into two parts:
(1) the part that requires no hearing, which shall proceed pursuant to clause (D) or (E) of this subparagraph, as applicable, and
(2) the part as to which a hearing is required, which shall proceed pursuant to this clause (F). Such hearing may be preceded by an informal conference, but in any case, shall be commenced not more than 30 days after the decision of the Executive Director to bifurcate the application, unless the parties stipulate in writing otherwise. Within 30 days after the conclusion of the hearing, the hearing officer shall make findings of fact and a recommended determination. In making the recommended determination the hearing officer shall consider, and shall make available to the Board, the application, any comments of the residential occupants, inspection results, information provided by the parties at an informal conference, additional comments, information or corroborating evidence submitted by the parties in writing, testimony given at any hearing, or other relevant information. The hearing officer shall submit his recommended determination with respect to the portion of the application proceeding pursuant to this clause (F) to the Board for its consid- eration.
(G) Nothing in this subparagraph (iii) of 29 RCNY § 2-01(i)(2) shall be construed to preclude partial approval of an application by the Board pursuant to clause (D) or (E) of this subparagraph prior to a hearing pursuant to clause (F). If the Board issues an initial order determining the portion of the application that proceeded under clause (D) or (E) of this subparagraph and grants a rent adjustment to the owner pending the conclusion of a hearing pursuant to clause (F), the owner may continue to collect rents in the amounts stated in the initial order unless and until a supplementary order is issued.
(iv) In evaluating all applications for code compliance rent adjustments, the Loft Board shall review the owner’s application, the comments of residential occupants, the Loft Board schedule of costs described in 29 RCNY § 2-01(j), or alternative schedule described below, and any other information considered by the Executive Director and the hearing officer in making a recommended determination. The Board shall determine the necessary and reasonable code compliance costs incurred by the owner, which shall be charged to all affected residential occupants as rent adjustments. Owners shall be allowed to pass along no more than the costs recited in the current Loft Board schedule as of the date on which the construction contract(s) is (are) entered into for items included in the contract(s), except as provided in the first paragraph of this subdivision (i) and other necessary and reasonable costs not on the schedule pursuant to 29 RCNY § 2-01(j) below. For items not included in the construction contract(s), costs will be determined based upon the schedule in effect at the time work was performed and 29 RCNY § 2-01(j) below. Owners submitting applications on or after June 1, 1989 shall be allowed to pass along no more than the costs recited in the revised schedule of costs promulgated by the Board on October 25, 1990. In all cases, if actual compliance costs are less than the amount recited in the Loft Board schedule, rent adjustments shall reflect the lesser actual costs.
(v) An owner may elect that the Loft Board shall deem the total cost of compliance to be the amounts certified by the Department of Housing Preservation and Development in any certificate of eligibility issued in connection with an application for tax exemption or tax abatement (such as “J-51”) to the extent that such certificate reflects categories of costs approved by the Loft Board.
(vi) An owner may expressly waive its right to a rent adjustment based on the cost of compliance. To do so, it shall indicate its waiver decision on the Notice of RGB Increase form described in 29 RCNY § 2-01(i)(1) and follow the procedures therein for notification of the affected occupants. In addition, an owner may be deemed to have waived its right to a rent adjustment based on the cost of compliance pursuant to 29 RCNY § 2-01(i)(2)(ii).
(vii) Whenever service upon parties is required in this 29 RCNY § 2-01(i)(2), service shall be made, and proof of service filed, in accordance with the requirements of 29 RCNY § 2-01(d)(1)(i).
(viii) If the Loft Board finds, following notice and an opportunity to be heard, that an architect or CPA has knowingly made a misleading material statement in the context of a certification issued pursuant to 29 RCNY § 2-01(i)(2)(iii)(B), the Loft Board may refuse to accept subsequent certifications from such architect or CPA, and shall refer its findings to the appropriate licensing agency.
(1) costs incurred in repairing or replacing items located in the common or commercial areas of the building or involving its exterior (such as masonry, fire escape, or skylight repairs) to the extent such items are repaired or replaced with a similar or comparable item due to their deteriorated condition (such costs being “deferred maintenance” costs);
(2) the costs of curing preexisting violations in the building evidenced by municipal notices of violation to the extent such violations would have to be cured even if the building did not have to be made code compliant pursuant to Article 7-C; and
(3) other “soft” costs, such as BRAC payments. The repair or replacement of work items (other than windows, as provided below) located within the residential units of the building shall not constitute a deferred maintenance cost. The foregoing rules are qualified to the following extent; (x) if the roof is required to be repaired or replaced, and it has been replaced within the 10-year period prior to the narrative statement conference for the building, half the necessary and reasonable costs shall be recognized as code compliance costs and allocated equally among any residential units whose occupants had made significant use of the roof during this 10-year period (“significant use” may be evidenced by the presence on the roof of the residential occupants’ property, such as outdoor furniture, plants, decking, and clotheslines); otherwise, the costs of roof repair and replacement shall be excluded as deferred maintenance; (y) if windows are required to be repaired or replaced, the necessary and reasonable costs shall be recognized as code compliance costs if incurred to meet residential certificate of occupancy standards, but shall be excluded if they resulted instaed from the deteriorated condition of the windows; and (z) the repair or replacement of utility risers, other building system components, or structural components due to their deteriorated condition with similar or comparable items shall constituye deferred maintenance costs unless these components had been installed by a residential tenant. In determining the appropriate rent adjustment for code compliance for each affected unit the Loft Board will decide on a case-by-case basis whether the work item applied for was necessary and reasonable to achieve minimal code compliance in the building. “Minimal code compliance” shall not be limited exclusively to the least expensive method of compliance but may also include other reasonable approaches to meeting legal requirements which are not unduly burdensome to the residential occupants. In assessing the reasonableness of the approach, the Board may consider the construction standards and specifications applied in housing programs financed by the Department of Housing Preservation and Development and other affordable housing programs in New York City. Where the cost of an allowable code compliance item has been included in the initial rent adjustment based upon Article 7-B compliance, the cost of any subsequent work performed to repair or replace that item may not be included in the final rent adjustment based upon issuance of a final residential certificate of occupancy. Rent adjustments for approved work items will be based on the lower of the actual cost or the scheduled amount for the item. In the case of approved work items that do not appear on the schedule, the necessary and reasonable cost of such items will be determined and included in the rent adjustments. Further, if in order to provide heat as required by Loft Board Minimum Housing Maintenance Standards, the landlord is or was required to install a central heating system or individual heating systems or to modify an existing system, the necessary and reasonable costs incurred in purchasing and installing or modifying such system or systems shall be costs that may be passed along to tenants as part of the rent adjustment calculated pursuant to these regulations. If in order to meet utility company standards or rules, an owner is required to perform work such as installing meters or constructing meter rooms, the necessary and reasonable costs of such work shall be costs that may be passed through as rent adjustments pursuant to these rules. Also, if in order to provide elevator services as required by the Department of Buildings or Loft Board Minimum Housing Maintenance Standards, the landlord has modified or replaced an existing elevator, the necessary and reasonable costs of performing such work shall be costs that may be passed along to the tenants as part of the code compliance rent adjustments. As part of the legalization work, the landlord shall also replace elevator hoistway door locks where prohibited with a security device on residential floor landings that provides substantially the same or enhanced security to the tenants, and the necessary and reasonable costs of performing such work shall be costs that may be passed along to the tenants as part of the code compliance rent adjustment. “Substantially the same or enhanced security” shall be defined as follows:
(1) a “zero clearance vestibule,” if the elevator is equipped with sliding doors and the vestibule may be created without altering their operation;
(2) a vestibule extending into the IMD unit, with the minimum dimensions required to meet code requirements, if the elevator is equipped with swinging doors which open into the IMD unit; or (3) any other security arrangement to which the owner and tenant agree which meets DOB and Fire Department requirements. On request of the residential tenant, additional security measures such as mirrors and reinforced vestibule walls shall be installed by the owner, provided they are acceptable to DOB and the Fire Department, and the cost of their installation shall also be a recognized cost of code compliance. If a tenant has performed construction without the owner’s consent at any time after the initial narrative statement conference, and additional costs are incurred by the owner as a result, such as architectural fees to revise plans or labor and material costs to perform additional work, these costs may be passed through to the tenant as part of the code compliance rent adjustments. In situations in which the owner alters or reconfigures residential units in a manner which results in changes in residential floor area pursuant to a Loft Board order or agreement among the parties, the Loft Board may determine the base rents to be charged for such spaces reflective of the change. Installation of an elevator vestibule to provide a tenant with security from intruders using the elevator shall not be the basis for an adjustment of base rent. Also, see 29 RCNY § 2-01(0).
(1) When an owner files an application for code compliance rent adjustments pursuant to 29 RCNY § 2-01(i)(2) prior to obtaining a certificate of occupancy, rent adjustments granted by the Board shall be retroactive to the first day of the month following the date of the filing of the completed rent adjustment application by the owner. When an owner files an application for code compliance rent adjustments pursuant to 29 RCNY § 2-01(i)(2) after obtaining a final certificate of occupancy, rent adjustments granted by the Board shall be retroactive to the first day of the month following the date of the issuance of the final certificate of occupancy. In either case, rent adjustments granted by the Board shall take effect on the first rent payment date that occurs at least 10 days after the Loft Board has mailed a final rent adjustment order to the owner and all affected residential occupants. For example, in a case where an owner filed an application for a rent adjustment prior to obtaining a certificate of occupancy, if the owner filed its application on March 15, 1986, and the Loft Board’s order was mailed on October 6, 1986, the increase would be effective November 1, 1986, retroactive to April 1, 1986. At the option of the residential occupant, such retroactive increase may be paid either in a lump sum or as an addition to the regular monthly rent payments at a rate equal to 20 percent of the rent in effect, including any escalators, as of the date of application for adjustment (“base rent”) until payment of the full retroactive amount is completed. Also, see 29 RCNY § 2-01(o).
(2) The total rent adjustment per building shall be determined by the Loft Board:
(i) by dividing the allowable cash costs of compliance approved by the Loft Board, exclusive of interest and service charges, over a 10-year period of amortization; or
(ii) by dividing the allowable cash costs of compliance approved by the Loft Board over a 15-year period of amortization and adding the actual mortgage debt service, incurred by the owner to pay allowable cash costs of compliance approved by the Loft Board that are attributable to interest and service charges in each year of indebtedness to an Institutional Lender (as defined in paragraph (4) of this subdivision) or any Qualified Noninstitutional Lender (as defined in paragraph (4) of this subdivision) that is approved by the Loft Board pursuant to such paragraph. The portion of the rent adjustment attributable to mortgage debt service shall be computed on the basis of the average annual debt service attributable to interest, finance and service charges over the loan term, provided that the maximum total amount of interest charged includable in rent shall not exceed that reflected in a 15 year self-amortizing mortgage. Service charges shall include mortgage application fees; commitment fees; fees for professionals who are required to be paid by the lender (such as appraisers, attorneys and surveyors); mortgage title examination and insurance fees and charges; origination fees; points; mortgage recording tax; and other recording charges. The use of a 10-year period of amortization, not including debt service, or of a 15-year period of amortization, including debt service, shall be at the option of the owner when interest and service charges are incurred to pay for any portion of allowable cash costs of compliance approved by the Board.
(3) In cases where the owner of a building receives tax abatement and exemption under Part 1 of Subchapter 2 of Chapter 2 of Title II (§ 11-243 formerly J-51) of the Administrative Code, the total annual rent adjustment for the IMD shall be adjusted to reflect a reduction equal to one-half of the total annual tax abatement granted for the IMD for those categories of costs approved by the Loft Board as necessary and reasonable for code compliance. The allocation of such reduction shall be in accordance with the formulae for allocation of rent adjustments contained in 29 RCNY § 2-01(l).
(4) (i) Definitions. For purposes of amortizing code compliance costs and interest and service charges over a 15-year period, the following terms have the following meanings:
(A) “Institutional lender” shall mean any bank, trust company, national bank, savings bank, state or federal savings and loan association, state or federal credit union, in- surance company; any pension fund or retirement system of any corporation, association or any other entity owned or controlled by any one of the above, provided the same is supervised by or responsible to any agency of the federal government, or the State or the City of New York; and any governmental agency.
(B) “Qualified noninstitutional lender” shall mean any person or entity other than (A) the owner of the building, (B) any person or entity that owns, directly or through another entity, more than 50% of the ownership interest in the property, or any person or entity that at any time after March 26, 1993 has owned directly or through another entity, more than 50% of the ownership interest in the property, or (C) the spouse of any person described in clauses (A) or (B) above.
(ii) Procedure for applying for rent adjustment based on loans used to finance allowed compliance costs.
(A) Required documentation for all loans. An applicant seeking a rent adjustment based on interest and service charges for any loan from an institutional lender or qualified noninstitutional lender shall submit, as part of the application described in 29 RCNY § 2-01(i)(2), a descripion of the terms of the loan, the identity of the lender, a copy of all documents (including amendments thereto) evidencing or securing the loan (e.g., the note, loan agreement, mortgage, and security agreement, if any) certified by the lender as being true and correct copies; and evidence of the payment of service charges in the form of paid bills, canceled checks or other similar evidence.
(B) Additional documentation required for a loan from any qualified noninstitutional lender. In the case of a loan from a qualified noninstitutional lender, an applicant must submit, in addition to the documents enumerated in sentence (i) of subparagraph (b) of this paragraph, a completed Application for Noninstitutional Lender Approval in the form prescribed by the Loft Board together with an affidavit of Noninstitutional Lender-Lender Approval Form and an Affidavit of Noninstitutional Lender-Loan Approval Form. A completed Application for Noninstitutional Lender Approval and Affidavit of Noninstitutional Lender-Lender Approval Form must be submitted before the Loft Board will begin to process the rent adjustment application described in 29 RCNY § 2-01(i)(2).
(C) Additional documentation required for a loan from a qualified noninstitutional lender that is related to the applicant by blood, marriage or ownership of stock, partnership interests or other ownership interests. In the case of a loan from any qualified noninstitutional lender that is related to the applicant by blood, marriage or ownership of stock, partnership interests or other ownership interests, an applicant must submit, in addition to the documents enumerated in sentences (ii) and (iii) of subparagraph (b) of this paragraph, a statement from the lender’s certified public accountant to the effect that the loan under consideration is a bona fide loan and that the interest payable thereunder has been included or is includable as income in the lender’s federal income tax return or, alternatively, a true and correct copy (certified as such by the lender or the lender’s certified public accountant) of the lender’s federal income tax return(s) (or the applicable schedules thereto) showing that such interest has been included in the lender’s income for federal income tax purposes for each year to date of such application that interest under the loan has been paid to an including the most recent year in which a federal income tax return has been filed; and copies (both sides) of canceled checks drawn on an account of the lender evidencing payment of the proceeds of the loan to or on behalf of the owner. The Loft Board shall approve a noninstitutional lender in determining rent adjustments pursuant to 29 RCNY § 2-01(k)(2); provided, however, in the case of a qualified noninstitutional lender that is related to the applicant by blood, marriage or ownership of stock, partnership interests or other ownership interests, that the applicant submits reliable evidence (in the form described above) that the loan under consideration is a bona fide loan. Service charges shall be reimbursable only to the extent that they have been paid on or prior to the date of application and only when supported by reliable evidence (in the form described above). Only that portion of interest charges on a noninstitutional loan that does not exceed 2 points over the Federal National Mortgage Association’s yield on multi-family, 15-year fixed-rate loans shall be included in rent adjustments. The procedures for applications to the Loft Board set forth in 29 RCNY § 1-06 of these rules shall not apply to Applications for Non- Institutional Lender Approval. The owner shall be required to submit two copies of the Application for Non-Institutional-Lender Approval. Such application will be approved provided such filing contains the information required by these rules. The portions of the preceding provisions of 29 RCNY § 2-01(k) pertaining to loans from qualified noninstitutional lenders (specifically, the reference to qualified noninstitutional lenders in 29 RCNY § 2-01(k)(2)(ii), and (k)(4)(i)(B), (k)(4)(ii)(B), (k)(4)(ii)(C), and the paragraph immediately following 29 RCNY § 2-01(k)(4)(ii)(C) shall terminate on June 30, 1995 unless extended by the Loft Board.
(1) Allowable code compliance costs of work performed in a residential unit to bring the unit into compliance shall be allocated to that residential unit.
(2) Allowable code compliance costs of systems work, such as utility service or heat, that only services and is only capable of servicing the residential units and of work performed in nonresidential units solely to achieve Article 7-C compliance for the residential units shall be allocated equally among those residential units regardless of where the work is performed.
(3) An equal share of allowable code compliance costs of work in common areas and nonresidential units, except as provided in 29 RCNY § 2-01(l)(2), in the building shall be allocated to each residential unit. Allowable code compliance costs for systems work, such as utility service or heat, which services or is capable of servicing nonresidential units shall be deemed to be code compliance costs of work in common areas. This share, as described in this 29 RCNY § 2-01(l)(3), shall be equal to the portion of total allowable code compliance costs of work in common areas and nonresidential units, except as provided in 29 RCNY § 2-01(l)(2), which bears the same proportion to the total as the sum of the amount of floor area devoted to the maximum number of residential units in the building at any time after April 1, 1980 which qualified for coverage under M.D.L. Article 7-C and of the residential units which appear on the final certificate of occupancy which did not qualify for coverage under M.D.L. Article 7-C bears to the building’s total floor area, divided equally among the sum of the maximum number of residential units in the building at any time which qualified for coverage under M.D.L. Article 7-C and the number of residential units which appear on the final certificate of occupancy which did not qualify for coverage under M.D.L. Article 7-C so that
S = (TC × RA/TA) R
that is S equals (TC multiplied by (RA divided by TA)) divided by R,
where S = Share per residential unit
TC = Total allowable code compliance costs of work in common areas and nonresidential units, except as provided in 29 RCNY § 2-01(l)(2)
RA = Sum of the floor area of the maximum number of residential units in the building at any time which qualified for coverage under M.D.L. Article 7-C and of the residential units which appear on the final certificate of occupancy which did not qualify for coverage under M.D.L. Article 7-C
TA = Total Floor area
R = Sum of the maximum number of residential units in the building at any time which qualified for coverage under M.D.L. Article 7-C and the number of residential units which appear on the final certificate of occupancy which did not qualify for coverage under M.D.L. Article 7-C
For purposes of allocating rent adjustments pursuant to 29 RCNY § 2-01(l)(3): Total floor area (TA) is defined as the sum of the gross areas of the floors of a building measured from the exterior faces of exterior walls or from the center line of walls separating two buildings. Floor area includes rentable space, such as space in penthouses, cellars, and basements, but excludes rooms with mechanical, heating and air conditioning equipment and elevator and stair bulkheads, water tanks and cooling towers. Nonresidential tenant, residential tenant and vacant rental spaces are included in the floor area. Floor Area of Residential Units (RA) is defined as the sum of the clear area of the floor contained within the partitions or walls enclosing any room, space, foyer, hall or passageways of each of the residential units. It shall not include common areas, public halls, public vestibules, public rooms or other public parts of the building. Common areas are defined as spaces used for bulkheads, stairs, hallways, cellars, basements, fire escapes, rooms used for mechanical, elevator and heating equipment, and other areas used by all the residential occupants of the building, including storage areas.
(1) Following the calculation of code compliance rent adjustments or the waiver of an owner’s right to such rent adjustments pursuant to 29 RCNY § 2-01(i)(2)(ii), the Loft Board shall set the initial legal regulated rent for all covered residential units remaining subject to rent regulation under M.D.L. Article 7-C.
(2) If an owner has waived its right to code compliance rent adjustments, the Loft Board may establish the initial legal regulated rents for covered residential units subject to rent regulation under M.D.L. Article 7-C based on the owner’s RGB application pursuant to 29 RCNY § 2-01(i)(1), or, if no RGB application was filed, by evidence including, but not limited to, Loft Board records, documents submitted by affected parties, and the testimony of witnesses.
(3) (i) Upon the issuance by the Loft Board of an order establishing the initial legal regulated rent, the owner shall offer each residential occupant a residential lease subject to the provisions regarding evictions and regulation of rent set forth in the Emergency Tenant Protection Act of 1974, except that to the extent the provisions of Article 7-C are inconsistent with such act, the provisions of Article 7-C and these rules shall govern. At such time, the owner shall register with the New York State Division of Housing and Community Renewal in accordance with the ETPA.
Note: § 285(3) of the M.D.L. requires registration with a real estate industry stabilization association; however, amendments to the ETPA modified that filing requirement as shown.
(ii) If the owner has received any RGB Increase under 29 RCNY § 2-01(i)(1), then the initial term of such lease shall end upon expiration of the last RGB Increase Period (as defined in 29 RCNY § 2-01(i)(1)) prior to the setting of the initial legal regulated rent; provided, however, that no notice or proceeding by the owner to recover the unit pursuant to § 2524.4 of the Rent Stabilization code may be commenced during the pendency of this initial abbreviated lease term. The initial legal regulated rent established by the Loft Board pursuant to this subparagraph (ii) shall be equal to:
(iii) If an owner has not received any RGB Increases under 29 RCNY § 2-01(i)(1), then the rent shall be the sum of clauses (A) and (B) of subparagraph (ii) above plus the percentage increase then applicable to one-or-two year leases, as elected by the tenant, as established by the RGB and applied to the base rent, provided, however, such percentage increases may be adjusted downward by the Loft Board if prior increases based on Loft Board guidelines cover part of the same time period to be covered by the Rent Guidelines Board adjustments. For units in buildings that have been rented at market value subject to subsequent rent regulation as a result of the owner’s purchase of improvements pursuant to M.D.L. § 286(6) and 29 RCNY § 2-07(f)(5), the initial legal regulated rent shall be calculated as set forth above except that the code compliance cost increase shall be zero.
(4) Rental adjustments attributable to the cost of code compliance shall not become part of the base rent for purposes of calculating rent adjusted pursuant to Rent Guidelines Board increases and shall terminate, after 10 or 15 years, as established by Loft Board order.
(1) Cooperative or condominium conversion of an IMD shall be fully in accordance with Article 23-A of the General Business Law, as amended, and the rules and regulations promulgated by the New York State Attorney General pursuant thereto. No eviction plan for conversion to cooperative or condominium ownership for a building that is, in whole or in part, an IMD shall be submitted for filing to the office of the New York State Attorney General pursuant to the General Business Law until a final residential certificate of occupancy is obtained and the residential occupants are offered residential leases in accordance with these regulations.
(2) Noneviction plans for such buildings may be submitted for filing provided that the sponsor or owner association remains legally responsible for bringing all rental, cooperative, and condominium units and all common areas of the building into compli ance with Article 7-B of the M.D.L., or alternative building codes or provisions of the M.D.L. described in 29 RCNY § 2-01(a)(3) and for all work in common areas required to obtain a residential certificate of occupancy. An IMD that has been converted to cooperative or condominium ownership is subject to compliance with Article 7-C and Loft Board rules and regulations promulgated pursuant thereto.
(3) Cooperative and condominium units occupied by unit owners or tenant-shareholders are not subject to rent regulation pursuant to Article 7-C of the M.D.L. Cooperative and condominium units occupied by residential occupants qualified for the protection of Article 7-C of the M.D.L., i.e., who are not unit owners or tenant-shareholders, are subject to rent regulation pursuant to the statute.
(4) The sponsor or owner association of an IMD building that has converted to cooperative or condominium ownership shall file for code compliance rent adjustments for any units remaining subject to rent regulation pursuant to M.D.L. Article 7-C by the time set forth in 29 RCNY § 2-01(i)(2)(ii). A sponsor or owner association that fails to file an application for code compliance rent adjustments in a timely manner pursuant to this provision shall be deemed to have waived its right to seek such a rent adjustment.
(5) At any time after obtaining a residential certificate of occupancy, the sponsor or owner association of such an IMD building shall file with the Loft Board a list of all units originally registered as IMD units that are occupied by unit owners or tenant-shareholders, certifying that such units are occupied by unit owners or tenant-shareholders, and affirming that the sponsor or owner association seeks exemption for those units from the Loft Board’s order setting the initial legal regulated rents. The building shall remain subject to the annual registration renewal requirement pending completion of Loft Board review of such list.
(1) Demolition.
| Description | Unit | Revised Schedule* |
|---|---|---|
| Dumpster (incl. permit) | Mini | 30.45/load |
| 10 yd. | 385.78/load | |
| 20 yd. | 482.13/load | |
| Demolition susp. plaster or sheetrock ceiling | sq. ft.sq. ft. | 1.270.76 |
| Demolition of non fire-rated partition | sq. ft. | 1.02 |
| Removal of non-code compliant hot water heater | each | 76.13 |
| Removal of non-code compliant space heater | each | 64.35 |
| Removal of non-code compliant heater, ceiling unit | each | 193.05 |
| Removal of non-code compliant plumbing fixture | each | 64.35 |
| Remove window and frame on lot lines | each | 64.35 |
| Demolition of wooden stairs | per floor | 256.39 |
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(2) Masonry
| Allowance for openings in interior walls for exhausts, vents and heaters | per opening | 50.75 |
|---|---|---|
| Fireproofing columns, 4”solid block | sq. ft. | 6.44 |
| New window opening in brick or concrete block wall | each | 386.11 |
| New door opening in sheetrock | each | 76.13 |
| New door opening in brick or concrete block wall | each | 386.11 |
| Exterior wall opening for exhausts, vents and space heater | each | 321.76 |
| New fire-rated stair enclosure – | ||
| top floor to roof | each | 1,287.02 |
| first floor to cellar | each | 1,287.02 |
| Extend brick parapet to provide 3‘6”height | sq. ft. | 32.18 |
| New bulkhead (25 linear feet) | each | 3,217.55 |
| Bulkhead ventilation louver (12”x 12”) completely installed | each | 128.70 |
| Gypsum block (4”) to enclose boiler/meter rooms | sq. ft. | 6.44 |
~
(3) Metals
| New metal stair, 2‘6”wide, for top floor to roof* | floor | 2,233.00 |
|---|---|---|
| New roof railings to provide 3‘6”parapet | lin. ft. | 19.31 |
| Metal stair to cellar to replace existing* | floor | 1,930.53 |
| Skylight including screen 20 sq. ft. | each | 772.21 |
| Scuttle ladder to roof | each | 257.40 |
| Fire escape, new | floor | 2,445.44 |
| Extend fire escape to roof & platform | each | 1,930.53 |
| Exterior screened stair | floor | 3,217.55 |
| Cellar”engineer’s”hatch with frame, ladder, cutting, patching1 hardware new steel (24”x 24”) completely inst. | each | 1,930.53 |
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(4) Carpentry
| Floor joist, 3 × 10 | lin. ft. | 10.15 |
|---|---|---|
| Floor joist, 3 × 12 | lin. ft. | 12.18 |
| Subflooring replacement | sq. ft. | 1.83 |
| Framing for new partitions | sq. ft. | 1.29 |
~
(5) Doors and Windows
| Building entry and/or vestibule, new installation | lin. ft. | 257.40 |
|---|---|---|
| Hollow metal door and frame (common area) – replacement | each | 450.46 |
| Hollow core wood door and frame | each | 128.70 |
| Dwelling unit entrance door with frame including lock, door knobs and hinges | each | 514.81 |
| Bulkhead door with frame | each | 450.46 |
| Repair existing dwelling unit entrance door | each | 128.70 |
| New dwelling unit entrance door lock | each | 128.70 |
| Reversing swing of door | each | 86.28 |
| Double hung window (double glaze) 20 sq. ft. | each | 321.76 |
| Double hung window (single glaze) 20 sq. ft., installed | each | 268.98 |
| Windows larger than 20 sq. ft. | each sq. ft. above 20 | 25.74 |
| Lot line window | each | 406.00 |
| Glazing – wired | sq. ft. | 10.94 |
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(6) Finishes
| Painting (primer coat on sheetrock, plus one coat) | sq. ft. | 0.37 |
|---|---|---|
| Plaster patching | sq. ft. | 1.93 |
| Gypsum board, non-fire rated (1/2”) for interior unit partitions | sq. ft. | 2.03 |
| Fire-rated gypsum board (5/8”) to fireproof underside of stairs, 2 hrs. rating | sq. ft. | 2.58 |
| To separatecommercial/manufacturing from residential portion of building, 1 or 2 hrs. rating | sq. ft. | 1.29/2.58 |
| To separate apartments, 1 hr. rating | sq. ft. | 1.29 |
| To enclose fire stairs and/or fire corridor, 1 or 2 hrs. rating | sq. ft. | 1.29/2.58 |
| To enclose cellar, common area rooms 1 or 2 hrs. rating | sq. ft. | 1.29/2.58 |
| To enclose bath and/or kitchens | sq. ft. | 1.29 |
| Dry-wall, impervious to water, for bathroom use | sq. ft. | 1.93 |
| Note: All gypsum board descriptions and prices are finished, i.e. taped and spackled. | ||
| INSULATION | ||
| Wall Insulation (R-11) | sq. ft. | 0.32 |
| Roof Insulation (R-30) | sq. ft. | 0.64 |
| TILE AND FLOORINGS | ||
| Tile repair in residential bathroom | sq. ft. | 7.61 |
| Tile work in residential bathroom (new base only) | bathroom | 64.35 |
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(7) Specialities
| Mail Boxes | each | 56.84 |
|---|---|---|
| Floor Signs | each | 12.87 |
| Peephole Bell Chain on Existing Door | per door | 64.35 |
| Smoke Detector, Hard Wired | each | 128.70 |
| Intercom in Buildings with 8 or more units | per D.U. | 152.25 |
| Bell and Buzzer System | per D.U. | 50.75 |
~
(8) Equipment
~
(9) Conveying Systems
| ELEVATORS | ||
|---|---|---|
| New Elevator: Base Price | each | 57,915.90 |
| Additional | per floor | 7,722.12 |
| Seal Off Shaft | per floor | 514.81 |
| Service Car | per floor | 15,225.00 |
~
(10) Mechanical
| HEAT AND HOT WATER | ||
|---|---|---|
| Hot Water Heater, Gas Fired, 40 Gal. | each | 321.76 |
| Hot Water Heater, Electric, 40 Gal. | each | 450.46 |
| Separate Domestic Central | per D.U. | 321.76 |
| Hot Water System Central Heating System, Gas or Oil, Including Piping and Radiators | per D.U. | 3,861.06 |
| Central Boiler, Gas or Oil | per D.U. | 1,287.02 |
| Gas Fired Heater, Residential | each | 965.27 |
| Gas Meter: Lines (3/4”) to Individual D.U. | lin. ft. | 7.61 |
| Electric BaseboardHeater to Heat 1,000 Sq. Ft. | per D.U. | 1,930.53 |
| New Radiator or Convector | each | 450.46 |
| Radiator: I. Valve and Air Vent | each | 96.53 |
| Radiator: II. Valve and Steam Trap | each | 115.83 |
| Gas Riser for Heat or Hot Water | per D.U. | 772.21 |
| Gas Riser for Cooking | per D.U. | 643.51 |
| Gas-Fired Hot Water Boiler for Individual Dwelling Unit, Installed with Piping, Venting and Valving | per D.U. | 4,504.57 |
| Plumbing Valve on Existing Fixture | each | 45.05 |
| Mechanical Ventilation (Including Exhaust Ducts) for Internal Units (with Existing Shaft) | ||
| – Bathroom | each | 304.50 |
| – Kitchen | each | 365.40 |
| – Fan (Including Wiring) | each | 609.00 |
| WATER DISPOSAL AND PLUMBING | ||
| Water Closet | each | 231.66 |
| Bath Tub w. Trim | each | 463.33 |
| Shower Body, Piping with Trim | each | 160.37 |
| Kitchen Sink with Trim | each | 231.66 |
| Lavatory with Trim | each | 193.05 |
| Sink Faucet | each | 96.53 |
| Copper pipe (1/2”)+ | lin. ft. | 6.44 |
| Copper pipe (3/4”)+ | lin. ft | 9.01 |
| Replace Inadequately Sized Sink Trap | each | 193.05 |
| Waste and Trap for Existing Tub | each | 208.08 |
| Lead Bend for Water Closet | each | 257.40 |
| New Water Riser and Branches | per D.U. | 1,480.07 |
| New Water Main Assuming 6-story building 2”copper main street main on same of street as building2 | each | 3,552.50 |
| Replace Sprinkler Head | each | 38.61 |
| Sprinkler System, New, Based on Per Head | each | 261.87 |
| Relocate Existing Sprinkler Head | each | 193.05 |
| Siamese Connection** | each | 772.21 |
| Fire Pump** | each | 15,444.24 |
| Alarm Valve** | each | 965.27 |
| New Standpipe Main** | each | 9,009.14 |
| Siamese, Check Valve** | each | 1,544.42 |
| Siamese, Check Valve with Piping and Water Flow Alarm** | each | 3,861.06 |
| Roof Tank 5,000 Gal. Inc. Structural Supports** | each | 19,305.30 |
| New Water Meter: | ||
| 2” | each | 2,030.00 |
| 3” | each | 3,045.00 |
| 4” | each | 4,060.00 |
| AIR DISTRIBUTION | ||
| Supply Air Fan or Roof Exhaust Fan | each | 487.20 |
| Wall Exhauster | each | 436.45 |
| Fire Damper and Grill in Existing Shaft | each | 64.35 |
| Turbine Fan in Existing Shaft | each | 193.05 |
| Provide Ventilation for Enclosed Central Heating System Equipment | each | 1,287.02 |
| VENTILATION EXHAUST RISER | ||
| Kitchenette | each | 386.11 |
| Bath | each | 321.76 |
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(11) Electrical
| Panel Board with Separate Electric Riser, Single Phase, Three Wire Service | each | 900.91 |
|---|---|---|
| Single Pole Switch Outlet Fully Installed | each | 77.22 |
| Lighting Outlet, Fully Installed | each | 128.70 |
| New Fixture on Switch, Fully Installed | each | 193.05 |
| Hall Lighting Outlet, Fully Installed | each | 154.44 |
| 110 V Outlet | each | 116.73 |
| 110 V Outlet (Ground Fault Interrupter Electrical Meter: | each | 137.03 |
| – Panel & Rough Wiring | building | 1,319.50 |
| – Meter (Assembly) Plan | per D.U. | 167.48 |
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(12) Municipal Filing Fees, Professional Fees, Local Law Compliance and Extraordinary Costs of Legalization
| Municipal fees for filing necessary for Code Compliance (e.g. Dept. of Buildings Alteration Application, City Planning Commission Special Permit, etc.). Does not include regular annual filings for inspections or regulation. | Actual fee charged |
|---|---|
| All Architectural and Engineering Fees | Maximum 7 percent of approved, necessary and reasonable costs of Code Compliance items in categories 1 - 12 of this schedule. |
| Legal Fees – costs incurred in obtaining financing for Code Compliance | Maximum 4 percent of approved necessary and reasonable costs of Code Compliance for cost items in categories 1 - 12 of this schedule. |
| Local Law Compliance (Handicapped, Landmarks and Asbestos) | Approved necessary and reasonable costs of Code Compliance, reviewed and determined by the Loft Board case by case. |
| Extraordinary Costs of Legalization (construction management fees; overtime costs for alterations required to be done after hours; and excessive costs above scheduled allowance resulting from individual building characteristics) | Maximum 7.5 percent for this category of approved, necessary and reasonable costs of Code Compliance. |
~
1 Includes concrete plan.
2 All other situations will be resolved on a case by case basis.
+ Plumbing items include necessary pipe installation. These items are for replacement work only.
* The figures in this final cost schedule have been calculated by using the 1989 prices, published in the City Record on August 13, 1990, multiplied by 1.5 percent, the yearly index for 1990.
** These items will only be considered as necessary and reasonable when installation is mandated resulting from other required code compliance work.
The following Department of Buildings memoranda are included here for informational purposes only and not for comment. These directives are referred to in 29 RCNY § 2-01(d)(2).
§ 2-01.1 Failure to Take Reasonable and Necessary Action to Legalize Building.
(a) Definition of Reasonable and Necessary Action.
(1) Reasonable and necessary action to obtain a certificate of occupancy, as used in § 284(1) of the Multiple Dwelling Law (“MDL”), means deliberate, diligent, and consistent action from the beginning of Article 7-C coverage through the issuance of a final residential certificate of occupancy for the IMD building, or the issuance of a final certificate of occupancy for the residential portions of the IMD building. Failure to take reasonable and necessary action to obtain a residential certificate of occupancy issued pursuant to MDL § 301 is a violation of this section.
(i) Factors to consider. In deciding whether an owner has been taking all reasonable and necessary actions to obtain a certificate of occupancy pursuant to subdivision (a) above, the Loft Board or its staff may consider but not be limited to the following factors:
(A) Whether the owner has filed an alteration application with the New York City Department of Buildings (“DOB”).
(B) Whether the owner has timely cleared all DOB objections to obtain the building permit for the alteration.
(C) Whether the owner timely obtained a building permit after issuance of the Loft Board certification pursuant to 29 RCNY § 2-01(d)(2)(xi).
(D) Whether the building permit for the alteration that the Loft Board certified pursuant to 29 RCNY § 2-01(d)(2)(xi) is in effect.
(E) Whether any other current permit to further the legalization of the residential spaces is in effect.
(F) Whether the owner has timely engaged a contractor to perform the work necessary to obtain a certificate of occupancy.
(G) Whether there has been any stoppage of work due to reasons within the owner’s control.
(H) Whether the owner has timely cleared all DOB objections and violations as required for obtaining a certificate of occupancy.
(I) Whether the owner has timely scheduled all DOB inspections required for obtaining a certificate of occupancy.
(ii) Monthly Reports about Legalization Projects.
(A) Any IMD owner who has not been issued a final residential certificate of occupancy issued pursuant to MDL § 301 for the IMD units must file with the Loft Board a monthly report relating to the legalization projects in the building on the approved Loft Board form, as available on the Loft Board’s website or at the offices of the Loft Board. In the case of IMD buildings owned by a cooperative or a condominium, the cooperative or condominium board is responsible for the filing of the monthly report. The report is due on the first business day of every month.
(B) The report must be signed by the owner of the IMD building and a registered architect or professional engineer.
(C) The information provided in the report may be used as evidence in connection with a Loft Board determination as to whether the owner has exercised all reasonable and necessary action to obtain a final residential certificate of occupancy.
(D) The Executive Director may issue a fine in accordance with 29 RCNY § 2-11.1 for failure to file the legalization report for each report not filed on the first business day of each month.
(E) The filing of a false statement in the monthly report may result in fines in accordance with 29 RCNY § 2-11.1 for each false statement in the monthly report.
(2) An owner may not delegate its obligation to exercise reasonable and necessary action to obtain a final residential certificate of occupancy for the IMD units.
(1) Inspections.
(i) Staff employed or assigned to the Loft Board is authorized to conduct inspections at the direction of the Loft Board or Executive Director to determine if the owner is taking all reasonable and necessary action to obtain a final residential certificate of occupancy issued pursuant to MDL § 301. If an inspection report is prepared, the report is considered a record kept in the regular course of the Loft Board’s business and is deemed prima facie proof of the facts contained therein.
(ii) Such inspections may be used by the Loft Board in determining when a penalty for failure to take all reasonable and necessary action toward obtaining a certificate of occupancy, pursuant to a hearing determination by an OATH Administrative Law Judge, or an ECB hearing officer, abates.
(2) Enforcement Proceedings. At any point prior to the issuance of the final residential certificate of occupancy issued pursuant to MDL § 301, the Loft Board may initiate an enforcement proceeding against an owner for failure to take all reasonable and necessary action to obtain a final residential certificate of occupancy even where the next legalization deadline for the owner to meet, as set forth in 29 RCNY §§ 2-01 et seq. or § 284(1) of the MDL, has not passed. The owner has the right to present to the Loft Board or its representative, within 30 calendar days of delivery of the notice of proceeding by hand, or 35 calendar days of the posting of the notice by mail, a response that includes information as to why that notice should be withdrawn or information regarding mitigating factors the owner wishes the Loft Board to consider in connection with its determination of the amount of the fine to impose. If applicable, the owner may file an application for an extension of the code compliance deadlines pursuant to 29 RCNY § 2-01(b).
(3) Hearings. Hearings will be conducted by OATH Administrative Law Judges or ECB hearing officers, who will determine whether the owner has made a diligent, consistent and good faith effort to obtain a residential certificate of occupancy for the IMD as required by Article 7-C of the MDL. Hearings conducted by OATH must be conducted in accordance with the rules and procedures governing OATH so long as they do not conflict with the Loft Board rules. Hearings conducted by an ECB hearing officer must be conducted following the procedures of ECB hearings.
When the OATH Administrative Law Judge or ECB hearing officer issues a finding that the owner has not exercised all reasonable and necessary action to obtain a final residential certificate of occupancy, he or she shall also recommend a fine in accordance with 29 RCNY § 2-11.1. Such fine accrues 30 calendar days from the date of delivery by hand or 35 calendar days from posting by mail of the notice of an enforcement proceeding, and may continue to accrue until the owner demonstrates compliance with this section.
(4) Defenses. To defend a Loft Board proceeding for failure to exercise all reasonable and necessary action to achieve compliance, an owner must show deliberate, diligent and consistent action to achieve a final residential certificate of occupancy and must document efforts to obtain the residential certificate of occupancy and any impediments to compliance outside of the owner’s control.
(5) Mitigating Factors For Fines. Mitigating factors that may be considered regarding the amount of the fine imposed on the owner may include, but are not limited to, the following:
(i) Within 30 calendar days after the date of the notice, the owner has begun to take reasonable and necessary action to obtain a certificate of occupancy; or
(ii) The owner’s failure to take reasonable and necessary action towards obtaining a certificate of occupancy were for reasons beyond the owner’s control. Examples of such circumstances beyond the owner’s control include, but are not limited to, a requirement for a certificate of appropriateness for modification of a landmarked building, a need to obtain a variance from the Board of Standards and Appeals, or the denial of reasonable access to an IMD unit.
(6) Evidence of violation not requiring hearing.
(i) Failure to file an alteration application to convert the IMD units to residential units within the later of:
(A) 3 months of the effective date of this rule, or
(B) 6 months from receipt of a Loft Board Order granting IMD status to a building or the issuance of an IMD registration number to the owner, or
(C) 6 months from a finding of Article 7-C coverage by a court of competent jurisdiction constitutes a rebuttable presumption that the owner is not engaged in taking reasonable and necessary action to obtain a residential certificate of occupancy or a certificate of occupancy for the residential portions of the building.
(ii) Where the Loft Board has issued certification pursuant to 29 RCNY § 2-01(d)(2)(xi), and an owner has failed to obtain an alteration permit within 3 months from the date of such certification or from the effective date of this rule, whichever is later, such failure to obtain the permit constitutes a rebuttable presumption that the owner is not engaged in taking reasonable and necessary action to obtain a residential certificate of occupancy or a certificate of occupancy for the residential portions of the building.
(iii) Where an alteration permit has been issued in connection with the legalization of the residential portions of an IMD building, the failure to maintain the permit in effect until the issuance of a final residential certificate of occupancy or a certificate of occupancy for the residential portions of the building constitutes a rebuttable presumption that the owner is not engaged in reasonable and necessary action to obtain a residential certificate of occupancy or a certificate of occupancy for the residential portions of the building.
(iv) Failure to maintain a temporary certificate of occupancy for the residential portions of the IMD building, if one was previously issued, constitutes a rebuttable presumption that the owner is not engaged in reasonable and necessary action to obtain a residential certificate of occupancy.
(7) Upon finding a violation pursuant to paragraph (6) of this subdivision, the Loft Board’s Executive Director may issue a notice to the owner stating an intent to find the owner in violation of its obligation to exercise all reasonable and necessary action. The Loft Board’s Executive Director may issue a fine in accordance with 29 RCNY § 2-11.1.
The owner has the right to present to the Loft Board’s Executive Director or his or her representative within 30 calendar days of delivery of the notice by hand, or 35 calendar days of the posting of the notice by mail, a response that includes information as to why the notice should be withdrawn and/or information regarding mitigating factors pursuant to paragraph (5) of this subdivision the owner wishes to be considered in connection with Executive Director’s determination of the amount of the fine to be imposed.
Following the receipt of a timely response from the owner, the Executive Director may either withdraw the notice, or may impose a fine in accordance with 29 RCNY § 2-11.1. Unless the owner first demonstrates compliance with this section, such fine begins to accrue 30 calendar days after delivery by hand or 35 calendar days after the posting of the notice by mail and continues to accrue until the owner demonstrates compliance with this section. If necessary, the owner may file an application for an extension of the code compliance deadlines, pursuant to 29 RCNY § 2-01(b).
§ 2-02 Harassment.
(a) Applicability. These harassment rules apply to all harassment applications filed with the Loft Board, after September 11, 2013, the effective date of this amended rule. Harassment applications are subject to the harassment rule in effect on the date of the initial filing of the application.
All orders of harassment must be kept in the Loft Board’s records and in the office of the City Register in accordance with the provisions of 29 RCNY § 2-02(d)(l)(iii).
Harassment means any course of conduct or single act engaged in by the landlord or any other person acting on its behalf that interferes with or disturbs the comfort, repose, peace or quiet of an occupant in the occupant’s use or occupancy of its unit if such conduct is intended to cause the occupant to vacate the building or unit, or to surrender or waive any rights of such occupant under the occupant’s written lease or other rental agreement or pursuant to Article 7-C. Harassment may also include any act or course of conduct by a prime lessee or any person acting on his or her behalf that would constitute “harassment” if engaged in by the landlord, against any of the prime lessee’s current or former subtenants who are residential occupants qualified for the protection under Article 7-C.
Harassment includes, but is not limited to, the intentional interruption or discontinuance of or willful failure to provide or to restore services customarily provided in the building or required by written lease or other rental agreement or, for residential occupants qualified for the protections of Article 7-C, by the Loft Board rules regarding minimum housing maintenance standards. Harassment does not include either the lawful termination of a tenancy or lawful refusal to renew or extend a written lease or other rental agreement, or acts performed in good faith and in a reasonable manner for the purposes of operating, maintaining or repairing any building or part thereof.
There is no requirement that the landlord’s actions or inactions be illegal to constitute harassment. The Loft Board may find that a particular act constitutes harassment whether it was directed toward one tenant or multiple tenants.
Landlord means the owner of an IMD, the lessee of a whole building all or part of which contains IMD units, or the agent, executor, assignee of rents, receiver, trustee, or other person having direct or indirect control of such building.
Occupant, unless otherwise provided, means a residential occupant qualified for the protections of Article 7-C, or any other residential tenant or nonresidential tenant of an IMD building.
Ongoing Course of Conduct, for purposes of this section, means actions or inactions by or on behalf of the landlord that when considered together, show a continuous pattern of behavior.
Continuous Pattern of Behavior, includes, but is not limited to, acts, at least one of which happened within 180 calendar days preceding the filing of the harassment application, that show a sequence of events that are similar in nature or a sequence of events that are reasonably related.
(1) It is unlawful for a landlord or any other person acting on its behalf to engage in conduct constituting harassment against any occupant of an IMD building. A harassment application may be filed with the Loft Board by occupant(s) of an IMD building. The application must be filed on a form approved by the Loft Board and will be processed in accordance with 29 RCNY § 1-06, and the specific requirements provided below.
(2) (i) The description of the conduct complained of must contain the actual or approximate date(s) on which such conduct occurred, the manner and location of each occurrence, and if the complaint is filed on behalf of more than one occupant, the occupants against whom the occurrence was directed. The application must be filed within 180 calendar days of the conduct complained of, or where an ongoing course of conduct is alleged, as defined in subdivision (b), the application must be filed within 180 calendar days of the last occurrence.
(ii) [Reserved.]
(iii) If the Loft Board finds that an applicant has filed a harassment application in bad faith or in wanton disregard of the truth, the applicant may be subject to a civil penalty as determined by the Loft Board in 29 RCNY § 2-11.1.
(3) The applicant must serve all affected parties, as defined in 29 RCNY § 1-06(a)(2), with a copy of the application in accordance with the terms and procedures requiring service and proof of service of the application as described in 29 RCNY § 1-06(b).
Where a harassment application solely alleges that the owner’s challenge of a sale of improvements is frivolous, the applicant must serve only the owner as an affected party.
Instructions for filing an answer (“Instruction Form”) and an answer form must be enclosed with the copy of the application sent to the affected parties. Instructions for filing an answer must advise the owner that a finding of harassment may affect the owner’s ability to decontrol or to obtain market rentals for covered IMD units pursuant to MDL §§ 286(6) and 286(12) and the Loft Board’s rules. Inclusion of the Loft Board’s approved Instruction Form with the application at the time of service constitutes compliance with this paragraph.
(4) Parties have 15 calendar days after the date on which service of the application was completed, calculated from the mailing date shown on the certificate of mailing filed with the Loft Board, to file an answer with the Loft Board. Five copies of the answer with proof of service of the answer on the applicant(s), as described in 29 RCNY § 1-06(e), must be filed at the offices of the Loft Board.
(5) (i) Following the expiration of the deadline for filing an answer, the Loft Board or the Office of Administrative Trials and Hearings (“OATH”) will send, by regular mail, a notice of conference to the affected parties. The notice of conference will schedule a date and time for an informal conference as soon as possible, but no sooner than 15 calendar days from the date of mailing the notice of conference. The notice of conference sent to the owner will advise the owner that a finding of harassment may affect the owner’s ability to decontrol or to obtain market rentals for covered IMD units pursuant to MDL §§ 286(6) and 286(12) and the Loft Board’s rules.
(ii) The informal conference may be conducted by the Loft Board staff or OATH with the affected parties in an effort to resolve and alleviate the conditions and events alleged. Where resolution to the mutual satisfaction of the parties is achieved, a stipulation containing the terms of the resolution and the penalties, if any, for its breach must be executed by the parties and filed with the Loft Board for its approval on the Loft Board’s summary calendar.
(6) Where charges of harassment remain unresolved following the informal conference, a hearing on the allegations in the harassment application will be held in accordance with the procedures of 29 RCNY § 1-06 and the following:
(i) The hearing will be limited to the charges contained on the original application, as modified at the conference, and any additional charges of harassment arising as a result of conduct occurring after the conference.
(ii) The acts performed by an occupant in good faith and in a reasonable manner for the purposes of operating a nonresidential conforming use will be presumed not to constitute harassment. The presumption may be rebutted by a showing that the acts were performed on the landlord’s behalf and intended to cause another occupant to vacate the building, or its unit or to surrender or waive any rights of such occupant under the occupant’s written lease or other rental agreement or pursuant to Article 7-C.
(iii) A finding by the Loft Board that the owner has willfully violated the code compliance timetable or has violated the code compliance timetable more than once may be considered as evidence of harassment. (See rules on Code Compliance – 29 RCNY § 2-01(c)(5)).
(iv) The issuance of a municipal vacate order for hazardous conditions as a consequence of the owner’s unlawful failure to comply with the code compliance timetable will result in a rebuttable presumption of harassment. (See rules on Code Compliance – 29 RCNY § 2-01(c)(6)).
(v) A finding by the Loft Board of unreasonable and willful interference with an occupant’s use of its unit by the landlord or its agents may be considered as evidence of harassment. (See rules on Code Compliance – 29 RCNY § 2-01(h)).
(vi) A finding by the Loft Board of a willful violation of Minimum Housing Maintenance Standards may be considered as evidence of harassment of residential tenants. (See rules on Enforcement of Minimum Housing Maintenance Standards – 29 RCNY § 2-04(e)(6)).
(vii) A finding by the Loft Board that the filing of an application by the owner objecting to the sale of improvements was frivolous may be considered as evidence of harassment of residential tenants. An objection to the sale may be found to be frivolous on grounds including, but not limited to, the following:
(A) That it was filed without a good faith intention to purchase the improvements at fair market value or
(B) That the owner’s valuation of the improvements has no reasonable relationship to the fair market value, as determined by the Loft Board. (See rules on Sales of Improvements – 29 RCNY § 2-07(g)(1)(ii)). At the occupant’s request the Loft Board will issue its findings on a pending harassment application based upon the allegation that the owner’s objection to the sale of improvements is frivolous, or any other pending harassment application in the building, concurrently with its determination of the owner’s challenge.
(viii) A determination by a civil or criminal court of landlord harassment of an occupant(s) may be considered as evidence of harassment.
(1) (i) Effect of harassment finding. A landlord that is found by the Loft Board to have harassed an occupant will not be entitled to the decontrol of or market rental for any IMD unit after a sale of improvements pursuant to MDL § 286(6) of Article 7-C and these rules. This restriction applies to any sale of improvements that takes place on or after the date of the order containing the finding of harassment until the date the order is terminated in accordance with 29 RCNY § 2-02(d)(2). This restriction may also apply to any sale of rights pursuant to MDL § 286(12) and 29 RCNY § 2-10 that takes place on or after the date of the order containing the finding of harassment until the date the order is terminated in accordance with 29 RCNY §§ 2-02(d)(2).
(ii) Civil penalty for a finding of harassment. If the Loft Board finds that a landlord harassed an occupant, the landlord may be liable for a civil penalty as determined by the Loft Board in 29 RCNY § 2-11.1 for each occurrence that is found to constitute harassment. Registration as an IMD will not be issued or renewed for any building for which fines have been imposed for landlord harassment until all fines have been paid.
(iii) Notice of a harassment finding. The order containing the finding of harassment is binding on all individuals or parties who succeed to the landlord’s interest in the premises until the harassment order is terminated in accordance with 29 RCNY § 2-02(d)(2) below. A copy of the Loft Board’s order containing the finding of harassment will be mailed to the applicant, the owner, and the affected parties to the proceeding. Notice of such order will be filed by the Loft Board in the office of the City Register.
(iv) Effect on other relevant laws. The procedure provided in this rule operates in addition to any procedures provided under other provisions of law and must not be construed to alter, affect or amend any right, remedy or procedure that may exist under any other provisions of law, including, but not limited to the following:
(A) An occupant may apply to the Supreme Court of the State of New York for an order enjoining a landlord from harassment pursuant to § 235-d(4) of the Real Property Law and may pursue all other remedies in relation to harassment including the award of damages before a court of competent jurisdiction.
(B) Upon the request of a residential occupant who either vacates, has been removed from or is otherwise prevented from occupying its unit as a result of harassment, a landlord must take all reasonable and necessary action to restore the occupant to its unit, provided that such request is made within 7 calendar days after removal, pursuant to § 26-521(b) of the New York City Administrative Code.
(C) Residential occupants of IMDs are afforded the protections available to residential occupants pursuant to the Real Property Law and the Real Property Actions and Proceedings Law, including § 223-b of the Real Property Law regarding retaliatory evictions, notwithstanding that such occupants may reside in an owner-occupied IMD having fewer than 4 residential units.
(D) Special proceedings pursuant to Article 7-A of the Real Property Actions and Proceedings Law are available to all occupants of IMDs, notwithstanding that such IMDs may contain less than 3 residential units.
(v) Violation of 29 RCNY § 2-04. If the OATH Administrative Law Judge assigned to the case finds that the acts alleged by the occupant do not constitute harassment, the Administrative Law Judge may, in the alternative and without the need for the applicant to amend his or her application or pleadings, consider whether the facts alleged in the application describe an owner’s failure to provide a service or an owner’s unlawful diminution of services. If so, upon notice to the owner, the application may be processed pursuant to the Loft Board’s rules regarding diminution of services as described in 29 RCNY § 2-04. Upon notice that the facts alleged will be processed as a diminution of services claim, the owner may seek permission from the Administrative Law Judge to file a response to the claim of diminution of services. The Administrative Law Judge may recommend a fine, in accordance with 29 RCNY § 2-11.1 for any finding of diminution of services.
(2) (i) Termination of Harassment Findings. Where the Loft Board has issued a finding of harassment, the landlord may apply to the Loft Board pursuant to 29 RCNY § 1-06, for an order terminating the harassment finding following the expiration of the period of time specified in the harassment order. The order containing the finding of harassment must specify the period of time, within a range of 1 to 3 years from the date of the order of harassment, during which the landlord is barred from applying for an order of termination. However, where a landlord has been convicted of a crime for conduct found by the Loft Board to constitute harassment, the landlord may apply for an order of termination only after at least 5 years have passed since the date of the order of harassment. After the period during which the landlord is barred from applying for termination of the harassment finding has expired, the Loft Board may terminate the harassment finding if it finds that:
(A) Since notification of the order, the landlord has not engaged in the prohibited conduct or any other conduct which constitutes harassment;
(B) The landlord has achieved compliance with the fire and safety standards of Article 7-B, alternative building codes or provisions of the MDL, as provided in 29 RCNY § 2-01(a) governing Code Compliance Work and as may be exhibited by the issuance of a temporary certificate of occupancy, or Article 7-B certification on the approved Loft Board form, or if Article 7-B compliance was achieved prior to the date of the order of harassment, has obtained a final residential certificate of occupancy for the IMD units;
(C) The landlord has paid all civil penalties assessed in the order of harassment, and there are no other orders of harassment outstanding for the IMD building; and
(D) The landlord is in compliance with 29 RCNY § 2-05 relating to registration of the IMD building.
(ii) Orders Terminating Harassment Findings. An order terminating a prior Loft Board finding of harassment applies prospectively only, and the owner is not entitled to the decontrol of or market rental for any residential unit for which a sale of improvements pursuant to MDL § 286(6) and these Rules has taken place in the period from the date of the order finding harassment to the date of the order terminating such finding.
(iii) Suspension or Revocation of Termination of Harassment Orders. If the Loft Board at a regularly scheduled meeting or at a special session called in accordance with 29 RCNY § 1-03(a) has reasonable cause to believe that harassment is occurring or has occurred at the IMD after the date of an order terminating a prior finding of harassment, the Loft Board shall suspend such order of termination immediately. Notice of such suspension shall be mailed to the landlord and to all occupants. Upon the landlord’s written request, the Loft Board shall schedule a hearing as soon as reasonably possible but not later than thirty days after the date of receipt of such request to determine whether the order of termination should be reinstated or revoked.
(iv) Filing at the City Register. The order of termination or suspension, reinstatement or revocation of termination must be included among the IMD registration material on file with the Loft Board. The Loft Board will file the notice of termination or notice of suspension, reinstatement or revocation of termination in the office of the City Register.
(1) “Prime lessee.” For the purposes of this harassment rule, the term “prime lessee” means the party with whom the landlord entered into a lease or rental agreement for use and occupancy of a portion of an IMD building, which is being used residentially, where the prime lessee is not the residential occupant qualified for protection of the unit, regardless of whether the lessee is currently in occupancy of any portion of the space the prime lessee has leased from the landlord or whether the lease remains in effect.
(2) It is unlawful for a prime lessee or any other person acting on his or her behalf to engage in conduct that would constitute “harassment” if engaged in by the landlord, as defined in 29 RCNY § 2-02(b), against any of the prime lessee’s current or former subtenants who are residential occupants qualified for the protections of Article 7-C. A harassment application may be filed with the Loft Board by a residential occupant qualified for the protections of Article 7-C against the prime lessee. The application will be processed in accordance with the procedures described in 29 RCNY § 2-02(c). The deed owner of the building must be listed as an affected party in all applications brought under this subdivision (e).
(3) (i) If the Loft Board finds that a prime lessee harassed an occupant, the prime lessee may be liable for a civil penalty as determined by the Loft Board in accordance with 29 RCNY § 2-11.1 for each occurrence that is found to constitute harassment.
(ii) A prime lessee found by the Loft Board to have harassed an occupant is not entitled to recover subdivided space pursuant to 29 RCNY § 2-09(c)(5)(i) and (c)(5)(v) relating to subletting and is not entitled to the rent adjustment provided for in 29 RCNY §§ 2-09(c)(6)(ii)(D)(b).
(4) (i) After the period of time barring the owner from terminating a harassment finding provided in the Loft Board order, the prime lessee may apply to the Loft Board pursuant to 29 RCNY § 1-06 for an order terminating such finding. The order containing the finding of harassment will specify the period of time, within a range of 1 to 3 years from the date of the order of harassment, during which the prime lessee will be barred from applying for an order of termination. However, where a prime lessee has been convicted of a crime for conduct found by the Loft Board to constitute harassment, the prime lessee may apply for an order of termination only after at least 5 years have passed since the date of the order of harassment. The Loft Board may grant such relief if it finds that:
(A) Since notification of the order the prime lessee has not engaged in the prohibited conduct and has not engaged in any other conduct which constitutes harassment, and
(B) The prime lessee has paid all civil penalties assessed in the order of harassment, and there are no other orders of harassment outstanding for the prime lessee.
(ii) An order terminating a prior Loft Board finding of harassment by a prime lessee applies prospectively only.
§ 2-03 Hardship Applications.
(a) Procedures.
(1) Who may file.
(i) The owner of an interim multiple dwelling registered with the Loft Board may file an application for exemption of a building or portion thereof from Article 7-C of the Multiple Dwelling Law on the basis that compliance in obtaining a residential certificate of occupancy would cause hardship for any of the reasons set forth in 29 RCNY § 2-03(b) below.
(ii) A lessee of a whole building, any portion of which is an interim multiple dwelling registered with the Loft Board, may file an application for exemption from Article 7-C, provided that no application filed by a lessee shall be considered by the Loft Board unless the owner of the building consents in writing to the filing of such application.
(iii) A duly authorized agent (including the attorney) of the owner of an interim multiple dwelling registered with the Loft Board may file an application for exemption on behalf of the owner.
(2) Filing deadline.
(i) Notices of application for exemption due to hardship for a building or portion thereof must be submitted to the Loft Board by no later than June 30, 1983 pursuant to § 285(2) of the Multiple Dwelling Law. Such notices shall be filed by letter from the owner, lessee of the whole building or agent and shall only be accepted for buildings registered or which by June 30, 1983 had applied to register as interim multiple dwellings with the Loft Board.
(ii) The applicant must perfect his/her/its application by no later than October 31, 1983.
(iii) Notwithstanding any provisions of subparagraphs (i) and (ii) of this paragraph (2) to the contrary, the owner, lessee of the whole building or agent of a registered interim multiple dwelling which is subject to coverage under Article 7-C solely pursuant to MDL § 281(4) shall file his application on or before April 27, 1988 pursuant to MDL § 285(2).
(iv) Notwithstanding any provisions of subparagraphs (i), (ii) and (iii) of this paragraph (2), applications for a hardship exemption regarding interim multiple dwellings covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010 must be filed on or before March 21, 2011, in accordance with MDL § 285(2).
(v) Notwithstanding any provisions of subparagraphs (i), (ii), (iii) and (iv) of this paragraph (2), applications for a hardship exemption regarding interim multiple dwellings covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 4 of the Laws of 2013 must be filed before June 11, 2014, in accordance with MDL § 285(2).
(3) Perfecting hardship applications.
(i) An application shall only be accepted for a building with a current interim multiple dwelling registration.
(ii) (A) The application shall be in a form acceptable to the Loft Board and shall be consistent with the requirements of these regulations, the Board’s regulations relating to applications to the Board, 29 RCNY §§ 1-06(a) to (j), and fees, 29 RCNY § 2-11. The applicant must: (a) indicate the basis for the application, (b) identify the residential units for which exemption is sought, and (c) state the specific claims for exemption for the building or portion of the building.
(B) Deadlines for Interim Multiple Dwellings Subject to Article 7-C Pursuant to MDL § 281(1). The applicant must provide all information necessary or appropriate by no later than October 31, 1983 in order for the application to be considered. An additional time period of no more than sixty days for the submission of all required documentation in support of the completed application may be requested and will be granted if good cause is shown. Where an applicant is unable to file all necessary and appropriate information by October 31, 1983, due to the absence of legalization regulations, but has filed submissions and paid the filing fee such applicant may request additional time to provide all necessary and appropriate information within 30 days of the effective date or legalization regulations adopted by the Loft Board.
(C) Deadlines for Interim Multiple Dwellings Subject to Article 7-C Pursuant to MDL § 281(4). Notwithstanding the foregoing, an applicant who timely filed his application on or before April 27, 1988 for a hardship exemption involving an interim multiple dwelling subject to coverage under Article 7-C pursuant to MDL § 281(4) must provide all additional information necessary or appropriate in support of such application on or before February 21, 1993.
(D) Deadlines for Interim Multiple Dwellings Subject to Article 7-C Pursuant to MDL § 281(5). Notwithstanding the foregoing, an applicant who timely filed its hardship exemption application involving an interim multiple dwelling subject to coverage under Article 7-C pursuant to MDL § 281(5) must provide information to substantiate the hardship exemption claim at the time of filing, except as provided 29 RCNY § 2-03(a)(3)(iii).
(iii) In processing the application, the Loft Board may demand such additional information as it deems necessary or appropriate in making a determination. Failure of the applicant to provide any such information required by the Loft Board may result in the denial of the application.
(iv) Applications for exemption shall not be considered unless the owner has also filed an alteration application with the Department of Buildings. A copy of such alteration application must accompany each hardship application including two copies of the submitted plans and such additional copies of the plans as the Board may require. The Loft Board may vote to waive the requirement that an alteration application be filed and proceed with the consideration of the application for exemption. The approval of such a waiver shall apply only to the consideration of a hardship application and shall in no way affect the owner’s obligation to file an alteration application for all other purposes as required by § 284 of the Multiple Dwelling Law. In deciding whether to waive the requirement that an alteration application be filed, the board will consider the following criteria:
(A) whether the information that would be contained in the alteration application is already available in other records or could be made available in an alternate form in other records or could be made available in an alternate form acceptable to the Board; and
(B) whether hardship can be proved without the information contained in the alteration application.
(v) Processing of an owner’s application for exemption shall be in accordance with the rules regarding applications to the Board (Regulations for Internal Board Procedures – 29 RCNY § 1-06(a) to (j), except as set forth below. These rules provide for the service of the application on all affected parties, opportunity to answer in writing, and the conducting of informal conferences and administrative hearings. If a perfected application appears to the staff to be well rounded, there shall be conducted an administrative hearing following notice as provided pursuant to Internal Board Procedures at least sixty days in advance of the hearing date.
(1) Basis for application. The basis for applying for an exemption due to hardship is that compliance with Article 7-C of the Multiple Dwelling Law in obtaining a legal residential certificate of occupancy would cause hardship for one of the following two reasons.
(i) Adverse impact. Compliance would cause an unreasonably adverse impact on a non-residential conforming use occupant existing on:
(A) June 21, 1982 for a building subject to coverage under Article 7-C pursuant to MDL § 281(1),
(B) July 27, 1987 for a building which is subject to coverage under Article 7-C pursuant to MDL § 281(4),
(C) June 21, 2010 for an IMD covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapters 135 or 147 of the Laws of 2010, or
(D) June 1, 2012 for an IMD covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 4 of the Laws of 2013.
(ii) Infeasible costs. The costs of compliance would render legal residential conversion financially infeasible.
(2) Appropriate tests.
(i) Adverse impact. The test for unreasonably adverse impact on a non-residential conforming use occupant existing on the applicable date referenced in 29 RCNY § 2-03(b)(1)(i) shall be whether legal residential conversion would necessitate displacement of such occupant. An owner making a claim on this basis will be required to produce as part of the application, evidence to substantiate the claim. Displacement of non-residential conforming use occupants may include instances where:
(A) all or a critical portion, adversely affecting the conduct of business, of the space of an existing non-residential conforming use occupant would be lost as a result of the residential conversion;
(B) the nature of an existing non-residential conforming use would render legal residential conversion to be infeasible or illegal by causing an imminent peril to the health and safety of residential occupants;
(C) the result of the legal residential conversion would be unreasonably disruptive to the business of the non-residential conforming use; or
(D) the inability of an owner who purchased the building before June 21, 1982, or before July 27, 1987 for a building subject to coverage under Article 7-C pursuant to MDL § 281(4), to expand his/her/its business which is an existing non-residential conforming use due to legal residential conversion would result in the elimination of existing jobs.
(ii) Infeasible costs. The test for cost infeasibility shall be that the owner would be unable to attain a reasonable return on his/her/its investment; not maximum return on investment.
(A) Reasonable rate of return on the owner’s investment shall be defined as a net annual return of five percent or more where net annual return is the percentage amount by which the annual earned income from the building exceeds the annual operating expenses of the building.
(B) Earned income shall mean the maximum annual collectible rent for the building, including any and all escalators, for both residential and non-residential units, plus miscellaneous income from all other sources in the building including vending machines, and sign rentals. The Loft Board shall impute a rental value for vacant units or units occupied either residentially or non-residentially by the landlord, any member of the landlord’s family or an employee of the landlord, at the fair market value for the space, or if subject to Article 7-C at the maximum legal rent.
(C) Operating expenses shall consist of the actual, reasonable cost of: fuel, labor, utilities, taxes other than income or corporate franchise taxes, fees, permits, necessary contracted services and non-capital repairs, insurance, parts and supplies, management fees and other administrative costs and interest on a bona fide mortgage. Criteria to be considered in determining a bona fide mortgage other than an institutional mortgage shall include: condition of the property; location of the property, the existing mortgage market at the time the mortgage is placed, the term of the mortgage, the amortization rate, the principal amount of the mortgage, security and other terms and conditions of the mortgage.
(D) (a) No application shall be approved unless the owner’s equity in such building exceeds five percent of:
(1) the arms length purchase price of the property;
(2) the cost of any capital improvements for which the owner has not collected or will not collect a surcharge;
(3) any repayment of principal of any mortgage or loan used to finance the purchase of the property or, any capital improvements for which the owner has not collected or will not collect a surcharge; and
(4) any increase in the equalized assessed value of the property which occurred subsequent to the first valuation of the property after purchase by the owner.
(b) For the purposes of this paragraph, owner’s equity shall mean the sum of:
(1) the purchase price of the property less the principal of any mortgage or loan used to finance the purchase of the property,
(2) the cost of any capital improvement for which the owner has not collected or will not collect a surcharge less the principal of any mortgage or loan used to finance said improvement,
(3) any repayment of the principal of any mortgage or loan used to finance the purchase of the property or any capital improvement for which the owner has not collected or will not collect a surcharge, and
(4) any increase in the equalized assessed value of the property which occurred subsequent to the first valuation of the property after purchase by the owner.
(E) An owner of a building subject to Article 7-C pursuant to MDL § 281(1) making a hardship exemption claim based on infeasibility will be required to produce, as part of the application, evidence, subject to audit, based on a representative consecutive 12 month period beginning no earlier than January 1, 1982, or, for a building subject to coverage under Article 7-C pursuant to MDL § 281(4), no earlier than January 1, 1987, of the current net annual return for the building and the projected net annual return following legalization including, but not limited to, current and projected earned income, operating expenses and equity information.
(F) In order to bring a hardship exemption claim based on infeasibility, the owner of an interim multiple dwelling covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapters 135 or 147 of the Laws of 2010 must include in the application evidence, subject to audit, of the current net annual return for the building and the projected net annual return following legalization including, but not limited to, current and projected earned income, operating expenses and equity information. Such evidence must be based on a consecutive 12 month period beginning no earlier than January 1, 2010.
(G) In order to bring a hardship exemption claim based on infeasibility, the owner of an interim multiple dwelling covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 4 of the Laws of 2013 must include in the application evidence, subject to audit, of the current net annual return for the building and the projected net annual return following legalization including, but not limited to, current and projected earned income, operating expenses and equity information. Such evidence must be based on a consecutive 12 month period beginning no earlier than January 1, 2012.
(H) Inability to make a reasonable return on investment may include situations where the necessary and reasonable costs of compliance will cause residential units to rent at above prevailing market levels.
(3) Processing guidelines.
(i) Applications for exemption due to hardship will not be granted if the result of self-created hardship.
(ii) Applications for exemption due to hardship will not be granted if compliance can be reasonably achieved through:
(A) alteration of units,
(B) relocation of tenants (residential) or non-residential conforming use) to vacant space within the building,
(C) re-design of space, or
(D) application for a non-use related variance, special permit, minor modification or administrative certification. Owners filing hardship applications shall be required to make a reasonable attempt to cooperate with the tenants to achieve compliance through the methods listed above.
(iii) In considering such applications, the Loft Board shall require the owner and tenants to consider constructive suggestions for alternatives to the proposed legalization plan, which would allow for the minimum vacating of residential occupancy, without adversely affecting existing non-residential conforming uses.
(1) In resolving applications for exemption due to hardship, the Loft Board shall grant only the minimum relief necessary to relieve any hardship.
(2) If the Loft Board approves an application for exemption due to hardship, the building or portion thereof for which the application is approved shall be exempt from Article 7-C of the Multiple Dwelling Law and may be converted to non-residential uses which must be in conformance with the zoning resolution and compatible with existing residential use. As a condition of approval of such application, the owner shall file with the Loft Board a certified copy of an irrevocable recorded covenant in form satisfactory to the Loft Board, enforceable by the City of New York for fifteen (15) years from the date of the recording, that the building or portion thereof for which the hardship exemption has been granted will not be re-converted to residential uses during that time. When the Loft Board approves such an application, the owner will be notified of the Board’s intent to approve the application and will be afforded an opportunity of no more than 90 days to file the required covenant. The Loft Board will issue its final order approving the application following receipt of the certified copy of the covenant. If proof of the filing of the required covenant is not filed with the Loft Board within 90 days, the application will be denied and the owner will be required to comply with Article 7-C of the Multiple Dwelling Law.
(3) If the hardship exemption is granted for a portion of the building, the IMD status for such building and the remaining residential units, covered under Article 7-C of the Multiple Dwelling Law in such building, shall not be affected, even if there are less than three qualified units remaining.
(4) In approving an exemption application due to hardship, the Loft Board may fix reasonable terms and conditions regarding the owner’s payment to the residential occupant of any reasonable moving costs and the fair market value of any improvements made or purchased by the residential occupant, and a reasonable time period for relocation, not to exceed one year.
§ 2-04 Minimum Housing Maintenance Standards.
(a) Definitions. As used in these rules, the below terms have the following meanings:
Landlord means the owner of an interim multiple dwelling (“IMD”), the lessee of a whole building, part of which contains IMD units, or the agent, executor, assignee of rents, receiver, trustee, or other person having direct or indirect control of such dwelling.
Residential occupant means an occupant of an IMD unit qualified for protection under Article 7-C of the New York State Multiple Dwelling Law (“MDL”).
(1) Water supply and drainage. The landlord of an IMD building must provide and maintain a supply of pure and wholesome water at all times sufficient in quantity and pressure to provide for sanitary maintenance. The landlord must properly maintain and keep in good repair the building’s plumbing and drainage system. Where water mains are available in the street, every residentially occupied IMD unit must be supplied with water from those mains. The landlord must keep the water free from connection to any unsafe water supply or from cross-connections to any drainage system. Where a landlord of an IMD building installed or installs plumbing fixtures to residentially occupied IMD units, he or she must maintain same in good working order.
(2) Heat.
(i) Except as provided below, where there is a central heating system in an IMD building, the landlord must provide every residentially-occupied IMD unit with heat from that system. As illustrated in the chart below, during the period from October 1 through May 31, centrally supplied heat shall be provided so as to maintain every portion of the dwelling used or occupied for living purposes, between the hours of 6:00 AM and 10:00 PM at a temperature of at least 68 degrees Fahrenheit whenever the outside temperature falls below 55 degrees, and between the hours of 10:00 PM and 6:00 AM at a temperature of at least 55 degrees Fahrenheit whenever the outside temperature falls below 40 degrees Fahrenheit.
(ii) Where the landlord provides a system of gas or electric heating for a residentially-occupied IMD unit, that system may be utilized instead of a central heating system in the instances where a central heating system is lacking, or may otherwise be used to supplement a central heating system. As illustrated in the chart below, during the period from October 1 through May 31, heat from individual systems of gas or electric heat where the landlord pays for operation shall be provided so as to maintain every portion of the residentially-occupied dwelling used or occupied for living purposes, between the hours of 6:00 AM and 10:00 PM, at a temperature of at least 68 degrees Fahrenheit whenever the outside temperature falls below 55 degrees Fahrenheit, and between the hours of 10:00 PM and 6:00 AM at a temperature of at least 55 degrees Fahrenheit whenever the outside temperature falls below 40 degrees Fahrenheit.
| Between the hours | If Temperature Outside | Landlord Must Provide Central Heat |
|---|---|---|
| 6:00 A.M. - 10:00 P.M. | Below 55°F | At least 68°F |
| 10:00 P.M. - 6:00 A.M. | Below 40°F | At least 55°F |
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(iii) To meet his or her obligations to provide heat, the landlord may install individual heating systems within the IMD units to supply all the heat required pursuant to these rules or to supplement the heat supplied by an existing building system, provided that the installation and system are approved for residential use by appropriate City agencies.
(iv) The landlord must not object to the installation by a residential occupant of an individual heating system, provided that:
(A) The installation does not conflict with the landlord’s legalization alteration plans approved by the Department of Buildings or certified by the Loft Board;
(B) The installation and system are approved for residential use by the appropriate City agencies; and
(C) The residential occupant has requested in writing that the landlord install the system and the landlord has refused to comply with the request within 45 days from the date of the request.
(v) The landlord must maintain the IMD building’s central heating systems and the IMD building’s gas or electric heating fixtures and systems supplied to residentially occupied IMD units in proper working order unless the parties otherwise agreed in writing that the residential occupant(s) will be responsible for maintenance of the gas or electric heating fixtures and systems used to heat his or her unit.
(3) Hot water. The landlord must, at all times between the hours of 6:00 a.m. and midnight, supply every bath, shower, washbasin and sink with hot water at a constant minimum temperature of 120 degrees Fahrenheit in all residentially occupied IMD units from a central source of supply or from individual gas or electric hot water heaters, except where such individual heaters have been previously installed, and where responsibility for operation has been assumed by the residential occupant.
(4) Electricity. The landlord must maintain electrical service to all residentially occupied IMD units at all times in order to allow the units to obtain electric power. The intention of this standard is to afford electrical service to all residentially occupied IMD units.
(5) Gas. Where gas service is currently provided to residentially occupied IMD units, the landlord must maintain the service in good working order. The landlord must not unreasonably withhold his or her cooperation if the residential occupant wishes to install gas service at the residential occupant’s cost and expense.
(6) Smoke and carbon monoxide detectors. By no later than thirty days after the date of the Loft Board order granting Article 7-C coverage, coverage pursuant to a registration from the owner or a finding of coverage by a court of competent jurisdiction, all residentially occupied IMD units must be equipped with operational smoke and carbon monoxide detecting devices, either battery operated or receiving their primary power from the building’s electrical service, approved by the appropriate city agencies. If smoke or carbon monoxide detecting devices are not installed within 30 calendar days of the granting of Article 7-C coverage residential occupants are authorized to install them on their own. Where a battery operated smoke or carbon monoxide detecting device is provided and installed by the landlord, the residential occupant of that unit must reimburse the landlord a maximum of 10 dollars for each device. The residential occupant will have one year from the date of installation to reimburse the landlord. All sections of the Housing Maintenance Code relating to smoke and carbon monoxide detectors apply to IMD buildings.
(7) Public lighting. The landlord must provide and maintain electric lighting fixtures for every public hall, stair, fire stair and fire tower on every floor and must have these required lights in all such fixtures turned on at sunset every day and remain on until sunrise the following day. Where natural light is not adequate, the landlord must provide and maintain electrical lighting fixtures for every public hall, stair, fire stair and fire tower on every floor on a 24-hour a day, 7 day a week basis.
(8) Entrance door security. The landlord must properly maintain all existing entrance door security and at a minimum at least one door at the entrance to each building and each unit must have a working lock. All tenants must be provided with keys to all entrance door locks.
(9) Elevator service. The landlord must not diminish nor permit the diminution of legal freight or passenger elevator service and must maintain this service in good working order.
(10) Window guards.
(i) The landlord must provide, install, and maintain, a window guard, of a type deemed acceptable by the New York City Department of Health and Mental Hygiene or any succeeding regulatory agency, and install the window guards pursuant to specifications provided by the New York City Department of Health and Mental Hygiene or any succeeding regulatory agency, on the windows of each unit in which a child or children years of age or younger reside, and on the windows, if any, in the public halls of an IMD building in which these children reside, except that this section does not apply to windows giving access to fire escapes or to a window on the first floor that is a required means of egress from the IMD unit. It is the duty of each landlord to ascertain whether a child 10 years of age or younger resides in the residential units in the IMD building.
(ii) No residential occupant of an IMD unit, or other person may obstruct or interfere with the installation of window guards required by subsection (i) above, nor may any person remove the window guards.
(iii) No landlord may refuse a written request of a residential occupant of an IMD unit, to install window guards regardless of whether it is required by subsection (i), except that this section does not apply to windows giving access to fire escapes or to windows on the first floor that are a required means of egress from an IMD unit.
(iv) The residential occupant of an IMD unit in which window guards are provided and installed must reimburse the landlord as follows: the residential occupant’s share of the entire costs may be determined by adding:
(A) the residential occupant’s pro-rata share of the full cost of window guards in the public areas (obtained by dividing said cost by the total number of residential units in the building); and
(B) the full cost of the window guards (including installation charges) installed within the residential occupant’s unit. The cost may not exceed $16.00 per window guard.
(v) The residential occupants of the remaining units in the building must reimburse the landlord for the remainder of the cost of window guards installed in the public areas, based on their pro-rata shares of the full cost of the window guards in the public areas, as defined in subparagraph (i), above. All reimbursement payments must be payable within days of installation.
(1) Loft Board Staff, ECB and OATH Staff. The Loft Board authorizes the Loft Board’s staff hearing examiners, Administrative Law Judges at the Office of Administrative Trials and Hearing (“OATH”) or the hearing officers at the Environmental Control Board (“ECB”), as the Executive Director so designates, to conduct hearings on alleged violations of housing maintenance standards and, where such violations are determined to exist, to impose the fines in accordance with the ranges recommended in subparagraph (8) below. The Loft Board authorizes its staff to take all steps necessary to enforce the minimum housing maintenance standards.
(2) Inspections and notices of violation. Staff employed or assigned to the Loft Board are authorized to conduct inspections in response to complaints or at the direction of the Loft Board or appropriate staff supervisors to determine whether violations of the Loft Board’s Minimum Housing Maintenance Standards exist. Following an inspection, if a violation is determined to exist, a notice of violation must be issued to the landlord or his agent describing the violation and the unit in which it exists, specifying the applicable section of the Minimum Housing Maintenance rules, and establishing the maximum period of time permissible to cure the violation. A copy of the notice of violation must be left with an authorized person in charge at the premises, if that person is present, the managing agent, if that person is present, or posted in a conspicuous public place at the premises. In addition, a second copy of the notice of violation may be sent by regular mail to the owner or his designated agent, as indicated in the Loft Board’s records. A copy of the notice of violation may also be sent by regular mail to the tenant or tenants who made the original complaint. The cure period for the first notice of violation of its kind within a 12 month period must be a minimum of 7 days from the date of: 1) personal delivery to an authorized person in charge at the premises or the managing agent or 2) posting of the notice in a conspicuous public place at the premises. Except for heat violations, the cure period for a second notice of violation for the same condition within twelve months from the first notice of violation is 24 hours from the date of: 1) delivery of the notice of violation to an authorized person in charge at the premises or the managing agent or 2) posting the notice of violation in a conspicuous public place at the premises. The cure period for a second heat violation occurring during the same Oct-May heat season is 24 hours from the date of: 1) delivery of the notice of violation to an authorized person in charge at the premises or the managing agent or 2) the date of posting the notice of violation in a conspicuous public place at the premises. There is a presumption that the violation continues after the service of the notice of violation. Fines imposed will begin to accrue the day immediately following the cure period and continue daily until the owner demonstrates that the violation is cured.
(3) Re-Inspections and Hearing Notices. A re-inspection may be conducted by or on behalf of the Loft Board’s staff to determine whether the violation has been cured at any time after the cure period specified in the notice of violation has elapsed. If the violation has not been cured, the Executive Director or designated staff member determines whether a hearing should be conducted by the Loft Board, the ECB or OATH. Thereafter, a notice of hearing will be issued. The notice of hearing will contain:
(i) a description of the violation and the unit or the area in the building in which it exists;
(ii) the section of the Minimum Housing Maintenance Standards allegedly violated;
(iii) information as to the maximum fines assessable if the violation is found to exist as alleged in whole or in part;
(iv) the time and place of the hearing;
(v) a notice to respondent that he or she is entitled to be represented by counsel, to present evidence and to examine and cross-examine witnesses; and
(vi) a statement about respondent’s right to file with the Loft Board, OATH or ECB, as applicable, an answer denying or admitting the violation with an explanation, prior to or at the hearing. The notice of hearing must be served by regular first class mail by the Loft Board, OATH or ECB to the owner of the premises, or his or her designated agent, as each is indicated in the Loft Board’s records. A copy of the notice of hearing must also be sent by the Loft Board, OATH or ECB by regular first class mail to the tenant or tenants of any units where violations which are the subject of such hearing are alleged to have occurred. If the notice of hearing is sent by OATH or ECB, a copy of the notice of hearing must also be sent to the offices of the Loft Board.
(4) Hearings. Hearings may be conducted by Loft Board staff hearing examiners, OATH Administrative Law Judges or ECB hearing officers, who will determine whether each violation alleged is sustained by the evidence, whether the landlord-respondent is responsible for providing the particular service in question, and whether the landlord-respondent has made good faith efforts to provide such service. Formal rules of evidence do not apply to such hearings. Where a hearing is conducted by an OATH Administrative Law Judge, the hearing must be conducted in accordance with the procedures governing hearings before the Loft Board. Where a hearing is conducted by an ECB hearing officer, the hearing must be conducted in accordance with the procedures governing hearings before the ECB. When the Loft Board hearing examiner or OATH Administrative Law Judge or ECB hearing officer makes a finding that the violation exists and that the landlord is responsible, he or she must impose a fine within the recommended range in subparagraph (8) below. The fines in subparagraph (8) below include a fine for each violation substantiated and an additional fine for each day the violation exists beginning the day immediately following the cure period until the violation is cured. The Loft Board hearing examiner, OATH Administrative Law Judge or ECB hearing officer is authorized to suspend the fines when a good faith effort to provide services is demonstrated. The landlord has the burden to prove by a preponderance of the evidence the date of cure, if any. If the case is before a Loft Board hearing examiner or OATH Administrative Law Judge, the Loft Board’s staff has the burden of proving the factual allegations contained in the notice of violation by a preponderance of the evidence; however, each notice of violation made pursuant to subparagraph (2) is maintained by the Loft Board as a record kept in the regular course of business and is proof of the facts contained in the notice. If the case is before the ECB, the notice of violation must be sworn to or affirmed pursuant to § 1049-a(d)(1)(b) of New York City Charter. Hearings must electronically recorded and the original recording must be part of the record and the sole official transcript of the proceeding. A written decision sustaining or dismissing each allegation in the notice of hearing must be rendered by the Loft Board hearing examiner, OATH Administrative Law Judge or ECB hearing officer within a reasonable time after the conclusion of the hearing. Each decision, a copy of which must be served on the respondent by regular mail, must contain brief findings of facts, conclusions of law, and where appropriate, an order imposing a fine. If a landlord fails to appear at the hearing after proper notice, the landlord will be declared in default and a decision will be issued by the Loft Board’s hearing examiner, OATH Administrative Law Judge or ECB hearing officer assigned to the case. If the case is before ECB, requests to vacate a default determination must be made in accordance with ECB’s applicable policy and procedure. If the case is before the Loft Board hearing examiner or OATH Administrative Law Judge, requests to vacate a default determination must be made in accordance with the Loft Board’s procedure as set forth in 29 RCNY § 1-06(i).
(5) Appeals of Decisions. An appeal from a determination of a Loft Board hearing examiner or OATH Administrative Law Judge issued pursuant to 29 RCNY § 2-04 must be brought in accordance with the provisions of 29 RCNY § 1-07.1. An appeal from a determination of an ECB hearing officer issued pursuant to 29 RCNY § 2-04 must be brought before the ECB in accordance with its applicable rules and provisions and must be in a form prescribed by the ECB, which may be obtained at www.nyc.gov/ecb.
(6) Willful Violations of the Minimum Housing Maintenance Standards. Where a Loft Board hearing examiner, an OATH Administrative Law Judge or an ECB hearing officer determines that a violation of the Minimum Housing Maintenance Standards is willful, the owner of the building in which the iolation exists will be deemed out of compliance with Article 7-C, for purposes of assertion of the landlord’s rights under Multiple Dwelling Law § 285(1). A second finding of a violation for the same condition within a 6-month period is presumed willful for purposes of this paragraph (6). A finding that a building is not in compliance with Article 7-C because of a willful violation of the Minimum Housing Maintenance Standards may be removed upon the lord’s filing of a request with the Loft Board for a re-inspection to confirm that the violation has been corrected. If the Loft Board’s staff person conducting the inspection determines that the violation or violations have been corrected, and so certifies, a copy of his or her inspection report must be filed with the prior decision and the building will deemed in compliance with Article 7-C for purposes of MDL § 285(1). A finding of a willful violation of Minimum Housing Maintenance Standards will be considered as evidence of harassment of residential occupants by the landlord.
(7) Outstanding, unpaid fines. The registration of a building as an IMD will not renewed for any building for which fines have been imposed, pursuant to 29 RCNY § 2-04 until such fines are paid in full.
(8) Range of fines for violations.
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| 29 RCNY § 2-04(b)(1) | Failure to provide or maintain a safe water supply or plumbing and drainage systems | First finding:$750 - $2,000 per violation for first finding sustaining a violation plus $125 per day |
|---|---|---|
| Second finding within 12 months:$2,000 - $4,000 per violation for second finding within 12 months plus $125 per day | ||
| Subsequent finding within 12 months of the first finding:$4,000 - $6,000 per violation for subsequent finding within 12 months plus $125 per day | ||
| 29 RCNY § 2-04(b)(2) | Failure to provide adequate heat | First finding:$750 - $2,000 per violation for first finding sustaining a violation plus $250 - $500 per day |
| Subsequent finding during the same Oct-May period as the first finding:$3,000 - $4,000 per violation for subsequent finding during same Oct-May period plus $500 - $1,000 per day | ||
| 29 RCNY § 2-04(b)(3) | Failure to supply hot water | First finding:$750 - $2,000 per violation for first finding sustaining a violation plus $250 - $500 per day |
| Subsequent finding within 12 months:$3,000 - $4,000 violation for subsequent finding within 12 months plus $500 - $1,000 per day | ||
| 29 RCNY § 2-04(b)(4) | Failure to maintain electrical service to residential units | First finding:$750 - $1,000 per violation for first finding sustaining a violation plus $125 per day |
| Second finding within 12 months:$2,000 - $4,000 per violation for the second finding within 12 months plus $125 per day | ||
| Subsequent finding within 12 months of the first finding:$4,000 - $6,000 per violation for any subsequent finding within 12 months plus $125 per day | ||
| 29 RCNY § 2-04(b)(5) | Failure to maintain gas service in good working order | First finding:$750 - $1,000 per violation for the first finding sustaining a violation plus $125 per day |
| Second finding within 12 months:$2,000 - $4,000 per violation for the second finding within 12 months plus $125 per day | ||
| Subsequent finding within 12 months of the first finding:$4,000 - $6,000 per violation for any subsequent finding within 12 months plus $125 per day | ||
| 29 RCNY § 2-04(b)(6) | Failure to provide smoke detectors/ Failure to provide carbon monoxide detectors | First finding:$750 - $1,000 per violation for the first finding sustaining a violation plus $10 per day |
| Second finding within 12 months:$2,000 per ation for the second finding within 12 months plus $10 per day | ||
| Subsequent finding within 12 months of the first finding:$3,000 per violation for any subsequent finding within 12 months plus $10 per day | ||
| 29 RCNY § 2-04(b)(7) | Failure to provide lighting in public areas of the building | First finding:$750 - $1,000 per violation for the first finding sustaining a violation plus $10 per day |
| Second finding within 12 months:$2,000 per ation for the second finding within 12 months plus $10 per day | ||
| Subsequent finding within 12 months of the first finding:$3,000 per violation for any subsequent finding within 12 months plus $10 per day | ||
| 29 RCNY § 2-04(b)(8) | Improper maintenance of entrance door security; failure to provide keys | First finding:$750 - $1,000 per violation for the first finding plus $125 per day |
| Second finding within 12 months:$2,000 - $4,000 per violation for the second finding within 12 months plus $125 per day | ||
| Subsequent finding within 12 months of the first finding:$4,000 - $6,000 per violation for any subsequent findings within 12 months plus $125 per day | ||
| 29 RCNY § 2-04(b)(9) | Failure to provide or improper maintenance of elevator service | First finding:$750 - $1,000 per violation for the first finding sustaining a violation plus $125 per day |
| Second finding within 12 months: $2,000 per lation for the second finding within 12 months plus $125 per day | ||
| Subsequent finding within 12 months of the first finding:$3,000 per violation for any subsequent finding within 12 months plus $125 per day | ||
| 29 RCNY § 2-04(b)(10) | Failure to provide window guards | First finding:$750 - $1,000 per violation for the first finding plus $125 per day |
| Second finding within 12 months:$2,000 - $4,000 per violation for the second finding plus $125 per day | ||
| Subsequent findings within 12 months of the first finding:$4,000 - $6,000 per violation for any subsequent finding plus $125 per day | ||
| 29 RCNY § 2-04(c) | Failure to provide other minimum housing maintenance services | First finding:$750 - $1,000 per violation for the first finding plus $125 per day |
| Second finding within 12 months:$2,000 per violation for the second finding within 12 months plus $125 per day | ||
| Subsequent findings within 12 months of the first finding:$3,000 per violation for any subsequent finding within 12 months plus $125 per day |
~
§ 2-05 Registration.
(a) Definitions.
Landlord. As used in these rules, the term “landlord” shall mean the owner of an interim multiple dwelling (“IMD”), the lessee of a whole building, part of which contains IMD units, or the agent, executor, assignee of rents, receiver, trustee, or other person having direct or indirect control of such a dwelling.
Residential Occupant. As used in these rules, the term “residential occupant” shall mean an occupant of an IMD unit eligible for protection under Article 7-C of the New York State Multiple Dwelling Law (“MDL.”)
Agent. As used in § 284(2) of the MDL and these rules, the term “agent” or “managing agent” shall mean the person in control of and responsible for the maintenance and operation of the IMD building, which person shall be an individual, 21 years of age or older, and shall reside within New York City or customarily and regularly attend a business office located in New York City.
(1) Print all information in completing the registration application form and return it and the required documents listed in 29 RCNY § 2-05(b)(8) to: “IMD REGISTRATION” at the Loft Board’s office, together with a check covering the registration and code-compliance monitoring fees, in accordance with subparagraph (3) below. The landlord must serve a copy of the initial registration application form on all occupants of the building including residential, commercial and manufacturing occupants and prime lessees, if different. Service shall be made by regular mail delivered to each occupant at the occupant’s unit, or at a different address in accordance with the terms for delivery of the notice in the occupant’s lease. The registration application form must specify which residential units are being registered as IMD units and include the unit designations and location in the building. Certification of such service to the occupants and prime lessees shall be attached to the registration application form filed with the Loft Board.
(2) The information requested on the registration application form is required pursuant to MDL §§ 284(2) and 325, and these rules. Additional information may be required pursuant to rules promulgated by the Loft Board.
(3) Pursuant to MDL § 282, the Loft Board may charge and collect reasonable fees. Registration and code compliance monitoring fees shall be payable to the Loft Board in accordance with 29 RCNY § 2-11.
(4) Completion and submission of a registration application form does not constitute a waiver of the applicant’s right to contest before the Loft Board the coverage of the premises described therein as an IMD building under Article 7-C of the MDL, nor shall the act of filing the registration application form constitute evidence before the Loft Board that the building described therein is an IMD building. Notwithstanding the foregoing, the failure of an owner, a building occupant or prime lessee to contest the registration application within 45 calendar days after service of the registration application or 45 calendar days after the filing date with the Loft Board, whichever is later, shall constitute a “waiver” to contest coverage of the units registered, and shall preclude the landlord from contesting such coverage status. In the event the Loft Board or its staff subsequently discovers that a building, structure or portion thereof registered as an IMD does not qualify as an IMD subject to coverage under Article 7-C, in whole or in part, then the Executive Director may revoke such IMD status for the individual unit, or the building in its entirety, as applicable, effective upon notice to the owner, the building occupants and the prime lessees, listed on the registration application form. Any and all applications by a landlord, building occupant or the prime lessee to challenge the denial of a registration application form or the revocation of IMD status of a building or a unit by the Executive Director shall be governed by the terms and provisions of 29 RCNY § 1-07.1.
(5) Procedure to Contest a Registration Application. Any and all applications filed by a landlord, building occupant(s) or prime lessee, if applicable, to contest coverage of a building or individual unit under Article 7-C must be received by the Loft Board within 45 calendar days after service of the registration application form on the building occupants and prime lessee(s) or within 45 calendar days after filing of the registration application form with the Loft Board, whichever is later. Such applications must set forth the extent of coverage being contested, including the facts and rationale upon which coverage is being contested. A copy of the application must be served on ALL residential, commercial and manufacturing occupants of the building and the prime lessee(s) in the manner described in 29 RCNY § 1-06(b) for service of Loft Board applications, and the application filed with the Loft Board must include a certification that such service has been made.
(6) Any occupant in the building may apply for coverage under Article 7-C. Such applications shall be filed in accordance with the procedures set forth in 29 RCNY § 1-06, and shall be subject to the terms and provisions of the MDL and these rules, including, without limitation, the deadline for filing coverage applications set forth in MDL § 282-a, 29 RCNY § 1-06.1, and the Loft Board’s website.
(7) An interim multiple dwelling registration number issued by the Loft Board will be effective until such time as determined by the Loft Board or its staff.
(8) Required Documents For A Registration Application. A registration must be completed in its entirety. Legible copies of the following must be attached: (i) the current lease for each residential unit claimed to be covered under Article 7-C, or, where there is no current lease, the most recent lease agreement, including all executed riders, amendments, modifications and extensions, (ii) the lease in effect during the qualifying window period set forth in MDL § 281 for each residential unit claimed to be covered under Article 7-C, and if no lease existed during the window period, an owner must file proof of residential occupancy during the window period with the registration form; (iii) the lease in effect on June 21, 2010, if different, and if no lease existed on June 21, 2010, the owner must attach a signed statement outlining the rental agreement in effect on June 21, 2010 - including party names, monthly rent, a description of the premises, use of the premises, and the services provided by the landlord; and (iv) any lease for a unit engaged in commercial, manufacturing, or industrial activity in the building on June 21, 2010. If no lease existed for the commercial, manufacturing, or industrial unit on June 21, 2010, the owner must attach a signed statement outlining the rental agreement in effect on June 21, 2010. For cooperatives, legible copies of the proprietary leases for all units, including the units engaged in commercial, manufacturing, or industrial activity, must be attached. If any units were rented on June 21, 1982 for units seeking coverage pursuant to MDL § 281(1), or July 27, 1987 for units seeking coverage pursuant to MDL § 281(4), or June 21, 2010, for units seeking coverage pursuant to MDL § 281(5), copies of those leases and subleases or rental agreements must be attached. For condominiums, legible copies of all leases for units that were rented on June 21, 1982 for units seeking coverage pursuant to MDL § 281(1), or July 27, 1987 for units seeking coverage pursuant to MDL § 281(4) or June 21, 2010, for units seeking coverage pursuant to MDL § 281(5), must be attached. A registration application form will not be accepted, and an IMD Registration Number will not be issued, unless all questions set forth on the registration application form are answered in full, and all required leases or signed statements are attached. If a particular question or piece of information is inapplicable, the applicant shall enter “Not Applicable,” or if the information is unavailable, enter “Not Available”, and attach a signed statement explaining the reasons such information is inapplicable or unavailable. The content of a registration application form will be reviewed prior to issuance of an IMD Registration Number. In the space provided on the registration application form, an applicant must specify which units it seeks to register with the Loft Board for coverage under Article 7-C. The applicant shall enter the number of residential units occupied for residential purposes by families living independently from one another, the periods of such residential occupancy, and indicate the units’ location in the building. “Family” shall have the meaning provided in MDL § 4(5), and may consist of a person or persons, regardless of whether they are related by marriage or ancestry.
(9) The acceptance of the registration application form in no way legalizes the residential occupancy. If the registration application form is accepted by the Loft Board staff, a copy of the form with the assigned IMD Registration Number will be returned to the applicant. That number must be included on all future correspondence with the Loft Board regarding the building. The Loft Board reserves the right to reject, revoke or amend an IMD Registration Number for a building. The Loft Board also reserves the right to revoke, at any time, the Article 7-C coverage for a unit in a building issued an IMD Registration Number.
(10) For each building potentially subject to Article 7-C, the owner, the lessee of the whole building, if applicable, and the agent must each sign the registration application form thereby certifying to the truth, accuracy and completeness of the information contained therein. If the building is known by more than one address, the applicant shall list each address on the application form.
If the owner, lessee of the whole building or agent is a corporation, other than a corporation listed as exempt from the provisions of MDL § 325, the names, business, and residence addresses and phone numbers of each of its officers must be listed on the form.
Other officers, including treasurer or chief fiscal officer, and stockholders who own or control at least 10 percent of the corporation’s stock, must be listed on a separate attachment.
If the owner, lessee of the whole building or agent is other than an individual or a corporation, the names, business and residential addresses and phone numbers for each member, general partner or participant in a partnership, joint venture or limited liability company must be listed on a separate attachment
At least one of the phone numbers filed with the registration application form must be a confidential telephone number where a responsible party can reasonably be expected to be reached 24 hours a day, 7 days a week for emergencies. Such number(s) must be within 50 miles radius of New York City limits, and must be indicated on a separate signed sheet of paper filed with the registration application form. Such responsible party shall be twenty-one years or older, and shall reside within New York City or customarily and regularly attend a business office located in New York City. The emergency number shall be confidential. Any change in the emergency number, managing agent information, owner’s address or ownership shall be sent to the Loft Board within 5 days of the change. The failure to report such change is a violation of the Loft Board rules and the owner may be subject to civil penalties in accordance with 29 RCNY § 2-11.1.
(11) All landlords who file a registration application form agree to provide the minimum housing maintenance standards established by 29 RCNY § 2-04, as it may be amended from time to time, to all residentially occupied units covered under Article 7-C of the MDL.
(12) [Reserved.]
(13) A notice, in the form prescribed by the Loft Board, as designated on the Loft Board’s website, shall be posted in the lobby of every IMD building within five (5) business days after the issuance of the IMD Registration Number. Failure to post such notice or update the notice within 5 calendar days of a change in the information contained in such notice may subject the landlord to civil penalties in accordance with 29 RCNY § 2-11.1. Such notice must contain:
(A) The building’s address;
(B) The IMD Registration Number assigned by the Loft Board for the purpose of identifying the building;
(C) The contact information for the owner and managing agent; and
(D) The Loft Board’s phone number.
(14) If additional space is required to respond to any of the questions set forth on the registration application form, the applicant shall attach a signed separate sheet of paper to complete the response.
(1) The provisions of these rules, 29 RCNY § 2-05, shall be fully applicable to IMD buildings or additional covered units, which are subject to coverage under Article 7-C pursuant to MDL § 281(4), except as provided below:
(i) Pursuant to MDL § 284(2), all residential units that qualify for coverage under Article 7-C pursuant to MDL §§ 281(4) were required to be initially registered on or before September 25, 1987. The initial registration period for such qualifying units under § 281(4) ended on June 30, 1988.
(1) Pursuant to MDL § 284(2), the initial registration for buildings covered pursuant to MDL § 281(5) shall have been filed by August 21, 2010, which was sixty days from the effective date of Chapter 135 of the Laws of 2010. The provisions of these rules, 29 RCNY § 2-05, shall be fully applicable to IMD buildings or additional covered units, which are subject to coverage under Article 7-C pursuant to MDL § 281(5). Pursuant to MDL § 282-a, the initial registration application form must be filed for all buildings, structures, or portions thereof seeking Article 7-C coverage by the certain date listed in 29 RCNY § 1-06.1(a), and on the Loft Board’s website. This date is 6 months after the date the Loft Board adopted all rules necessary to implement the provisions of Chapters 135 and 147 of the Laws of 2010, which added MDL § 281(5). Any initial registration application forms filed after the certain date listed in 29 RCNY § 1-06.1(a) will not be accepted, notwithstanding that such residential units may otherwise meet the qualifying criteria for an IMD unit pursuant to MDL § 281, unless the landlord is directed to file a registration form pursuant to a Loft Board order finding coverage or if the landlord is directed to file a registration application form by a court of competent jurisdiction pursuant to the claim of Article 7-C coverage raised in a pleading before the certain date listed in 29 RCNY § 1-06.1(a), and on the Loft Board’s website.
(2) Registration Renewals. Renewal of registration pursuant to 29 RCNY § 2-11(b)(1)(i)(A) shall be required annually on or before July 1st. Prior to the processing of the registration renewal application, the landlord or the agent is required to pay all unpaid fines, late fees and registration and code compliance monitoring fees for prior registration periods at the rate set forth in 29 RCNY § 2-11(b)(9)(i), as may be amended from time to time. Failure to timely pay such registration and code compliance monitoring fees may result in the imposition of late fees, and other civil penalties, in accordance with the terms and provisions of these rules, including, without limitation, 29 RCNY § 2-11(b)(1)(i)(D) and 29 RCNY § 2-11.1.
§ 2-06 Interim Rent Guidelines.
(For time limitations on filing applications for rent overcharges, see 29 RCNY § 1-06.1).
(1) These rent guidelines apply to units of interim multiple dwellings (“IMDs”), as defined in § 281 of Article 7-C, with residential occupants qualified for protection pursuant to the article, who
(i) do not have a lease or rental agreement in effect on the date of this order, December 21, 1982 or
(ii) whose leases or rental agreements are in effect on December 21, 1982, but expire prior to the IMD’s compliance with the safety and fire protection standards of Article 7-B of the Multiple Dwelling Law. These guidelines apply only to IMD’s which have registered with the Loft Board.
(2) “Lease or rental agreement in effect” shall mean
(i) a written lease or rental agreement;
(ii) an oral agreement for a rental period of one year or less, provided that
(A) there has been a change from the previous rent, confirmed by rent checks tendered by the residential occupant and accepted by the landlord within the year prior to this order or
(B) there has been a substantial change in the level of services agreed to be provided within one year prior to this order.
(1) For units where the last increase in total rent or a utility escalator pursuant to a lease or rental agreement tendered by the tenant and accepted by the landlord was:
(i) Subsequent to December 31, 1979: the maximum permissible increase shall be 7 percent of the total rent as defined above.
(ii) Between January 1, 1977 and December 31, 1979: the maximum permissible increase shall be 22 percent of the total rent defined above.
(iii) Before January 1, 1977: the maximum permissible increase shall be 33 percent of the total rent as defined above.
(2) For units which have had no rent increases since the inception of the lease or rental agreement between the residential occupant and landlord, the maximum percentage increases contained in category (i), (ii), and (iii) above shall be based upon the date of inception of the lease or rental agreement.
(3) For units where the current or most recent lease or rental agreement does not contain any escalator provisions and where the last rent increase was not an escalator adjustment, a surcharge of 2 percent for category (i), 4 percent for category (ii), and 6 percent for category (iii) may be added to the percentage increases. These rent increases shall be a permanent part of the rent.
§ 2-06.1 Interim Rent Guidelines (II).
(a) Coverage.
(1) These rent guidelines apply to interim multiple dwelling (“IMD”) units, as defined in § 281 of Article 7-C of the Multiple Dwelling Law, which:
(i) are subject to Article 7-C solely pursuant to MDL § 281(4); and
(ii) are registered with the Loft Board; and
(iii) have a residential occupant qualified for protection pursuant to Article 7-C of the Multiple Dwelling Law, who
(A) did not have a lease or rental agreement in effect on July 27, 1987; or
(B) had a lease or rental agreement in effect on July 27, 1987, which expired prior to October 29, 1992 and prior to the IMD unit’s compliance with the safety and fire protection standards of Article 7-B of the Multiple Dwelling Law; or
(C) had a lease or rental agreement in effect on July 27, 1987, which is still in effect on October 29, 1992, but which expires prior to the IMD unit’s compliance with the safety and fire protection standards of Article 7-B of the Multiple Dwelling Law.
(2) “Lease or rental agreement” shall mean
(i) a written lease or rental agreement; or
(ii) an oral agreement for a rental period of one year or less, provided that
(A) there had been a change from the previous rent, confirmed by rent checks tendered by the residential occupant and accepted by the landlord within the year prior to July 27, 1987, or
(B) there had been a substantial change in the level of services agreed to be provided within the year prior to July 27, 1987.
(1) For units where the last increase in total rent or a utility escalator pursuant to a lease or rental agreement tendered by the tenant and accepted by the landlord was:
(i) Subsequent to October 29, 1990: there will be no increase permitted above the total rent as defined above.
(ii) Between October 29, 1988 and October 29, 1990: the maximum permissible increase shall be 7 percent of the total rent as defined above.
(iii) Between October 29, 1986 and October 28, 1988: the maximum permissible increase shall be 16 percent of the total rent defined above.
(iv) Between October 29, 1984 and October 28, 1986: the maximum permissible increase shall be 24 percent of the total rent defined above.
(v) Before October 29, 1984: the maximum permissible increase shall be 33 percent of the total rent as defined above.
(2) For units which have had no rent increases since the inception of the last lease or rental agreement between the residential occupant and landlord, the maximum percentage increases contained in category (ii), (iii), (iv), and (v) above shall be based upon the date of inception of the last lease or rental agreement. These rent increases shall be a permanent part of the rent.
§ 2-06.2 Interim Rent Guidelines and Rent Adjustments pursuant to MDL § 286(2)(i).
(a) Coverage.
(1) These rent guidelines apply to interim multiple dwelling (“IMD”) units, as defined in § 281 of Article 7-C of the Multiple Dwelling Law (“MDL”), which (i) are subject to Article 7-C solely pursuant to MDL § 281(5); (ii) are registered with the Loft Board; and (iii) do not meet the safety and fire protection standards of Article 7-B of the MDL.
(1) “Lease or rental agreement” means:
(i) a written lease or rental agreement; or
(ii) an oral agreement for a rental period of one year or less, provided that:
(A) There was a change in the rent for the IMD unit, confirmed by rent checks tendered by the residential occupant and accepted by the landlord within the year prior to June 21, 2010; or
(B) There had been a substantial change in the level of services agreed to be provided within the year prior to June 21, 2010.
(2) “Escalators” are additional charges agreed upon by the occupant and landlord to be paid by the occupant provided in a lease or rental agreement, including but not limited to charges based on: real estate taxes; heating fuel; labor; water and sewer; insurance; vault tax; or any cost-of-living increase formulas.
(3) (i) “Use-Based Escalators” are escalators that: 1) are based on a verifiable calculation of the occupant’s usage and the cost to the owner; and 2) were part of the last lease or rental agreement in effect on or before June 21, 2010. Use-based escalators may include charges related to gas, electricity and steam.
(ii) Garbage Escalators are escalators related to garbage collection services that were part of the last lease or rental agreement in effect on or before June 21, 2010. Garbage escalators will not include charges for services provided by the New York City Department of Sanitation or a succeeding government agency at no cost to the owner.
(4) “Total rent”
(i) Lease in effect on June 21, 2010. Except as provided in (iii), total rent is the rent, including escalators, specified in the lease or rental agreement in effect on June 21, 2010, paid by the tenant pursuant to said lease or rental agreement.
(ii) No lease in effect on June 21, 2010. Except as provided in (iii), where no lease or rental agreement was in effect on June 21, 2010, the total rent is the rent, including escalators, paid by the tenant to the landlord on or before June 21, 2010 pursuant to the last lease or rental agreement prior to June 21, 2010.
(iii) Total rent shall not include use-based escalators or garbage escalators.
(1) Total rent, as defined above; plus
(2) Any other rent adjustments authorized pursuant to Article 7-C and these Rules, including allowable rent adjustments authorized pursuant to 29 RCNY § 2-12; plus
(3) Use-based escalators, if any; plus
(4) Garbage escalators, if any.
§ 2-07 Sales of Improvements.
(a) Definitions. The following terms shall have the following definitions unless context clearly indicates otherwise.
(1) Fair market value. “Fair market value” is defined as follows:
(i) A bona fide offer by a prospective incoming tenant to purchase improvements made or purchased by an outgoing tenant qualified for protection under Article 7-C is presumed to represent the fair market value of the improvements.
(ii) The presumption in (i) above may be rebutted if the owner challenges the value in accordance with 29 RCNY § 2-07(g), in which case the fair market value will be determined by the Loft Board in accordance with 29 RCNY § 2-07(g).
(iii) If no such offer is made or available, the value shall be established by agreement of the parties or pursuant to an application to the Loft Board, which shall determine the value in accordance with the criteria and procedures set forth in this Rule.
(2) Improvements. “Improvements” are the fixtures, alterations and development of an interim multiple dwelling (“IMD”) unit which were made or purchased by a residential tenant who is qualified for protection under Article 7-C.
(i) “Fixtures” are defined as that which is fixed or attached to real property permanently as an appendage, including, but not limited to, the following: kitchen installations, such as stoves, sinks, counters, and built-in cabinets; bathroom installations, such as sinks, toilets, bathtubs, and showers; other installations, such as partitions, ceilings, windows, and floors, including tiling; built-in shelves; plumbing and utility risers; electrical work; heating units; and hot water heaters.
(ii) “Alterations and development” include, but are not limited to the following: demolition work, such as debris removal; repair, other than normal recurring maintenance; renovation of ceiling, walls, windows, and floors; design, including professional fees paid to architects and designers in connection with the improvements; labor; equipment rental; and such removable personal property as is reasonable to establish residential use, such as a refrigerator and dishwasher.
Improvements do not include other removable household furnishings, such as rugs, tables, and chairs. A sale of improvements does not constitute a sale of rights pursuant to § 286(12) of the Multiple Dwelling Law (“MDL”).
(3) Unit, as referred to in this Rule, means:
(i) A residential unit in an IMD building, as defined by MDL § 281 and these Rules, which is registered with the Loft Board or granted coverage by the Loft Board or a court of competent jurisdiction; or
(ii) For the purposes of sales of improvements governed by this section only, a unit formerly registered as an IMD unit, but which has subsequently been legalized and removed from the Loft Board’s jurisdiction.
(1) Right to sell. The residential occupant of an IMD unit which is qualified for protection under Article 7-C may sell the improvements of the unit to the owner or to a prospective tenant, either before or after such unit has been legalized and registered with DHCR, subject to the procedures established in these Rules. This right to sell may be exercised only once for each IMD unit. The improvements must be offered to the owner for an amount equal to their fair market value, as defined in 29 RCNY § 2-07(a) above, prior to their sale to a prospective incoming tenant.
(2) Sales not subject, or partially subject, to these rules.
(i) Registration or a finding of coverage. This section does not apply to units which have never been registered with the Loft Board, unless the unit was granted coverage pursuant to a Loft Board order or court of competent jurisdiction. Any sale of improvements which occurred prior to registration of the unit with the Loft Board or prior to a finding of coverage by the Loft Board or a court of competent jurisdiction does not constitute a sale pursuant to MDL § 286(6), and is not covered by this section. This section does not apply to units which the Loft Board or the Executive Director have found are not covered by Article 7-C pursuant to 29 RCNY §§ 2-05 and 2-08, or which a court of competent jurisdiction has found do not qualify for Article 7-C coverage.
(ii) Sales between co-tenants. This section does not apply to sales of improvements between co-tenants of an IMD unit, where at least 1 of the co-tenants will remain in occupancy after the sale and is an occupant qualified for the protection of Article 7-C.
(iii) Compensation to prime lessee or sublessor. Compensation to a prime lessee or sublessor by a residential occupant does not constitute a sale of improvements pursuant to MDL § 286(6), and is governed by 29 RCNY § 2-09(c) in matters regarding the prime lessee’s or sublessor’s right to compensation for costs incurred in developing a residential unit. After compensation has been made by the residential occupant to the prime lessee or sublessor, the residential occupant has the right to sell the improvements in the unit pursuant to MDL § 286(6) and this section.
(1) An outgoing tenant in an IMD unit proposing to sell improvements to a prospective incoming tenant must send the Loft Board approved Disclosure Form to the owner and prospective incoming tenant in accordance with the following procedures at least 30 calendar days in advance of the date of closing of the proposed sale.
(i) The outgoing tenant must notify the owner of his or her intent to move and to sell the improvements, and the identity of the prospective incoming tenant, providing the following information to the owner:
(a) A list and description of the improvements included in the proposed sale which were made or purchased by the outgoing tenant with accompanying proof of payment;
(b) A written copy of the offer, verified by the prospective incoming tenant, to purchase the improvements, which includes all terms and conditions of the offer;
(c) Identification of the prospective incoming tenant by name, current business and home addresses and any other address and telephone numbers elected for purposes of delivery of notices and communications;
(d) An affidavit by the outgoing tenant that he or she made or purchased the improvements offered for sale; or an affidavit that he or she is authorized to sell the improvements on behalf of any other parties having ownership interest in such improvements, accompanied by appropriate evidence of such authorization;
(e) An affidavit by the prospective incoming tenant that he or she has received and reviewed the Disclosure Form; and
(f) Three reasonable dates and times within 10 calendar days after service of the Disclosure Form upon the owner, when the owner and/or the owner’s designee could inspect the improvements.
(ii) The Disclosure Form must also include the following advisories to the prospective incoming tenant:
(a) The improvements included in the sale are limited to those items listed and described by the outgoing tenant;
(b) The prospective incoming tenant is purchasing absolute title to the use and enjoyment for the duration of the prospective tenancy of all other property deemed improvements pursuant to these rules. The owner is responsible for maintenance of improvements deemed fixtures pursuant to these rules; however, the owner has the right to alter or remove the improvements pursuant to code compliance requirements, subject to the terms of this section;
(c) The right to sell improvements may be exercised only once for the unit and an incoming tenant cannot re-sell such improvements to the owner or a prospective incoming tenant pursuant to MDL § 286(6);
(d) Upon completion of the sale of improvements by the prospective incoming tenant pursuant to MDL § 286(6), the prospective incoming tenant assumes the rights and obligations of the outgoing tenant as an occupant qualified for protection under Article 7-C;
(e) The amount of the rent and a statement as to the types of further increases which may be applicable to the IMD unit pursuant to the terms of the Loft Board’s rules or Rent Guidelines Board’s orders;
(f) If the building has not been issued a final residential certificate of occupancy for the IMD unit at the time of the offer to purchase, the unit remains subject to the requirements of Article 7-C and the Loft Board’s rules requiring that such units be brought into compliance;
(g) MDL § 286(5) provides that the costs of legalization as determined by the Loft Board are passed through to the tenants and may result in rent adjustments owed by the tenant above the base rent, amortized over a 10 or 15 year period;
(h) The offer is subject to the owner’s right:
1. To purchase the improvements for an amount equal to their fair market value;
2. To challenge the offer as provided in 29 RCNY § 2-07(g) below; and
3. To withhold consent to the prospective tenant, provided that consent may not be unreasonably withheld;
(i) If an owner purchases the improvements, the owner will not be entitled to the opportunity for decontrol of rent regulation or market rentals, as provided in 29 RCNY § 2-07(d)(4)(ii) below, if the owner is found to have harassed tenants, pursuant to 29 RCNY § 2-02, unless the harassment finding has been terminated pursuant to 29 RCNY § 2-02.
(2) The completed Disclosure Form with original signatures must be filed with the Loft Board, together with proof of service. Following receipt, the Loft Board staff will determine whether a sale for the unit in question has been previously filed with the Loft Board’s office. If a sale was previously filed, the parties will be notified of the prior sale and the proposed sale will not be given any effect under MDL § 286(6).
(1) Procedures for owner’s response.
(i) Within 10 calendar days of service of the Disclosure Form, the owner may request any reasonable additional information from the outgoing and prospective incoming tenants that will enable the owner to decide whether to purchase the improvements, and to determine the suitability of the prospective incoming tenant.
(A) No request by the owner for additional information from the outgoing tenant may be unduly burdensome, and requests for additional information must be relevant to the criteria set forth in 29 RCNY § 2-07(g) below.
(B) If the Loft Board finds that the owner’s request for additional information is unduly burdensome, it may reject the owner’s request on application by the outgoing tenant.
(ii) In the owner’s response to the Disclosure Form, the owner must affirm that the subject unit is currently registered with the Loft Board or DHCR, or any successor agency and was registered at the time of service of the Disclosure Form and that he or she either owns the premises or is authorized to act on behalf of the owner in this matter.
(iii) Within 20 calendar days after service of the Disclosure Form, or delivery of the additional information reasonably requested by the owner, whichever is later, the owner must notify the outgoing and prospective incoming tenants of the owner’s:
(A) Rejection of the offer based on one or more of the grounds for challenge listed in 29 RCNY § 2-07(g)(2), by following the procedures provided in 29 RCNY § 2-07(g);
(B) Consent to the prospective incoming tenant and consent to the sale of improvements to the prospective incoming tenant; or
(C) Acceptance and commitment to purchase the improvements at the offered price.
(iv) If the owner’s challenge is based on the unsuitability of the prospective tenant, the owner may only initiate an action based on that ground in a court of competent jurisdiction. If an action is brought pursuant to this subparagraph, the owner must inform the Loft Board in writing within 20 calendar days after service of the Disclosure Form or delivery of the additional information requested, if any.
(2) Owner’s rejection of the offer.
(i) If the owner rejects the outgoing tenant’s offer to purchase the improvements, the owner must elaborate on the grounds for the rejection by filing a challenge application in accordance with the procedures provided in subdivision (g), except as provided in 29 RCNY § 2-07(d)(1)(iv). If the rejection is based on the claim that the offer exceeds the fair market value of the improvements, the rejection must include the owner’s fair market valuation of the improvements and the owner’s commitment to purchase if the fair market value is determined to be no greater than such valuation. If the rejection is based on the claim that the owner made or purchased the improvements, the rejection must indicate which improvements the owner alleges to have made or purchased and include proof.
(ii) Failure of the owner to file with the Loft Board a complete application, including payment of a fee of $800.00 to cover the full cost of an appraiser selected by the Board, with copies to the outgoing and prospective tenants, within the time provided in 29 RCNY § 2-07(d)(1)(iii) above, shall be deemed an acceptance of the proposed sale. However, if the owner’s challenge is on the ground of the unsuitability of the prospective tenant, the owner may only initiate an action based on that ground in a court of competent jurisdiction and must inform the Loft Board in writing within the time period in 29 RCNY § 2-07(d)(1)(iv).
(3) Owner’s acceptance of sale and prospective tenant.
(i) The owner may send a notice of approval of the proposed sale to the prospective incoming tenant, and acceptance of the prospective incoming tenant.
(ii) An owner’s failure to: 1) send a complete notice of approval, as described in (i) above or 2) file a challenge application with the Loft Board within the time period provided in 29 RCNY § 2-07(d)(1)(iii) above, or by another deadline agreed upon in writing by the owner and outgoing tenant, is deemed an acceptance of the proposed sale from the outgoing tenant to the incoming tenant and acceptance of the prospective incoming tenant, except as provided in 29 RCNY § 2-07(d)(1)(iv).
(iii) In the case of (i) or (ii) above, the tenant assumes the rights and obligations of the outgoing tenant as an occupant qualified for protection under Article 7-C, upon the execution of the sale provisions and compliance with the other provisions of these Rules. The prospective incoming tenant is permitted to commence residency, despite the lack of a residential certificate of occupancy covering the unit. He or she must pay the rent previously charged to the outgoing tenant, including any applicable pass-throughs or increases permissible under Article 7-C or the Loft Board’s rules and orders, including but not limited to:
(A) Any increases permissible pursuant to 29 RCNY §§ 2-06, 2-06.1, or 2-06.2, if such increases have not already been imposed; or
(B) Any increases pursuant to the Rent Guidelines Board’s orders, if applicable.
(4) Owner’s purchase of improvements.
(i) If the owner elects to purchase the improvements in an IMD unit in accordance with the terms of the prospective incoming tenant’s offer, the owner must notify the outgoing tenant and the prospective incoming tenant of the owner’s acceptance in accordance with 29 RCNY § 2-07(d)(1)(iii), and must meet the terms of the offer within 30 calendar days of service of owner’s acceptance upon the outgoing tenant. If the owner fails to meet the terms of the offer within the 30 calendar day period, the owner is deemed to have waived the right to purchase the improvements at an amount equal to their fair market value.
(ii) Upon completion of the purchase of improvements by the owner, an IMD unit subject to rent regulation solely by reason of Article 7-C of the MDL, and not receiving any benefits of real estate tax exemption or tax abatement, will be exempted from the provisions of Article 7-C requiring rent regulation,
(A) if such building had fewer than 6 residential units: (a) on June 21, 1982 for a unit covered under MDL § 281(1); (b) on July 27, 1987 for a unit solely covered under MDL § 281(4); or (c) on June 21, 2010 for a unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapters 135 or 147 of the Laws of 2010; or
(B) if the unit was purchased by the owner pursuant to these rules before July 27, 1987 and the building had fewer than 6 residential units on June 21, 1982, but 6 or more residential units on July 27, 1987.
(iii) Upon completion of the purchase by the owner, any unit subject to rent regulation solely by reason of Article 7-C of the MDL, and not receiving any benefits of real estate tax exemption or tax abatement, will be subject to subsequent rent regulation after being rented at market value, if such building had 6 or more residential units on: (a) June 21, 1982 for a unit covered under MDL § 281(1); (b) July 27, 1987 for a unit solely covered under MDL § 281(4); or (c) June 21, 2010 for a unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapters 135 or 147 of the Laws of 2010.
(iv) The exemption from rent regulation is not available in a building when any sale of improvements takes place on or after the date of a finding of harassment, and before the harassment order is terminated by the Loft Board in accordance with 29 RCNY § 2-02(d)(2).
(1) All notices, requests, responses and stipulations served by owners and tenants pursuant to this section must be in writing, with a copy delivered or mailed to the Loft Board, accompanied by proof of service. Service by the parties will be effected either (1) by personal delivery or (2) by certified or registered mail, return receipt requested, with an additional copy sent by regular mail.
(2) Unless otherwise agreed in writing by the parties, with notice to the Loft Board, these communications must be sent to the outgoing tenant and to the prospective incoming tenant at the respective addresses specified on the Disclosure Form; and to the owner at the address indicated on the latest IMD registration form filed with the Loft Board immediately prior to the filing of the Disclosure Form.
(3) If service was made personally, a verified statement of the person who effected service, setting forth the time, place and other details of service will constitute proof of service. If service was performed by mail, copies of the United States Post Office stamped return receipt and verified statement of mailing will constitute proof of service.
(4) The deadlines provided in this section are triggered by the effective date of service. Service is deemed effective upon personal delivery or 5 calendar days following service by mail.
(5) Communications by the Loft Board pursuant to this section will be sent by regular mail to the addresses indicated in paragraph (2) above.
(1) Procedures.
(i) An owner of an IMD unit seeking to contest the proposed sale of improvements must apply to the Loft Board for a determination within 20 calendar days of service upon the owner of the Disclosure Form, or within such additional period as provided pursuant to 29 RCNY § 2-07(d) above, and must pay the mandated filing fee of $800. Before the owner files a challenge application under this subdivision, the owner’s registration with the Loft Board, including payment of applicable registration fees, must be current, or before filing a challenge application with respect to improvements in a unit that was formerly subject to Article 7-C, the owner’s registration with DHCR or any successor agency must be current. The owner must also state that he or she is the owner of the premises or is authorized to act on behalf of the owner in this matter.
(ii) Filing of an application challenging the sale of improvements to a prospective incoming tenant which is found by the Loft Board to be frivolous may constitute harassment, pursuant to 29 RCNY § 2-02, with the consequences provided in 29 RCNY § 2-07(d)(4). An objection to the sale may be found to be frivolous on grounds including, but not limited to, the following: that it was filed without a good faith intention to purchase the improvements at fair market value or that the owner’s valuation of the improvements has no reasonable relationship to the fair market value, as determined by the Loft Board.
(iii) The owner must serve the outgoing and prospective incoming tenants with a copy of the owner’s challenge application, and file within 5 calendar days of service 2 copies of the application at the Loft Board and proof of service as described in 29 RCNY § 1-06(b).
(iv) The outgoing and prospective incoming tenants will have 7 calendar days from when service of the application is deemed complete to file with the Loft Board an answer to the challenge application. Two copies of the answer must be filed with the Loft Board. One copy of the answer must be served on the owner and the other affected parties, if any, prior to filing the answer with the Loft Board. Proof of service must be filed with the Loft Board in accordance with 29 RCNY § 1-06(e).
(v) The outgoing tenant’s answer must include 3 available dates and times during regular business hours within 10 calendar days of the date of filing of the answer with the Loft Board during which the improvements will be available to be inspected by a Loft Board-appointed appraiser in accordance with subparagraph (vi).
(vi) The appraiser shall be appointed by the Loft Board, must be suitably qualified in valuing improvements and must be a Registered Architect, a Professional Engineer or a New York State Certified General Real Estate Appraiser.
(vii) The Board shall also notify the owner, outgoing tenant and prospective incoming tenant of an inspection date at one of the times designated by the outgoing tenant, or at another time fixed by the Board if none of the proposed dates is mutually convenient. Following the inspection, a copy of the appraiser’s findings will be mailed to the three parties. A conference or hearing date must be scheduled no fewer than 8 calendar days nor more than 15 calendar days from the mailing of the notice of conference or hearing or, if applicable, the filing of the appraiser’s report. There may be no more than one adjournment per party, limited to 7 calendar days, for good cause shown. Except as provided in these rules, the requirements of the Loft Board’s rules regarding applications apply.
(viii) If a challenge application results in an order by the Loft Board determining that the offer constitutes fair market value, the owner may exercise the right to purchase improvements at that price. If the Loft Board determines that the offer does not constitute fair market value, in accordance with 29 RCNY § 2-07(g)(2), the owner may exercise the right to purchase the improvements at the price determined to constitute fair market value. The owner must notify the outgoing tenant within 10 calendar days of service of the Loft Board’s order determining fair market value of the owner’s intent to purchase at such price less half the cost of the appraisal and must consummate the purchase within 10 calendar days of the owner’s notice to the outgoing tenant, except that where the fair market value determination is less than the price offered by the outgoing tenant, the outgoing tenant may decline to sell the improvements. The Loft Board’s order determining fair market value constitutes the price at which the outgoing tenant must first offer to sell the previously offered improvements to the owner for a period of 2 years from the date of the Loft Board order.
(ix) If the owner elects not to purchase the improvements at the Loft Board-determined fair market value, the outgoing tenant may sell to the prospective incoming tenant, without challenge by the owner to the fair market value of the offer. The owner’s failure to consummate a purchase, following notice of intent to purchase, within the period prescribed above, is deemed an election not to purchase.
(2) Grounds for challenge. An owner may challenge a proposed sale of improvements on the following grounds:
(i) The offer is not a bona fide, arms-length offer which discloses to the owner all its terms and conditions.
(ii) Some or all of the improvements offered for sale were made or purchased by the owner, not the outgoing tenant. Proof of ownership or payment is required.
(iii) The offer exceeds fair market value as determined in accordance with the following standards:
(A) A bona fide offer to purchase improvements made or purchased by the outgoing tenant is presumed to represent fair market value.
(B) The presumption may be rebutted if the owner establishes that:
(a) For such improvements as were purchased by the outgoing tenant, the offer exceeds the amount paid for the improvements minus depreciation for wear and tear and age; or
(b) For such improvements as were made by the outgoing tenant, the offer exceeds the replacement cost of the improvements minus depreciation for wear and tear and age.
(C) If any of the improvements offered for sale are out of compliance with the New York City Building Code or other applicable laws or regulations, the noncompliance may not be considered when calculating the amount paid for or the replacement costs of the improvements, for improvements made or purchased prior to (a) March 23, 1985, or (b) September 11, 2013, the effective date of this amended rule, for a unit covered under Article 7-C pursuant to MDL § 281(5).
(iv) On any other basis authorized under Article 7-C.
(v) If a basis of a challenge is the unsuitability of the prospective incoming tenant, the owner may only initiate an action based on that ground in a court of competent jurisdiction; such challenge will not be entertained by the Loft Board.
(3) Affected Parties. The term “affected parties,” when used in an application challenging an offer to purchase improvements, is limited to the owner and the outgoing tenant, except that a prospective incoming tenant is an affected party in cases involving an owner’s challenge to the prospective incoming tenant’s offer to purchase improvements.
(1) In the event that:
(i) The failure of an owner to comply with the legalization deadlines mandated by MDL § 284(1) results in a municipal vacate order pursuant to MDL § 284(1)(x);
(ii) The Loft Board grants a hardship exemption pursuant to MDL § 285(2); or
(iii) The owner successfully obtains the right to occupy former IMD units under the provisions of the Rent Stabilization Law and the Rent Stabilization Code §§ 2524.4(a) and 2525.6, an occupant qualified for Article 7-C protections may apply to the Loft Board for a determination of fair market value of improvements and reasonable moving expenses.
(2) As further provided in MDL § 284(1)(x), any vacate order pursuant to 29 RCNY § 2-07(i)(1)(i) above, is to be deemed an order to correct the non-compliant conditions, subject to the provisions of Article 7-C, and the occupant has the right to reoccupy the unit when the condition has been corrected and is entitled to all applicable protections of Article 7-C.
(3) The Loft Board shall determine the fair market value in accordance with this section except that the tenant shall be the applicant, affected parties shall be limited to the owner and tenant, and the tenant shall offer proof of reasonable moving expenses as well as both parties offering proof as to the value of the improvements.
(4) Upon a finding by the Loft Board of the fair market value of the improvements and of reasonable moving expenses, the owner will be required to pay such amounts to the tenant plus an amount equal to the application filing fee.
(1) Except as provided in paragraph (2) below, within 30 calendar days of the sale of improvements to the owner, pursuant to MDL § 286(6), the owner must file a Loft Board-approved Sale Record, which provides the following information: address of IMD and location of unit; name and telephone number of incoming tenant; description of improvements conveyed; purchase price; and rent. Failure by the owner to file the required Sale Record within 30 calendar days of the sale of improvements may subject the owner to a civil penalty, as determined by the Loft Board in accordance with 29 RCNY § 2-11.1.
(2) If a prospective incoming tenant purchases the improvements in the IMD unit, no further filing is required. Unless the Loft Board is otherwise informed, receipt by the Loft Board of a Disclosure Form is presumed to be notice that a sale to the prospective incoming tenant identified has taken place within 60 calendar days following receipt of such Disclosure Form, or 60 calendar days following the last deadline modification approved by the Loft Board.
If no sale has occurred, the outgoing tenant must inform the Loft Board within 60 calendar days following the filing of the Disclosure Form, or 60 calendar days from the last deadline. If the outgoing tenant fails to advise the Loft Board within the prescribed 60 calendar days that no sale has taken place, such tenant may refute the presumption by: 1) filing a letter withdrawing the previously filed Disclosure Form, or 2) filing another Disclosure Form, with a new proposed sale along with an affidavit by the outgoing tenant stating that the prior proposed sale did not occur, that the tenant has remained in occupancy of the unit and that no sale of improvements in the unit has occurred.
§ 2-08 Coverage and Issues of Status.
Registration as an interim multiple dwelling (hereinafter “IMD”) with the New York City Loft Board (hereinafter “Loft Board”) shall be required when a building, structure or portion thereof meets the criteria for an IMD set forth in §§ 281, 282-a of Article 7-C of the Multiple Dwelling Law (hereinafter “MDL”) and these rules.
(1.) Building.
(i) As defined in § 12-10 of the Zoning Resolution, a building is any structure which:
(A) is permanently affixed to the land;
(B) has one or more floors and a roof; and
(C) is bounded by either open area or the lot lines of a zoning lot.
(ii) A building may be a row of structures, and have one or more structures on a single zoning lot. (iii) In deciding whether a structure is a single building, as distinguished from more than one building for purposes of IMD determination, the Loft Board shall employ the definition set forth above, and consider inter alia the following factors:
(A) whether the structure is under common ownership;
(B) whether contiguous portions of the structure within the same zoning lot are separated by individual load-bearing walls, without openings for the full length of their contiguity, as distinguished from non-loadbearing partitions;
(C) whether the structure has been operated as a single entity, having one or more of the following:
(a) a common boiler;
(b) a common sprinkler system;
(c) internal passageways;
(d) common fire escapes; or
(e) other indicia of operation as a single entity.
(D) whether the owner or a predecessor has at any time represented in applications or other official papers that the structure was a single building;
(E) whether a single certificate of occupancy has been requested or issued for the structure; and
(F) the pattern of usage of the building during the applicable qualifying window periods: (i) from April 1, 1980, to December 1, 1981, for buildings seeking coverage under Article 7-C pursuant to MDL § 281(1), (ii) from April 1, 1980 to May 1, 1987, for buildings seeking coverage under Article 7-C pursuant to MDL § 281(4), or (iii) from January 1, 2008 to December 31, 2009, for buildings seeking coverage under Article 7-C pursuant to MDL § 281(5).
(2.) Grandfathering. For purposes of these rules, “grandfathering” means the administrative process by which a residential unit, located where residential use is not otherwise permitted by the Zoning Resolution, is determined by the agency designated in the Zoning Resolution, to have been residentially occupied on a specified date, and is therefore a legal residential use as of right, eligible for Article 7-C coverage.* The term “residential use as of right” as employed in MDL § 281(2) means that the New York City Zoning Resolution permits residential use in the area in which the building is located. Grandfathering may also be accomplished by a special permit process defined in subdivision (ii) below, which requires a further discretionary approval in addition to determination of occupancy on a specified date.
(i) Minor modification and an administrative certification. A “minor modification,” and an “administrative certification” as found in MDL § 281(2)(i) are terms which refer to various procedures which may be specified in the Zoning Resolution in addition to the grandfathering determinations of occupancy concerning non-discretionary actions by the agency to which an application must be made.
(ii) Special permit. A “special permit” as found in MDL § 281(2)(iv) is a term referring to a grandfathering procedure specified in the Zoning Resolution which involves a discretionary determination, and approval by the City Planning Commission, to which the application must initially be made, and by the Board of Estimate or any entity which succeeds it in this function.**
(3.) Living Independently. For purposes of MDL § 281 and these rules, “living independently” means having attributes of `independent living’ by a family in each residential unit, such as:
(i) a separate entrance providing direct access to the residential unit from a street or public area, such as a hallway, elevator, or stairway within a building;
(ii) one or more rooms such as a kitchen area, a bathroom, a sleeping area and a living room area arranged to be occupied exclusively by the members of a family and their guests, which room or rooms are separated, and set apart from all other rooms within a building; and (iii) such other indicia of independent living which demonstrate the residential unit’s use as a residence of a family living independently.
(4.) Residential unit.
(i) In order for a residential unit to be deemed an IMD unit qualifying for coverage under Article 7-C, the unit must:
(A) be the residence or home of a “family” as defined in MDL § 4(5)*** that is living independently;
(B) be located in a building, a portion of which was occupied at any time for manufacturing, commercial or warehouse purposes;
(C) lack a residential certificate of occupancy issued pursuant to MDL § 301, as further delineated in 29 RCNY § 2-08(b);
(D) except as set forth below in 29 RCNY §§ 2-08(a)(4)(ii), and (iii), be located in a geographical area in which the Zoning Resolution permits residential use as of right or in which the residential use may become a use as of right as a result of approval of a grandfathering application, in accordance with MDL §§ 281(2)(i), or (iv); or is located in a study area designated by the Zoning Resolution for possible rezoning to permit residential use, in accordance with MDL § 281(2)(iii);
(E) be located in a building that is not municipally owned;
(F) except as set forth below in 29 RCNY §§ 2-08(a)(4)(ii), and (iii), be occupied by a family living independently for residential purposes on December 1, 1981, since April 1, 1980 for coverage under § 281(1), and
(G) pursuant to MDL § 282-a, either (i) have been registered as part of an IMD building, structure or portion thereof by the landlord of such building, by that certain date which is 6 months after the date the Loft Board shall have adopted all rules necessary in order to implement the provisions of Chapters 135 and 147 of the Laws of 2010 (ii) have been included as part of a coverage application filed by a residential occupant of the building, structure or portion thereof by that certain date which is 6 months after the date the Loft Board shall have adopted all rules necessary in order to implement the provisions of Chapters 135 and 147 of the Laws of 2010 or (iii) if the landlord is directed to file a registration application form by a court of competent jurisdiction pursuant to a claim of Article 7-C coverage raised in a pleading before the certain date listed in 29 RCNY § 1-06.1(a), and on the Loft Board’s website.
(ii) In addition to the criteria set forth in subparagraph (i) of this 29 RCNY §§ 2-08(a)(4), in order for a residential unit to qualify for coverage under Article 7-C pursuant to MDL § 281(4), such residence or unit must have been occupied by a family living independently for residential purposes on May 1, 1987, since December 1, 1981, and occupied for residential purposes since April 1, 1980, regardless of whether the building is located in a geographical area in which the Zoning Resolution permits residential use as of right, or through grandfathering as defined in 29 RCNY § 2-08(a)(2), or because the building is located in a study area as defined in 29 RCNY § 2-08(a)(5).
(iii) Notwithstanding the foregoing, in order for a residential unit to qualify for coverage under Article 7-C pursuant to MDL § 281(5), as set forth in these rules, a residential unit is not required to have been residentially occupied between April 1, 1980 through December 1, 1981, but is required to have been occupied by a family living independently for residential purposes during a period of twelve consecutive months between January 1, 2008 through December 31, 2009, as further delineated in 29 RCNY §§ 2-08(c)(3) and (c)(4), regardless of whether the building is geographically located in an area in which the Zoning Resolution permits residential use. In addition to the criteria set forth in subparagraph (A), (B), (C), (E), and (G) of 29 RCNY § 2-08(a)(4)(i), in order for a residential unit to qualify as an IMD unit for purposes of coverage under Article 7-C pursuant to MDL § 281(5), such residence or home must:
(A) not be located in a “cellar” or “basement,” as such terms are defined in MDL §§ 4(37), and 4(38) respectively;
(B) have a means of access from a street or public area, such as a hallway, elevator or stairway, and the unit must not require passage through another residence, or unit to obtain access;
(C) contain at least 1 window that opens onto a street, lawful yard or court;
(D) contain at least 400 square feet in area;
(E) not be located in an industrial business zone, as such term is defined in chapter 6-D of Title 22 of the New York City Administrative Code, except for buildings located in the:
(i) Williamsburg/Greenpoint industrial business zone;
(ii) North Brooklyn industrial business zone; or
(iii) Long Island City industrial business zone, provided that the residential units meet the qualifying criteria set forth above and the buildings are located in the following area of the Long Island City industrial business zone:
(a) have frontage on either side of 47th Avenue,*
(b) be located north of 47th Avenue and south of Skillman Avenue, or
(c) be located north of 44th Drive, south of Queens Plaza north, and west of 23rd Street; and
(F) not be located in the same building that contained, as of June 21, 2010, and continuing at the time of the submission of an application for coverage by any party, a use actively and currently pursued that is determined by the Loft Board to be inherently incompatible with residential use, as defined in 29 RCNY § 2-08(k).
(5.) Study area. A study area as found in MDL § 281(2)(iii) is a term referring to an area, defined in § 42-02 of the Zoning Resolution, which is currently zoned as manufacturing and under study by the City Planning Commission for a determination of the appropriateness of the zoning.
(1) Registration as an IMD shall not be required of any building, structure or portion thereof for which a final residential certificate of occupancy was issued pursuant to MDL § 301 prior to:
(i) June 21, 1982, for buildings, structures, or portions thereof seeking coverage under Article 7-C solely pursuant to MDL § 281(1);
(ii) July 27, 1987, for buildings, structures or portions thereof seeking coverage under Article 7-C solely pursuant to MDL § 281(4);
(iii) June 21, 2010, for buildings, structures or portions thereof seeking coverage under Article 7-C pursuant to MDL § 281(5) as enacted in Chapter 135 or as amended in Chapter 147 of the Laws of 2010; or (iv) June 1, 2012, for buildings, structures, or portions of buildings seeking coverage under Article 7-C pursuant to § 281(5) as amended in Chapter 4 of the Laws of 2013. Such units shall be exempt from Article 7-C coverage unless the residential certificate of occupancy is revoked.
(2) Registration as an IMD with the Loft Board shall be required of:
(i) Any building, structure, or portion thereof, which otherwise meets the criteria for an IMD set forth in:
(A) MDL § 281(1), and these rules, for all residentially-occupied units which lacked a final residential certificate of occupancy issued pursuant to § 301 of the MDL prior to June 21, 1982,
(B) MDL § 281(4), and these rules for all residentially-occupied units which lacked a final certificate of occupancy issued pursuant to § 301 of the MDL prior to July 27, 1987,
(C) MDL § 281(5) as enacted in Chapter 135 or as amended in Chapter 147 of the Laws of 2010, and these rules, for all residentially-occupied units which lacked a final certificate of occupancy issued pursuant to MDL § 301, prior to June 21, 2010, or
(D) MDL § 281(5) as amended in Chapter 4 of the Laws of 2013, and these rules, for all residentially-occupied units which lacked a final certificate of occupancy issued pursuant to MDL § 301, prior to June 1, 2012. Issuance of a certificate of occupancy pursuant to MDL § 301 for such units on or after June 21, 1982, July 27, 1987, June 21, 2010, or June 1, 2012, as applicable, will not be the basis for exemption from Article 7-C coverage;
(ii) Any building, structure, or portion thereof which meets the criteria for an IMD set forth in MDL § 281, and these rules, for all residentially occupied units which obtained a temporary residential certificate of occupancy issued pursuant to MDL § 301 prior to:
(A) June 21, 1982 for units covered under MDL § 281(1),
(B) July 27, 1987 for units covered under MDL § 281(4),
(C) June 21, 2010 for units covered under MDL § 281(5) as enacted in Chapter 135 or as amended in Chapter 147 of the Laws of 2010, and
(D) June 1, 2012 for units covered under MDL 281(5) as amended in Chapter 4 of the Laws of 2013. Issuance of a temporary residential certificate of occupancy for such units prior to these dates will not be the basis for exemption from Article 7-C coverage if on or after these dates a period of time of any length existed for any reason during which a temporary or final certificate of occupancy issued pursuant to MDL § 301 was not in effect for such units;
(iii) Any building, structure or portion thereof, which otherwise meets the criteria for an IMD set forth in MDL § 281, and these rules, for all residentially occupied units for which a final certificate of occupancy issued pursuant to MDL § 301 has been revoked. The prior issuance of a final certificate of occupancy which has been revoked will not be the basis for exemption from Article 7-C coverage.
(iv) Any building, structure, or portion thereof that otherwise meets the criteria for an IMD set forth in MDL § 281, and these rules, and contains residential units which were subsequently converted to non-residential use following the applicable time period required to qualify such unit for coverage under Article 7-C. Current commercial use or commercial use after the qualifying window period shall not be the basis for exemption from Article 7-C coverage.
(1) Registration with the Loft Board shall be required of any building, structure or portion thereof, which otherwise meets the criteria for an IMD set forth in MDL § 281(1), and these rules, and had at least three units residentially occupied on December 1, 1981, since April 1, 1980. If the building, structure or portion thereof contained three units so occupied on December 1, 1981, and on April 1, 1980, and if such residential use is permissible under the Zoning Resolution as of right, or through grandfathering, or the units are in a study area as defined in 29 RCNY § 2-08(a)(5), there shall be a presumption that the building is an IMD and that such units are covered under Article 7-C. However, if there is a determination by the Loft Board that there was a bona fide change to exclusively non-residential use in a unit between April 1, 1980, and December 1, 1981, such unit shall not be counted for purposes of determining whether the building qualifies for coverage as an IMD pursuant to MDL § 281(1). The occupant of any unit which changed to a bona fide exclusively non-residential use must have been a party distinct, and independent of the owner of the building for the presumption of IMD coverage to be rebutted.
(2) Registration with the Loft Board shall also be required of any building, structure or portion thereof, which otherwise meets the criteria for an IMD set forth in MDL § 281(4), and these rules, that had one or more units residentially occupied on May 1, 1987, since December 1, 1981, that was occupied for residential purposes since April 1, 1980, regardless of whether residential use is permitted under the Zoning Resolution as of right, or through grandfathering as defined in 29 RCNY § 2-08(a)(2), or because the building is located in a study area as defined in 29 RCNY § 2-08(a)(5). Residential occupancy of one or more units of the building, structure or portion thereof, as described in this paragraph, on May 1, 1987, on December 1, 1981, and on April 1, 1980, shall create a presumption that the building is an IMD or that such unit or units are covered under Article 7-C. However, if there is a determination by the Loft Board that there was a bona fide change to exclusively non-residential use in a unit between April 1, 1980, and December 1, 1981, or between December 1, 1981 and May 1, 1987, such unit shall not be counted for purposes of determining whether the building qualifies for coverage as an IMD pursuant to MDL § 281(4). The occupant of any unit which changed to a bona fide exclusively non-residential use must have been a party distinct and independent of the owner of the building for the presumption of IMD coverage to be rebutted.
(3) Registration with the Loft Board shall also be required of any building, structure or portion thereof which otherwise meets the criteria for an IMD set forth in MDL § 281(5) and these rules that contained at least three units residentially occupied by families living independently from one another for a period of twelve consecutive months between January 1, 2008 through December 31, 2009, regardless of whether residential use is permitted under the Zoning Resolution. However, if there is a determination by the Loft Board that there was a bona fide change to exclusively non-residential use in a unit during such qualifying twelve consecutive month window period, such unit shall not be counted for purposes of determining whether the building qualifies for coverage as an IMD pursuant to MDL § 281(5). The occupant of any unit which changed to a bona fide exclusively non-residential use must have been a party distinct and independent of the owner of the building for the presumption of IMD coverage to be rebutted. It is not required that the units that seek coverage under MDL § 281(5) occupy their respective units during the same twelve consecutive month period.
(4) Registration with the Loft Board shall also be required of any building, structure or portion thereof located in that certain area of Manhattan bounded on the south by West 24th Street, on the north by West 27th Street, on the east by Tenth Avenue and on the west by Eleventh Avenue, which contain at least two units residentially occupied by families living independently from one another for a period of twelve consecutive months between January 1, 2008 through December 31, 2009, regardless of whether residential use is permitted under the Zoning Resolution. However, if there is a determination by the Loft Board that there was a bona fide change to exclusively non-residential use in a unit during such qualifying twelve consecutive month window period, such unit shall not be counted for purposes of determining whether the building qualifies for coverage as an IMD pursuant to MDL § 281(5). The occupant of any unit which changed to a bona fide exclusively non-residential use must have been a party distinct and independent of the owner of the building for the presumption of IMD coverage to be rebutted. It is not required that the units in the same building seeking coverage under MDL § 281(5) be occupied residentially during the same consecutive twelve-month period.
(5) Neither vacancies of any duration for units residentially occupied on:
(i) December 1, 1981, and on April 1, 1980 as set forth in 29 RCNY § 2-08(c)(1) above, or
(ii) May 1, 1987, December 1, 1981, and April 1, 1980 as set forth in 29 RCNY § 2-08(c)(2) above, or
(iii) at any time prior to or following the qualifying twelve consecutive month window period between January 1, 2008 through December 31, 2009, as set forth in 29 RCNY §§ 2-08(c)(3) or (c)(4) above, nor a change or changes of residential occupants in any such units during the intervening period(s) will be the basis for exemption from Article 7-C coverage.
(1) For purposes of counting residential units to determine whether a building qualifies for coverage as an IMD building and must be registered, each unit must meet the criteria set forth in MDL § 281 and these rules, including 29 RCNY § 2-08(a)(4).
(i) The following types of units may qualify for Article 7-C coverage, provided that each unit satisfies the applicable criteria for coverage set forth in 29 RCNY § 2-08(a)(4), pursuant to MDL § 281(1), 281(4), or 281(5):
(a) any residential unit designated as “Artist in Residence” (A.I.R.) pursuant to directives of the Department of Buildings creating such status;
(b) any residential unit designated as “joint living work quarters for artists” [pursuant to the Zoning Resolution] except as provided below in 29 RCNY § 2-08(d)(2)(ii);
(c) any residential unit occupied by a subtenant or assignee of the prime tenant of such unit.
(ii) For a unit to qualify as a residential IMD unit, the building in which it is located must meet the criteria of MDL §§ 281 and 281(2)(ii) in that:
(A) a portion of the building or structure was occupied at any time for manufacturing, commercial or warehouse purposes;
(B) the building, structure or portion thereof lacked a residential certificate of occupancy pursuant to MDL § 301 as further delineated in 29 RCNY §§ 2-08(b)(1) and (2);
(C) except as otherwise set forth in MDL § 281(5), and these rules, it contained at least three units residentially occupied on December 1, 1981, since April 1, 1980; and
(D) it is not municipally owned.
(2) For purposes of counting to determine whether a building qualifies as an IMD, and is covered under Article 7-C, residential units described as follows shall not be included:
(i) any units designated as residential on a final certification of occupancy issued pursuant to MDL § 301 prior to:
(A) June 21, 1982 for a unit seeking coverage under MDL § 281(1);
(B) July 27, 1987 for a unit seeking coverage under MDL § 281(4);
(C) June 21, 2010 for a unit seeking coverage under MDL § 281(5) as enacted in Chapter 135 or as amended in Chapter 147 of the Laws of 2010; or
(D) June 1, 2012 for a unit seeking coverage under MDL § 281(5) as amended in Chapter 4 of the Laws of 2013.
(ii) any units designated as “joint living work quarters for artists” on a final certificate of occupancy issued prior to:
(A) June 21, 1982 for a unit seeking coverage under MDL § 281(1);
(B) July 27, 1987 for unit seeking coverage under MDL § 281(4);
(C) June 21, 2010 for a unit seeking coverage under MDL § 281(5) as enacted in Chapter 135 or as amended in 147 of the Laws of 2010; or
(D) June 1, 2012 for a unit seeking coverage under MDL § 281(5) as amended in Chapter 4 of the Laws of 2013; and
(iii) any units designated for a commercial use with an accessory residential use on a final certificate of occupancy issued prior to:
(A) June 21, 1982 for a unit seeking coverage under MDL § 281(1);
(B) July 27, 1987 for a unit seeking coverage under MDL § 281(4);
(C) June 21, 2010 for a unit seeking coverage under MDL § 281(5) as enacted in Chapter 135 or as amended in 147 of the Laws of 2010; or
(D) June 1, 2012 for a unit seeking coverage under MDL § 281(5) as amended in Chapter 4 of the Laws of 2013.
(1) Registration as an IMD shall be required of any building, structure, or portion thereof, which meets the criteria for an IMD as set forth in MDL § 281(1), and these rules, including without limitation 29 RCNY § 2-08(a)(4). Notwithstanding the foregoing, any building located in a zoning district designated as manufacturing in the Zoning Resolution, for which district there are no “grandfathering” provisions as defined in these rules shall not qualify as an IMD unless such buildings, structures or portions thereof otherwise meet the criteria of:
(i) MDL § 281(1), if such IMD building is located in a “Study area” as defined in 29 RCNY § 2-08(a)(5), and the registration of such building shall be required, or
(ii) MDL § 281(1), if such IMD building also meets the requirements of MDL § 281(4), and the rules issued pursuant thereto, or
(iii) MDL § 281(5), and these rules. Except for a building or structure or portion thereof which qualifies for coverage under Article 7-C solely by reason of MDL §§ 281(4) or 281(5), the zoning regulations, and the grandfathering provisions for the district in which a building or structure is located determine whether and when the owner of such building, which otherwise meets the criteria for an IMD set forth in MDL § 281, and these rules issued pursuant thereto, is mandated to meet the compliance requirements for legalization set forth in MDL § 284(1).
(2) Any building, structure or portion thereof, which otherwise meets the criteria for an IMD set forth in MDL § 281(1) and these rules, and which is located in an area which permits residential use as of right, shall be obligated to meet the compliance requirements for legalization by the dates designated in MDL § 284(1), except as provided in 29 RCNY §§ 2-08(e)(4)(i), and (iii) infra, and as further delineated in 29 RCNY § 2-01(a).
(3) Any IMD unit designated as “joint living work quarters for artists” in a zoning district which does not otherwise permit residential use as of right and which is currently occupied by a resident or residents who cannot qualify as certified artists, as defined in § 276 of Article 7-B of the MDL, shall qualify for Article 7-C coverage if the building in which such unit is contained otherwise meets the criteria for an IMD set forth in MDL § 281, and these rules. The non-artist status of the current occupant shall not be the basis for exemption from Article 7-C coverage. At the time of issuance of the final certificate of occupancy, the occupant of such a unit must be in compliance with the Zoning Resolution, or the unit must be vacant.
(4) Legalization compliance timetable.
(i) For any building, structure or portion thereof, which contains fewer than three residential units as of right and one or more residential units eligible for coverage by employing one of the grandfathering procedures set forth in MDL §§ 281(2)(i) or (iv) and defined in 29 RCNY § 2-08(a)(2)(i) and (ii), the timing of the compliance requirements of MDL § 284(1) shall commence upon approval of the grandfathering application of the unit which becomes the third eligible residential unit for purposes of calculation of residential units qualifying the building as an IMD.
(ii) For any registered building in the category described in 29 RCNY § 2-08(e)(4)(i), for which denial of a grandfathering application reduces the number of qualifying residential units below three, IMD status for such building expires and the other residential units in such building cease to be covered by Article 7-C, unless the building qualifies for coverage under Article 7-C pursuant to MDL §§ 281(4) or (5) and these rules.
(iii) Any building, structure or portion thereof which contains three or more residential units as of right, and one or more additional units eligible for coverage by employing one of the grandfathering provisions of MDL §§ 281(2)(i) or (iv), shall be obligated to meet the compliance requirements for legalization by the dates designated in MDL § 284(1), as further delineated in 29 RCNY § 2-01(a), for such as of right residential units. The timing of the compliance requirements for the other eligible units shall commence as follows:
(A) Where an application for grandfathering for such unit is made pursuant to one of the procedures designated as a “minor modification” or “administrative certification” in MDL § 281(2)(i), upon a determination of residential occupancy on the date designated in the particular grandfathering provision of the Zoning Resolution;
(B) Where an application for grandfathering for such unit is made pursuant to a “special permit application” as designated in MDL § 281(2)(iv), upon the granting of such special permit.
(iv) For any unit eligible for coverage by employment of one of the grandfathering procedures set forth in MDL §§ 281(2)(i), or (iv) and defined in 29 RCNY §§ 2-08(a)(2)(i) and (ii), the final denial of a grandfathering application or the failure to apply for grandfathering within the time period specified in the Zoning Resolution will terminate coverage for such unit unless such unit qualifies for coverage under Article 7-C pursuant to MDL § 281(4) or MDL § 281(5).
(v) For any building, structure or portion thereof, which otherwise meets the criteria for an IMD set forth in MDL § 281(1) and these rules, but is located in an area designated by the Zoning Resolution as a study area, the timing of the compliance requirements of MDL § 284(1) shall commence upon rezoning of such study area to permit residential use as of right. If the rezoning permits residential use only through grandfathering procedures, the timing of the compliance requirements of MDL § 284(1) and the rules issued pursuant thereto shall commence upon the approval of the grandfathering application of the unit which becomes the third eligible residential unit for purposes of calculation of units qualifying the building as an IMD. For any registered building in a study area as described in 29 RCNY § 2-08(a)(5), for which the City Planning Commission approved neither rezoning nor grandfathering by December 31, 1983, IMD status for such building expires and all of the units in such building cease to be covered by Article 7-C, unless there is a recommended extension of such deadline by the City Planning Commission. If the Board of Estimate, or its successor, disapproves rezoning for residential use or grandfathering, or the extension of such deadline, IMD status for such building expires and all the units in such building cease to be covered by Article 7-C. Notwithstanding the foregoing, any building, structure or portion thereof which ceased to be covered under Article 7-C as a result of the failure to rezone the study area, permit grandfathering or to extend the deadlines as set forth in the foregoing paragraph shall be covered by Article 7-C if it meets the criteria of MDL §§ 281(4) or 281(5).
(vi) For any building, structure or portion thereof that meets the criteria for an IMD set forth in MDL § 281(5) and these rules, the timing of the code-compliance deadlines are set forth in MDL § 284(1)(vi) and 29 RCNY §§ 2-01(a)(9) and (10).
(vii) For any building, structure or portion thereof registered pursuant to MDL § 281(5) for which there is a revocation of IMD status of one or more units in the building by the Executive Director as a result of a determination that such unit(s) did not meet the qualifying criteria set forth in 29 RCNY § 2-08(a)(4), and such revocation reduces the number of qualifying residential units below three (or two, with respect to an IMD building located in the geographic area described in 29 RCNY § 2-08(c)(4)), the IMD status for the entire such building shall expire and each of the units in the building shall be deemed to be “non-covered units”. As set forth below, occupants of non-covered units are not entitled to the protections of Article 7-C. Residential occupancy of a non-covered unit shall not be permitted in the building until a final certificate of occupancy that designates the non-covered unit as residential is obtained.
(1) Any building, structure or portion thereof, which otherwise meets the criteria for an IMD as set forth in MDL § 281 and these rules, but is municipally owned, shall be exempt from coverage under Article 7-C.
(2) Any building, structure or portion thereof, which otherwise meets the criteria for an IMD as set forth in MDL §§ 281(1), 281(4) or 281(5) and these rules, formerly municipally owned, but for which title passed to a private owner, shall be required to register as an IMD and shall not be exempt from coverage under Article 7-C. The former ownership by the municipality shall not be the basis for exemption from Article 7-C coverage.
(1) (i) In a building, structure or portion thereof which meets the criteria of MDL §§ 281(1) and 281(2), or 281(4), and these rules, thereby qualifying as an IMD building, the occupant or occupants of any additional unit residentially occupied for the first time after April 1, 1980 but prior to April 1,1981 in such IMD building may also be covered under Article 7-C pursuant to MDL § 281(3). In order to qualify for coverage pursuant to MDL § 281(3), the occupancy of such unit must be permissible under the Zoning Resolution. For purposes of 29 RCNY § 2-09(3), occupancy of such additional unit(s) shall be deemed permissible if:
(i) the unit is located in a zoning district where residential use as of right is permitted under the Zoning Resolution; or
(ii) the unit is designated as “joint living work quarters for artist” in a zoning district which does not otherwise permit residential use as of right, regardless of whether the occupant or occupants qualify as “certified artists” as defined in § 12-10 of the Zoning Resolution; or
(iii) the unit can qualify as having a legal residential use pursuant to one of the grandfathering provisions of the Zoning Resolution, as defined in 29 RCNY § 2-08(a); or
(iv) the unit is in a study area, as defined in 29 RCNY § 2-08(a), for which the City Planning Commission has approved either rezoning for residential use or grandfathering by December 31, 1983.
(ii) In a building, structure, or portion thereof that meets the criteria of MDL §§ 281(1), and 281(2), or 281(4), and these rules, thereby qualifying as an IMD building, the occupant or occupants of any additional unit residentially occupied during a period of twelve consecutive months between January 1, 2008 through December 31, 2009, in the IMD building may also be covered under Article 7-C provided that such additional unit meets the criteria set forth in MDL § 281(5) and as further delineated in these rules, including 29 RCNY § 2-08(a)(4).
(2) Registration of such accreted and additional units as part of the IMD shall be required for all units that qualify for Article 7-C coverage.
(3) Where a building, structure or portion thereof meets the criteria of MDL §§ 281(1), and 281(2), 281(3), 281(4) or 281(5), and these rules, it must be registered with the Loft Board. A decrease in the number of residential units in a building that qualifies for coverage pursuant to MDL § 281 to fewer than three or two, as permitted in accordance with the terms and provisions set forth in MDL § 281(5) and these rules, after the applicable time period required for residential occupancy pursuant to MDL § 281, will not be the basis for exemption from Article 7-C coverage. In such instances, the owner, landlord, or agent of the building, structure or portion thereof shall be required to obtain a residential certificate of occupancy, unless the units are duly converted into a non-residential use in accordance with the terms and provisions of the MDL, these rules and all applicable law. However, the discontinuance of residential occupancy:
1.) after December 1, 1981 but prior to May 1, 1987 of a unit which qualifies for coverage under Article 7-C solely by reason of MDL § 281(4), or
2.) during the twelve month period required for coverage pursuant to MDL § 281(5), will result in such unit being exempt from Article 7-C coverage. Solely with respect to such instances, the remaining residentially occupied units, limited to units in existence during the qualifying period of occupancy, set forth in MDL § 281(1)(iii), 281(4) or 281(5), as further delineated in § 2-08(c), and accreted units as defined in MDL § 281(3) and 29 RCNY § 2-08(g)(1), shall be entitled to the protections of Article 7-C, including the legalization requirements of MDL § 284(1), provided these units also meet the statute of limitations requirements for coverage in MDL § 282-a.
(1) Any unit that does not meet the statutory requirements for coverage set forth in MDL § 281, as further detailed in these rules, is not covered by Article 7-C. Any space in an IMD which was not occupied residentially during a window period set forth in MDL § 281 and is subsequently converted to residential use, is not covered by Article 7-C, and the owner of such unit must obtain a residential certificate of occupancy before permitting the commencement of such occupancy.
(2) Notwithstanding the foregoing, if a building qualifies as an IMD,
(i) any unit first occupied residentially on or after April 1, 1981, is not covered under Article 7-C, unless such unit meets the criteria qualifying for an IMD pursuant to MDL § 281(5), as set forth in 29 RCNY § 2-08(a)(4)(iii). Any residential unit first occupied residentially on or after January 2, 2009 is not covered under Article 7-C pursuant to MDL § 281(5).
(ii) any building or unit that meets the criteria for coverage pursuant to MDL § 281 is not covered under Article 7-C if:
(a) the owner, lessee or agent failed to register the building or the unit as an IMD; or
(b) a residential occupant failed to file a coverage application in accordance with the terms and provisions of these rules; or
(c) a tenant failed to raise the claim of Article 7-C coverage in a court of competent jurisdiction in a pleading on or before the date listed in 29 RCNY § 1-06.1(a) and on the Loft Board website, which constitutes 6 months after the Loft Board shall have adopted all rules necessary in order to implement the provisions of Chapters 135 and 147 of the laws of 2010 which added MDL § 281(5). Occupants of any non-covered unit are not entitled to the protections of Article 7-C. Residential occupancy of such unit shall not be permitted unless a final residential certificate of occupancy is obtained for the unit.
(i) has or should have a New York City or New York State environmental rating of “A”, or “B” under Section 24-153 of the New York City Administrative Code for any process equipment requiring a New York City Department of Environmental Protection operating certificate; or
(ii) is or should be required under the Community Right-to-Know Law, at Chapter 7 of Title 24 of the Administrative Code of the City of New York, to file a Risk Management Plan for Extremely Hazardous Substances; or
(iii) is or should be classified as High-Hazard Group H occupancy as set forth in Section 307 of the New York City Building Code.
(1) is clearly incidental to or secondary to the residential use of the residential unit;
(2) is carried on within the residential unit, by one or more occupants of such residential unit;
(3) does not use more than 49 percent of the total floor area of a dwelling unit for the non-residential purposes; and
(4) has up to three non-residential employees.
(1) previously undisclosed facts, or misrepresentations or false statements as to material facts in the registration application or submitted documents regarding the information which was the basis for the Loft Board issuance of an IMD registration number are discovered, or
(2) the Loft Board issued an IMD registration number in error and conditions are such that the IMD registration number should not have been registered. Such notice will inform the owner of the reasons for the revocation and that the owner has the right to present to the Executive Director or his or her representative within 10 business days of delivery of the notice by hand or 15 calendar days of the posting of the notice by mail, information as to why the registration should not be revoked.
§ 2-08.1 Eviction of Residential Occupants.
(a) Grounds for eviction. The landlord of an IMD registered with the Loft Board may bring eviction proceedings against the residential occupant of a unit in a court of competent jurisdiction on any of the following grounds:
(1) that the unit is not the primary residence of such residential occupant, except that where a lease or rental agreement is in effect between the landlord and such residential occupant, the landlord may not seek to evict such occupant until such lease or rental agreement is no longer in effect; or
(2) that the residential occupant is committing or permitting a nuisance in such unit; or is maliciously or by reason of gross negligence substantially damaging the building; or his or her conduct is such as to interfere substantially with the comfort and safety of the landlord or of the other occupants of the same building or of adjacent buildings or structures; or
(3) any of the grounds for eviction specified in the Real Property Law or the Real Property Actions and Proceedings Law, to the extent that such grounds are not inconsistent with Article 7-C and any regulations promulgated by the Loft Board.
(1) Any family member, as defined in paragraph (3) of this subdivision, shall not be evicted under subparagraph (a) of 29 RCNY § 2-08.1 where the protected occupant has permanently vacated the IMD unit and such family member has resided with the protected occupant in the unit as a primary residence for a period of no less than two years, or where such person is a “senior citizen” or a “disabled person,” as defined in paragraph (3) of this subdivision, for a period of no less than one year, immediately prior to the permanent vacating of the unit by the protected occupant, or from the inception of the occupancy or commencement of the relationship, if for less than such periods. The minimum periods of required residency set forth in this subdivision shall not be deemed to be interrupted by any period during which the “family member” temporarily relocates because he or she:
(i) is engaged in active military duty;
(ii) is enrolled as a full time student;
(iii) is not in residence at the unit pursuant to a court order not involving any term or provision of the lease, and not involving any grounds specified in the Real Property Actions and Proceedings Law;
(iv) is engaged in employment requiring temporary relocation from the housing unit;
(v) is hospitalized for medical treatment; or
(vi) has such other reasonable grounds that shall be determined by the Loft Board upon application by such person.
(2) On a form prescribed by the Loft Board, a protected occupant may, at any time, advise the landlord of, or a landlord may at any time, request from the protected occupant, the information required in subparagraphs (i) through (iv) of this paragraph (2). Failure of the protected occupant to provide such information to the landlord, regardless of whether the landlord requests the information, shall place upon all such persons not so made known to the landlord, who seek to exercise the right to protection from eviction as provided for in this subdivision, the affirmative obligation to establish such right. Such required information is as follows:
(i) the names of all persons other than the protected occupant who are residing in the unit; and
(ii) if such other person is a “family member” as defined in paragraph (3) of this subdivision; and
(iii) if such other person is, or upon the passage of the applicable minimum period of required residency, may become a person entitled to protection from eviction pursuant to paragraph (1) of this subdivision, and the date of the commencement of such person’s primary residence with the protected occupant; and
(iv) if such other person is a “senior citizen” or a “disabled person” as defined in paragraph (3) of this subdivision.
(3) For the purposes of this subdivision:
(i) “family member” is defined as a husband, wife, son, daughter, stepson, stepdaughter, father, mother, stepfather, stepmother, brother, sister, grandfather, grandmother, grandson, granddaughter, father-in-law, mother-in-law, son-in-law, or daughter-in-law of the protected occupant; or any other person residing with the protected occupant in the IMD unit as a primary residence who can prove emotional and financial commitment, and interdependence between such person and the protected occupant. Although no single factor shall be solely determinative, evidence which is to be considered in determining whether such emotional and financial commitment and interdependence existed, may include, without limitation, such factors as listed below. In no event would evidence of a sexual relationship between such persons be required or considered.
(A) longevity of the relationship;
(B) sharing of or relying upon each other for payment of household or family expenses, and/or other common necessities of life;
(C) intermingling of finances as evidenced by, among other things, joint ownership of bank accounts, personal and real property, credit cards, loan obligations, sharing a household budget for purposes of receiving government benefits, etc.;
(D) engaging in family-type activities by jointly attending family functions, holidays and celebrations, social and recreational activities, etc.;
(E) formalizing of legal obligations, intentions, and responsibilities to each other by such means as executing wills naming each other as executor and/or beneficiary, conferring upon each other a power of attorney and/or authority to make health care decisions each for the other, entering into a personal relationship contract, making a domestic partnership declaration, or serving as a representative payee for purposes of public benefits, etc.;
(F) holding themselves out as family members to other family members, friends, members of the community or religious institutions, or society in general, through their words or actions;
(G) regularly performing family functions, such as caring for each other or each other’s extended family members, and/or relying upon each other for daily family services;
(H) engaging in any other pattern of behavior, agreement, or other action which evidences the intention of creating a long-term, emotionally committed relationship;
(ii) a “senior citizen” is defined as a person who is sixty-two years of age or older;
(iii) a “disabled person” is defined as a person who has an impairment which results from anatomical, physiological or psychological conditions, other than addiction to alcohol, gambling, or any controlled substance, which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques, and which are expected to be permanent and which substantially limit one or more of such person’s major life activities.
(4) Any persons in occupancy of an IMD unit on or after the effective date of this rule who has then been in occupancy for the minimum periods of required residency set forth in this subdivision shall have the benefits of succession rights.
§ 2-09 Occupant Qualified for Article 7-C Protection, Privity, Subletting and Recovery of Subdivided Unit.
(a) Definitions.
Prime lessee means the party with whom the landlord entered into a lease or rental agreement for use and occupancy of a portion of an IMD, which is being used residentially, regardless of whether the lessee is currently in occupancy or whether the lease remains in effect.
Privity means a direct contractual relationship between two parties, which may be established explicitly, implicitly or by operation of law.
Tenant refers directly or implicitly to a residential tenant and is deemed interchangeable with the word “occupant” in Article 7-C and these rules.
(1) Except as otherwise provided herein, the occupant qualified for protection under Article 7-C is the residential occupant in possession of a residential unit, covered as part of an IMD.
(2) If the residential occupant in possession of a covered residential unit is not the prime lessee, the lack of consent of the landlord to a sublet, assignment or subdivision establishing such occupancy does not affect the rights of such occupant to protection under Article 7-C, provided that such occupant was in possession of such unit prior to:
(i) June 21, 1982, for an IMD unit subject to Article 7-C by reason of MDL § 281(1);
(ii) July 27, 1987, for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or
(iii) June 21, 2010, for an IMD unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010, and these rules.
(3) When a residential occupant took possession of a residential unit covered as part of an IMD, on or after:
(i) June 21, 1982, for an IMD unit subject to Article 7-C by reason of MDL § 281(1);
(ii) July 27, 1987, for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or
(iii) June 21, 2010, for an IMD unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010, and these rules, such occupant is qualified for the protection of Article 7-C if:
(i) The occupant is a prime lessee with a lease currently in effect or, if the occupant took possession of the IMD unit with the consent of the landlord, as a statutory tenant pursuant to Article 7-C, without the issuance of a new lease; or
(ii) The occupant is the assignee of a prime lessee and such assignment was consented to by the landlord; or
(iii) Prior to establishment of such occupancy, the landlord was offered the opportunity to purchase improvements in the unit pursuant to § 286(6) of the MDL and these rules.
(4) The prime lessee, or sublessor who is not the prime lessee, is deemed to be the residential occupant qualified for protection under Article 7-C, if the prime lessee or sublessor can prove that the residential unit covered as part of an IMD is his or her primary residence, even if another person is in possession. If the prime lessee or sublessor fails to prove that such unit is his or her primary residence, any rights of such person to recover the unit are extinguished.
(i) The prime lessee or sublessor must exercise, in a court of competent jurisdiction, his or her right to recover the unit upon the expiration or termination of the sublease under the terms of which the prime lessee or sublessor is the immediate overtenant, provided that the sublease was in effect on: September 25, 1983 for a unit covered under MDL § 281(1); November 22, 1992 for a unit covered under MDL § 281(4); or September 11, 2013, the effective date of this amended rule, for an IMD unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010.
(ii) Where the sublease was no longer in effect on the relevant date above, the prime lessee or sublessor must exercise, in a court of competent jurisdiction, his or her right to recover the unit on or before:
(A) December 24, 1983, for IMD units that are subject to Article 7-C by reason of MDL § 281(1); or
(B) February 21, 1993, for IMD units that are subject to Article 7-C solely by reason of MDL § 281(4).
(C) If the IMD unit became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010, and the sublease is no longer in effect, the prime lessee or sublessor must exercise the right to recover the unit on or before December 10, 2013, 90 days after the effective date of this amended rule, or if the unit is not subject to Article 7-C on September 11, 2013 the effective date of this amended rule, 90 days following the finding of coverage by a Loft Board order, a finding of coverage by a court of competent jurisdiction, or the issuance of an IMD registration number after filing of a registration application, whichever is earlier.
(5) Where a prime lessee is in possession of a portion of the space which he or she leased from the landlord, such prime lessee is entitled to remain in possession, and is qualified for protection under Article 7-C, only with respect to the portion of such space which he or she occupied as a residential unit, including any portion thereof used for home occupations or as the working portion of a joint-living-working quarters for artists. The prime lessee is not entitled to claim any of the remaining portion of the leased space as primary residence against the occupant of any other residential unit within such space, except to the extent provided for in 29 RCNY § 2-09(c)(5) below, and subject to the provisions of 29 RCNY §§ 2-09(b)(3) and (b)(4) above. The current residential occupants of the remaining unit(s) created through subdivision are qualified for protection under Article 7-C with regard to their respective residential units covered by Article 7-C, except as provided in 29 RCNY §§ 2-09(b)(3) and (b)(4).
(1) Legalization and cost of legalization. The landlord of an IMD building is responsible for legalization of each residential IMD unit pursuant to MDL § 284, regardless of whether the occupant is the prime lessee or a person or persons with whom the prime lessee entered into an agreement permitting such persons to occupy units in space covered by the prime lease. The costs of legalization, as reflected in rent adjustments made pursuant to MDL § 286(5), and apportioned among the covered residential units, shall be borne directly by the residential occupants qualified for protection of such units.
(2) Privity.
(i) Privity Between Residential Occupant and Prime Lessee. The residential occupant qualified for protection under Article 7-C, if other than the prime lessee, is deemed to be in privity with the prime lessee, if either:
(A) There is a lease or rental agreement in effect for the residential unit between the prime lessee and the residential occupant; or
(B) There is a lease or rental agreement in effect for the residential unit or the space in which it is located, between the landlord and the prime lessee. No lease or rental agreement between the prime lessee and the residential occupant has any force or effect beyond the term of the lease or rental agreement between the prime lessee and the landlord, except as provided in 29 RCNY §§ 2-09(c)(6) or (c)(7).
(ii) Privity Between Landlord and Prime Lessee. The prime lessee and the landlord are deemed to be in privity when there is a lease or rental agreement in effect between them.
(iii) Privity Between Residential Occupant and Landlord. The residential occupant and the landlord are deemed to be in privity when the residential occupant is the prime lessee; or when the lease or rental agreement between the prime lessee and the landlord, covering the residential occupant’s unit or the space in which it is located, is no longer in effect. All leases or rental agreements, except subleases entered into pursuant to § 226-b of the Real Property Law (“RPL”) and 29 RCNY § 2-09(c)(4), which have not expired will be deemed to be no longer in effect upon certification by the Department of Buildings of the landlord’s compliance with the fire and safety protection standards of Article 7-B. Upon such certification, a residential lease subject to the Emergency Tenant Protection Act of nineteen seventy-four must be offered to the residential occupant, pursuant to § 286(3) of the MDL.
(3) Services.
(i) When the landlord and residential occupant are in privity, the landlord is responsible for meeting the minimum housing maintenance standards established by the Loft Board in 29 RCNY § 2-04.
(ii) When the prime lessee and the residential occupant are in privity, there must not be any diminution of services provided by the prime lessee to the residential occupant. The prime lessee is responsible for meeting the minimum housing maintenance standards established by the Loft Board, to the extent such standards are required pursuant to the lease or rental agreement between the prime lessee and the residential occupant, and to the extent those services are within the control of the prime lessee. Otherwise, all services must be provided by the landlord.
(4) Subletting rights of occupants qualified for protection under Article 7-C.
(i) Right to Sublet. All occupants qualified for protection under Article 7-C have the right to sublet their units pursuant to and in accordance with the procedures specified in § 226-b of the RPL, notwithstanding that such occupants may reside in an IMD building having fewer than 4 residential units, and may not have a current lease or rental agreement in effect. The residential occupant of a unit located in a subdivided space, who is not in privity with the landlord, must obtain the consent of both the prime lessee of such space and the landlord to a proposed sublet of such unit, which may not be unreasonably withheld in accordance with § 226-b of the RPL.
(ii) Subletting Provisions. The right to sublet is subject to the following provisions:
(A) The rent charged to the subtenant may not exceed the legal rent, as established pursuant to Article 7-C and these rules, plus a ten percent surcharge payable to the residential occupant if the unit sublet is furnished with the residential occupant’s furniture;
(B) The residential occupant must be able to establish that the residential unit is his or her primary residence;
(C) The residential occupant may not sublet the unit for more than a total of two years, including the term of the proposed sublease, out of the four-year period preceding the termination date of the proposed sublease;
(D) The term of the proposed sublease may extend beyond the term of the residential occupant’s lease, if such a lease is in effect, or beyond the date of the Department of Buildings certification of the landlord’s compliance with Article 7-B of the MDL. In such event, the sublease is subject to the residential occupant’s right to continued occupancy pursuant to Article 7-C of the MDL, including the right of the residential occupant to issuance of a lease in accordance with the terms and provisions of MDL § 286(3) and these rules, upon Article 7-B compliance. It is considered unreasonable for a landlord to refuse to consent to a sublease solely because the residential occupant has no lease or rental agreement in effect or because the sublease extends beyond the residential occupant’s lease or beyond the anticipated date of achieving Article 7-B compliance.
(E) Where a residential occupant violates the provisions of this subparagraph (ii) of paragraph (4), the subtenant is entitled to damages of three times the overcharge and may also be awarded attorney’s fees and interest from the date of the overcharge at the rate of interest payable on a judgment pursuant to § 5004 of the Civil Practice Law and Rules.
(F) The provisions in clauses (A) through (E) of this 29 RCNY § 2-09(c)(4)(ii) apply to all subleases for IMD units which are subject to Article 7-C by reason of MDL § 281(1), commencing on or after September 25, 1983, the original effective date of these rules. Subleases entered into on or after June 21, 1982, but prior to September 25, 1983 are not subject to clauses (A), (C) and (E) of 29 RCNY § 2-09(c)(4)(ii), but are subject to clauses (B) and (D) of § 29 RCNY § 2-09(c)(4)(ii) and the provisions of § 226-b of the RPL, in effect at the time of the commencement of the sublease.
(G) Notwithstanding the provisions of clause (F) of this 29 RCNY § 2-09(c)(4)(ii), the provisions in clauses (A) through (E) of 29 RCNY § 2-09(c)(4)(ii) apply to all subleases for IMD units which are subject to Article 7-C solely by reason of MDL § 281(4) commencing on or after November 23, 1992. Subleases for such units entered into on or after July 27, 1987, but before November 23, 1992, are not subject to clauses (A), (C) and (E), but are subject to clauses (B) and (D) of 29 RCNY § 2-09(c)(4)(ii) and the provisions of § 226-b of the RPL, in effect at the commencement of the sublease.
(H) Notwithstanding the provisions of clauses (F) and (G) of 29 RCNY § 2-09(c)(4)(ii), the provisions in clauses (A) through (E) of 29 RCNY § 2-09(c)(4)(ii) apply to all subleases for IMD units that are subject to Article 7-C by reason of MDL § 281(5) commencing on or after September 11, 2013, the effective date of this amended rule. Subleases for such units entered into on or after June 21, 2010, but before September 11, 2013 are not subject to clauses (A), (C) and (E), but are subject to clauses (B) and (D) of 29 RCNY § 2-09(c)(4)(ii) and the provisions of § 226-b of the RPL, in effect at the commencement of the sublease.
(iii) If any clause, sentence, paragraph, subdivision or part of this 29 RCNY § 2-09(c)(4) is adjudged by any court of competent jurisdiction to be invalid, the judgment shall not render invalid this entire section on subletting rights of residential occupants.
(5) Prime Lessee’s Right to Recover Subdivided Space.
(i) Lease Between Prime Lessee and Landlord is in Effect and Residential Occupant Voluntarily Vocates the Subdivided Portion. Where the prime lessee is the residential occupant of a portion of the space leased from the landlord and the lease or rental agreement between the prime lessee and the landlord is in effect, the prime lessee may recover for his or her own personal use, a residential unit located within the leased space voluntarily vacated by the residential occupant prior to the establishment of privity between such residential occupant and the landlord. The right to recover space pursuant to this rule is not available to a prime lessee found by the Loft Board to have harassed any residential occupant(s). The recovered space will be deemed part of the prime lessee’s residential unit, and in no event may the prime lessee relet such space for any purposes whatsoever, except that the prime lessee retains the same rights to sublet the entire residential unit as provided in 29 RCNY § 2-09(c)(4).
(ii) Prime Lessee’s Right to Compensation for Improvements When the Residential Occupant Voluntarily Vocates the Subdivided Portion. Where a prime lessee waives the right to recover a residential unit in space leased by a prime lessee and vacated by the residential occupant, the prime lessee may sell improvements to the unit made or purchased by the prime lessee to an incoming tenant, provided that the prime lessee first offers the improvements to the landlord for an amount equal to their fair market value pursuant to § 286(6) of the MDL and the Loft Board rules. If the incoming tenant purchases the improvements, the incoming tenant is deemed in privity with the landlord, and the initial maximum rent is to be determined in accordance with 29 RCNY § 2-09(c)(6)(ii)(A). If the landlord purchases the improvements, the rent due shall be the initial market rental subject to subsequent rent regulation if the IMD has six or more residential units and if the sole basis for rent regulation is Article 7-C.
(iii) Lease Between Prime Lessee and Landlord is in Effect and Prime Lessee Wants to Recover the Subdivided Portion. Where the prime lessee is the residential occupant of a portion of the space the prime lessee has leased from the landlord and the lease or rental agreement between the prime lessee and the landlord is in effect, the prime lessee may recover for his or her own personal use, a residential unit located within the leased space, if the residential occupant of the unit agrees to the purchase by the prime lessee of the occupant’s rights in the unit. The recovered space will be deemed part of the prime lessee’s residential IMD unit, and in no event may the prime lessee relet such space for any purpose whatsoever, except that the prime lessee retains the same rights to sublet the entire residential IMD unit as provided in 29 RCNY § 2-09(c)(4).
(iv) Lease Between Prime Lessee and Landlord No Longer In Effect and Prime Lessee Wants to Recover Subdivided Portion. Where the lease or rental agreement between the prime lessee and the landlord is no longer in effect, the prime lessee’s right to recover space pursuant to this subsection expires on:
(A) July 5, 1988, for an IMD unit subject to Article 7-C by reason of MDL § 281(1);
(B) January 22, 1993, for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or
(C) November 12, 2013, 60 days after the effective date of this amended rule, or if the unit is not subject to Article 7-C on the effective date of this amended rule, 60 days following the finding of coverage by a Loft Board order, a finding of coverage by a court of competent jurisdiction, or issuance of an IMD registration number after the filing of a registration application by the owner, whichever is earlier, for IMD units subject to Article 7-C by reason of MDL § 281(5).
(v) Factors to Consider When Prime Lessee Seeks to Recover Subdivided Space. Where the prime lessee is the residential occupant of a portion of subdivided space that the prime lessee uses as his or her primary residence, and which the prime lessee has rented directly from the landlord, the prime lessee is entitled to recover as part of his or her primary residence, a residential unit, located within the leased space, even if the space is occupied by another person or persons, if the prime lessee can establish that:
(A) There was an express written agreement between the prime lessee and the occupant of such space, other than the mere expiration of the lease, entitling the prime lessee to recover such space, and that the prime lessee has not taken actions inconsistent with exercising the option entitling the prime lessee to recover such space;
(B) The prime lessee has occupied the entire demised premises as his or her own primary residence for at least one year prior to the subdivision and subletting of the unit;
(C) The prime lessee has a compelling need to recover such space; and
(D) The prime lessee has not been found to have harassed any residential occupants.
Space recovered pursuant to this provision is deemed part of the prime lessee’s residential IMD unit, and in no event may the prime lessee relet any recovered space for any purpose whatsoever, except that the prime lessee has the same rights to sublet the entire residential IMD unit as provided in 29 RCNY § 2-09(c)(4) above, provided, however, that no such sublet is permitted for the first 2 years after recovery. The prime lessee retains the right to make a claim to recover space pursuant to this provision, before the Loft Board, where there is a lease or rental agreement in effect between the prime lessee and the landlord, or, where a lease or rental agreement is no longer in effect, on or before:
(a) July 5, 1988 for an IMD unit subject to Article 7-C by reason of MDL § 281(1);
(b) January 22, 1993 for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or
(c) November 12, 2013, 60 days from the effective date of this amended rule, or if the unit is not subject to Article 7-C on the effective date of this amended rule, 60 days after the finding of coverage by a Loft Board order, a finding of coverage by a court of competent jurisdiction or the issuance of an IMD registration number after the filing of registration application by the owner, whichever is earlier, for IMD units subject to Article 7-C by reason of MDL § 281(5).
(6) Rent.
(i) Maximum Permissible Rent When Residential Occupant is in Privity With Prime Lessee. When the residential occupant is in privity with the prime lessee, the maximum permissible rent payable by the residential occupant to the prime lessee shall be:
(A) The rent established in the residential occupant’s lease or rental agreement, subject to the limitations in the applicable Loft Board Interim Rent Guidelines; or
(B) If such lease or rental agreement is no longer in effect, the amount permissible in accordance with 29 RCNY § 2-06 for an IMD unit subject to Article 7-C by reason of MDL § 281(1); or in accordance with 29 RCNY § 2-06.1 for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or in accordance with 29 RCNY § 2-06.2 for an IMD unit subject to Article 7-C by reason of MDL § 281(5); and subject to any other relevant orders or rules of the Loft Board.
(ii) Maximum Permissible Rent When Residential Occupant is in Privity with Landlord. When the residential occupant is in privity with the landlord, the residential occupant must pay rent as follows:
(A) If the residential occupant is not the prime lessee, the maximum permissible rent is the amount last regularly paid under the terms of the lease or rental agreement with the prime lessee, or the sublessor, if other than the prime lessee, plus any increases permissible and subject to any limitations under 29 RCNY § 2-06 for an IMD unit subject to Article 7-C by reason of MDL § 281(1); or under 29 RCNY § 2-06.1 for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or under § 2-06.2 for an IMD unit subject to Article 7-C by reason of § 281(5); and subject to any other relevant orders or rules of the Loft Board.
(B) Maximum Permissible Rent When Prime Lessee is Residential Occupant of Entire Leased Space. If the prime lessee is the residential occupant of the entire space leased from the landlord, the maximum permissible rent is:
(a) The amount specified in the lease or rental agreement, subject to any limitations in the applicable Loft Board Interim Rent Guidelines; or
(b) If the lease or rental agreement is no longer in effect, the amount permissible pursuant to 29 RCNY § 2-06 for an IMD unit subject to Article 7-C by reason of § 281(1); or 29 RCNY § 2-06.1 for an IMD unit subject to Article 7-C solely by reason of MDL § 281(4); or 29 RCNY § 2-06.2 for an IMD unit subject to Article 7-C by reason of § 281(5); and subject to any other relevant orders or rules of the Loft Board.
(b) Maximum Permissible Rent When the Prime Lessee is Residential Occupant of a Portion of Leased Space and the Lease Between the Prime Lessee and the Landlord is Not in Effect. If the prime lessee is the residential occupant of a portion of the space leased from the landlord and the lease or rental agreement between the prime lessee and the landlord is no longer in effect for a residential unit or unit located in a portion of such leased space, because privity has been established between the residential occupant(s) of the subdivided unit or unit(s) and the landlord pursuant to 29 RCNY § 2-09(c)(2)(iii), the maximum permissible rent shall be based on the rent paid by the prime lessee to the landlord under the most recent rental agreement for the entire space, plus any increases permissible under 29 RCNY § 2-06 for an IMD unit subject to Article 7-C by reason of MDL § 281(1); or, under 29 RCNY § 2-06.1 for any IMD unit(s) subject to Article 7-C solely by reason of MDL § 281(4); or under 29 RCNY § 2-06.2 for an IMD unit subject to Article 7-C by reason of MDL § 281(5); and subject to any other relevant orders or rules of the Loft Board. The maximum permissible rent payable by the prime lessee to the landlord is equal to the percentage of the rent so calculated, equivalent to a fraction:
(1) The numerator of which is the square footage of the leased space occupied by the prime lessee’s unit, plus the square footage of any other unit regarding which the prime lessee remains in privity with the residential occupant, and
(2) The denominator of which is the entire square footage of the space leased from the landlord.
(1) The numerator of which is the square footage of the leased space which the prime lessee’s unit occupies, and
(2) The denominator of which is the entire square footage of the space leased from the landlord.
(b) Maximum Permissible Rent When the Rent Paid by the Residential Occupant and Prime Lessee is Greater than the Total Rent for the Unit. Where the rent paid by the residential occupant(s) of such space who were in privity with the prime lessee to the prime lessee and the prime lessee’s proportionate share of the rent as calculated under 29 RCNY § 2-09(c)(6)(ii)(D)(a) above, without inclusion of any increases permissible under the applicable Loft Board Interim Rent Guidelines or any other increase permitted in the Loft Board rules or Article 7-C, is greater than the rent specified in the most recent lease or rental agreement for the entire space leased between the prime lessee and the landlord or, if applicable, the rent as calculated under 29 RCNY § 2-09(c)(6)(ii)(C)(b), the landlord has the option to treat the excess amount as follows:
(1) Reduce the monthly legal rent payable by the prime lessee by one-half of the excess amount as calculated on a monthly basis, provided the monthly legal rent may not be less than $100; or
(2) Make a single lump sum payment to the prime lessee equal to one-half of the monthly excess amount multiplied by 36.
The landlord may exercise the option to make a single lump sum payment at any time. If the landlord chooses the option of a single lump sum payment, after the prime lessee has commenced paying a rent calculated under item (1) above, the single lump sum payment due to the prime lessee from the landlord may not be diminished by the amount of the prior reductions in rent. Upon payment of the single lump sum payment, the landlord may increase the prime lessee’s monthly rent to the maximum permissible rent allowable under 29 RCNY § 2-09(c)(6)(ii)(D)(a) above. Any prime lessee found to have harassed any residential occupant is not entitled to the rent reduction or single lump sum payment provided for in items (1) and (2) above, respectively.
(c) Effective Date of Rent Adjustments. The rent adjustments provided in 29 RCNY § 2-09(c)(6)(ii)(A) and (c)(6)(ii)(D) apply to the next regular rent payment due on or after:
(i) July 5, 1988, for IMD units subject to Article 7-C pursuant to MDL § 281(1);
(ii) January 22, 1993, for IMD units subject to Article 7-C solely pursuant to MDL § 281(4); or
(iii) November 12, 2013, 60 days from the effective date of the amended rule, for IMD units subject to Article 7-C by reason of MDL § 281(5), if the lease or rental agreement between the prime lessee and the landlord is no longer in effect.
Otherwise, the rent adjustments apply to the next regular rent payment due after such lease or rental agreement, or portion thereof, is no longer in effect, but in no event earlier than:
(i) July 5, 1988, for IMD units subject to Article 7-C pursuant to MDL § 281(1);
(ii) January 22, 1993, for IMD units subject to Article 7-C solely by reason of MDL § 281(4); or
(iii) November 12, 2013, 60 days from the effective date of the amended rule, for IMD units subject to Article 7-C pursuant to MDL § 281(5).
(7) Prime lessee’s or sublessor’s right to compensation for costs incurred in developing residential unit(s).
(i) Right to Compensation. Where a prime lessee, or a sublessor who is not the prime lessee, has incurred costs for improvements made or purchased in developing residential unit(s) in any space for which the prime lessee or sublessor had or has a lease or rental agreement and for which the prime lessee or sublessor is not the residential occupant qualified for protection under Article 7-C, such prime lessee or sublessor is entitled to compensation from the residential occupant(s), for the prime lessee’s or sublessor’s actual costs incurred in developing the residential unit in question.
(ii) Agreements for Compensation for Improvements. The prime lessee or sublessor and the residential occupant may agree to payment of such compensation upon any terms that are mutually acceptable, at any time prior to the deadline for the filing of an application as described in subparagraph (iii) below. All such agreements must be submitted to the Loft Board within 90 calendar days following their execution.
(iii) Limitation on Right to Compensation. If the parties are unable to agree upon the amount and terms of compensation prior to the establishment of privity between the residential occupant and the landlord, as defined in 29 RCNY § 2-09(c)(2), the prime lessee, sublessor, or residential occupant, may apply to the Loft Board for resolution of the dispute over compensation of the prime lessee or sublessor. Such application may be brought after the residential unit has been registered with the Loft Board without timely contest of coverage or determined to be covered under Article 7-C by Loft Board order or a court of competent jurisdiction, but no later than 180 calendar days after the later of:
(A) May 6, 1988, for IMD unit(s) subject to Article 7-C by reason of § 281(1); or
(B) November 23, 1992, for any IMD unit(s) subject to Article 7-C solely by reason of MDL § 281(4); or
(C) September 11, 2013 for an IMD unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010; or
(D) The establishment of privity between the residential occupant and the landlord; or
(E) The earlier of the date the landlord’s registration of the residential unit without timely contest of coverage or the date of the determination of coverage of the residential unit by the Loft Board or a court of competent jurisdiction.
The application must comply with the rules of the Loft Board governing applications, including 29 RCNY § 1-06(a). The affected parties are limited to the prime lessee or sublessor, the residential occupant, and the owner. The application fee is due and payable at the time of filing the application.
(iv) Factors to Determine Whether Compensation is Due. The Loft Board must first determine whether any compensation is due and payable to the prime lessee or sublessor, as applicable, based on consideration of the following factors:
(A) Whether the prime lessee or sublessor incurred any costs, as defined in clause (A) of subparagraph (v) below, allocable to the particular unit in question; and
(B) Whether the prime lessee or sublessor has already been compensated in accordance with the terms of a prior agreement. The amount of rent paid to the prime lessee or sublessor, in excess of a proportionate share of the rent paid by the prime lessee to the landlord, based on the percentage of the total square footage of space occupied, will not be credited towards compensation of the prime lessee or sublessor, in the absence of a specific agreement.
(v) Factors to Determine the Amount Due for Improvements. If it is determined that the prime lessee or sublessor, as applicable, did incur costs for improvements for which he or she has not yet been compensated, the Loft Board will determine the amount due and payable in accordance with the following criteria:
(A) All improvements as defined in 29 RCNY § 2-07, are compensable;
(B) The Loft Board will establish the value of the improvements by determining the actual costs incurred for the improvements based on evidence presented;
(C) Compensation determined to be due and payable may be made in accordance with a payment schedule agreed to by the prime lessee or sublessor, as applicable, and the residential occupant, or, if no agreement is reached, a payment schedule not to exceed 6 months, set by the Loft Board, contained in the Loft Board’s order.
(vi) Compensation made pursuant to this paragraph (7) provides residential occupants with an opportunity to purchase improvements but does not constitute a sale of improvements pursuant to § 286(6) of the MDL.
(vii) (A) Compensation by the Owner. A residential occupant may offer the landlord an opportunity to compensate the prime lessee or sublessor for costs incurred for improvements made or purchased in developing a residential IMD unit. The compensation to be paid by the landlord is the amount determined by agreement of the prime lessee or sublessor, as applicable, and the residential occupant, pursuant to subparagraph (7)(ii) above, or as determined by the Loft Board pursuant to subparagraph (7)(v) above. If the landlord chooses to pay this compensation to the prime lessee or sublessor, the residential occupant remains the occupant qualified for Article 7-C protection, except that the residential occupant will have no right to sell such improvements purchased by the landlord pursuant to § 286(6) of the MDL. Compensation of the prime lessee or sublessor by the landlord does not affect the rent due from the residential occupant;
(B) if the landlord compensates the prime lessee or sublessor pursuant to (A) above, the prime lessee or sublessor will have no right to recover the unit for his or her own personal use pursuant to 29 RCNY §§ 2-09(b)(4) and (c)(5). When the residential occupant vacates the unit, the landlord is entitled to lease the unit at market rent, absent a finding by the Loft Board of harassment by the landlord of occupants;
(C) if the landlord declines the opportunity to compensate the prime lessee or sublessor, the residential occupant remains responsible for the compensation payment established pursuant to subparagraphs (ii) or (v) above.
(8) Residential occupant’s right to sale of improvements pursuant to MDL § 286(6). In accordance with MDL § 286(6) and the Loft Board rules, a residential occupant is entitled to sell all improvements to the unit made or purchased by the residential occupant:
(i) Upon filing an agreement with the Loft Board pursuant to 29 RCNY § 2-09(c)(7)(ii), or
(ii) Following a Loft Board determination of an application filed pursuant to 29 RCNY § 2-09(c)(7)(iii), or
(iii) Upon the expiration of the deadline for filing an application, if none has been filed.
§ 2-10 Sales of Rights.
(a) Right to sell and the limitations on an occupant's right to sell.
(1) The Right to Sell. The residential occupant of an IMD unit may sell the rights afforded such occupant pursuant to Article 7-C, to the owner of the IMD or the owner’s authorized representative, including a net lessee, in accordance with the terms of MDL § 286(12) and these rules. A sale pursuant to MDL § 286(12), after the effective date of the relevant provision of MDL § 281, as provided in 29 RCNY § 2-10(a)(2) below, constitutes a sale to the owner of all of the tenant’s rights in the unit.
(2) Limitations.
(i) No sale or agreement made prior to:
(A) June 21, 1982 for units subject to Article 7-C pursuant to MDL § 281(1),
(B) July 27, 1987 for units subject to Article 7-C solely pursuant to MDL § 281(4), or
(C) June 21, 2010 for units covered under MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010, in which an occupant purported to waive rights under the Article 7-C will be given any force or effect.
(ii) For any sale made pursuant to MDL § 286(12), the unit subject to a sale of rights may not be the subject of another sale pursuant to MDL § 286(12); nor may such unit be the subject of a subsequent sale of improvements pursuant to MDL § 286(6).
The Loft Board’s approved form must be signed by the owner or its authorized representative and the occupant and his or her authorized representative, if any, who sold rights to the unit. If the occupant refuses to sign the form, the owner or its authorized representative must file with the form a sworn statement identifying the occupant, the reasons given by such occupant for refusing to execute the form and proof of the sale of rights, including supporting documentation. If the prior occupant could not be found, the owner or its representative must provide a description of the reasonable efforts used to locate the occupant and must file proof of the sale of rights including supporting documentation.
Except as provided in paragraph (c) below, failure by the owner or the owner’s authorized representative to file a sales record form within 30 calendar days of the date of the sale may subject the owner to a civil penalty as determined by the Loft Board in 29 RCNY § 2-11.1.
(1) Filing deadlines:
(i) For a unit subject to Article 7-C pursuant to MDL § 281(1), if the sale of rights occurred after June 21, 1982, but before March 16, 1990, the owner or its authorized representative must file the sales record form and the sales agreement with the Loft Board on or before June 14, 1990;
(ii) For a unit subject to Article 7-C solely pursuant to MDL § 281(4), if the sale of rights occurred after July 27, 1987, but before November 23, 1992, the current owner or its authorized representative must file the sales record form and the sales agreement with the Loft Board on or before February 21, 1993; or
(iii) For a unit covered by MDL § 281(5) that became subject to Article 7-C pursuant to Chapter 135 or 147 of the Laws of 2010, if the sale of rights occurred after June 21, 2010, but before September 11, 2013 the effective date of this section, the current owner or its authorized representative must file the sales record form and the sales agreement with the Loft Board on or before December 10, 2013, which is 90 calendar days following the effective date of this section.
(2) The sales record form must contain a sworn statement by the owner or its authorized representative, on a form issued by the Loft Board, as to the current use and occupancy of the unit. If the owner intends to use the unit for non-residential purposes, the owner must: a) disclose its intention on the sales record form; and b) include a declaration of intent by the owner or its authorized representative that the use is consistent with applicable provisions of the New York City Zoning Resolution and the New York City Administrative Code, and in conformity with any existing certificate of occupancy, and any other source of legal authorization for such use.
(3) If the owner indicates in the sales record an intention to use the unit for non-residential purposes, the unit will be subject to inspection to determine its compliance with the requirements set forth in 29 RCNY § 2-10(d)(1)(ii).
(4) Failure by the owner or the owner’s authorized representative to timely file a sales record form may subject the owner to a civil penalty as determined by the Loft Board in 29 RCNY § 2-11.1. The Loft Board may inspect any unit for which a sale of rights has occurred prior to the effective date of these rules. The Loft Board may also inspect any unit for which a sales record form was not timely filed to determine the current use of space.
(1) Non-Residential use.
(i) If the unit is to be used for non-residential purposes after a sale of rights pursuant to MDL § 286(12), upon approval by the Loft Board, the owner will be relieved of its obligations to comply with the requirements of Article 7-C of the MDL regarding such unit. The non-residential use must comply with applicable provisions of the New York City Zoning Resolution and the New York City Administrative Code, and with any existing certificate of occupancy for the unit, and any other source of legal authorization for such use. The unit may not be converted to non-residential use if there is a harassment finding by the Loft Board as to any occupants of the unit that the Loft Board has not terminated pursuant to 29 RCNY § 2-02(d)(2). If the Loft Board issues a harassment finding after the sale of rights, the owner is permitted to convert the IMD unit to non-residential use, provided that all other applicable requirements in this section are met.
(ii) Prior to conversion to a non-residential use, the owner or its authorized representative must file with the Loft Board a declaration of intent on a form issued by the Loft Board stating that the unit will only be occupied for a conforming non-residential use. Following the Loft Board’s receipt of the filing, the Loft Board must conduct or require an inspection of the premises to verify that the following fixtures, as defined in 29 RCNY § 2-07(a), have been removed or approved: (1) fixtures that were constructed or installed without necessary approvals by the appropriate government agencies and for which approvals have not been secured, and (2) fixtures that are intended primarily for residential occupancy.
The results of this inspection will be reported to the owner or its authorized representative. A determination on the request for non-residential conversion will be issued after the removal or approval of these fixtures has been verified. Any disputes will be resolved by application to the Loft Board.
(iii) Prior to approval by the Loft Board, in accordance with 29 RCNY § 2-10(d)(1)(ii), the owner remains subject to all the requirements of Article 7-C, these rules, and orders of the Loft Board, including the legalization requirements of MDL § 284.
(iv) When the conversion of a unit to a non-residential conforming use reduces the number of IMD units below three or two, as provided by MDL § 281(5), the IMD status for the building and for the remaining IMD units in the building, and the protections provided in Article 7-C to the protected occupants will not be eliminated.
(v) Notwithstanding the provisions of 29 RCNY § 2-01(l), if conversion of a unit to a non-residential conforming use increases the costs of legalization under MDL § 284 for the remaining IMD units, the additional increased costs must be paid by the owner and may not be passed through to the remaining residential occupants pursuant to Article 7-C and these Rules.
(2) Residential use. If the unit is to remain residential after a sale of rights pursuant to MDL § 286(12), the owner remains subject to all of the requirements of Article 7-C, these rules and orders of the Loft Board, including the legalization requirements of MDL § 284, except that the unit is no longer subject to rent regulation where coverage under Article 7-C was the sole basis for such rent regulation. The exemption from rent regulation will not be permitted if there is a finding by the Loft Board of harassment as to any occupant(s) in the IMD unit which has not been terminated pursuant to 29 RCNY § 2-02(d)(2).
(3) Termination of harassment. If a sale of rights pursuant to MDL § 286(12) occurs during the period between the date of the order finding harassment and the date of the order terminating the harassment finding, the sale of rights does not relieve the owner of the requirements of Article 7-C, including rent regulation, and the owner may not convert the unit to non-residential use. The effect of a termination of harassment finding applies prospectively only.
(1) An owner or its authorized representative may apply to the Loft Board for a determination that the occupant of an IMD unit has abandoned the unit and no sale of rights pursuant to MDL § 286(12) or sale of improvements pursuant to MDL § 286(6) has been executed, provided there has been no finding of harassment as to any occupant(s) of the unit which has not been terminated pursuant to 29 RCNY § 2-02(d)(2).
(2) Abandonment means the relinquishment of possession of a unit and all rights relating to a unit either: (i) voluntarily, with the intention of never resuming possession or reclaiming the rights surrendered, or (ii) by the death of the IMD tenant, provided no family member, as defined in 29 RCNY § 2-08.1(c)(3), is denied the benefits of succession rights in accordance with 29 RCNY § 2-08.1.
(3) To be considered timely, an owner’s application alleging abandonment must be filed with the Loft Board within 1 year of the date the owner knew or should have known that the IMD tenant vacated the unit.
(4) In deciding whether a unit has been abandoned voluntarily pursuant to subparagraph (i) of paragraph (2) above, the factors the Loft Board may consider include, but are not limited to, the following:
(i) The length of time since the occupant allegedly abandoned the unit;
(ii) Whether the occupant owed rent as of the time the occupant allegedly abandoned the unit and whether court proceedings to attempt to collect this rent have been initiated;
(iii) Whether the occupant’s lease for the unit has expired;
(iv) Whether the occupant provided notice of an intent to vacate or requested permission to sublet the unit for a specific period of time;
(v) Whether the unit contained improvements which were made or purchased by the occupant and whether the occupant was reimbursed for those improvements;
(vi) Whether any prior harassment findings have been made by the Loft Board concerning the occupant(s) of the unit or whether any harassment application remains pending;
(vii) Whether any notices of violation or notices to appear pursuant to the Loft Board’s Minimum Housing Maintenance Standards have been issued;
(viii) Whether the owner has made affirmative efforts to locate the occupant to attempt to purchase rights pursuant to MDL § 286(12) or improvements pursuant to MDL § 286(6); and
(ix) Whether an inspection of the unit by the Loft Board staff indicates that the unit is presently vacant.
(5) In determining whether abandonment has occurred as a result of the death of an IMD occupant as set forth in subparagraph (ii) of paragraph (2) above, proof of the occupant’s death must be made by the presentation of a death certificate, or any other trustworthy evidence. The heir, beneficiary, administrator, or executor of the occupant’s estate, as applicable, is an affected party in a case where an owner seeks an abandonment finding based on the death of an IMD occupant.
(6) If the owner’s application alleging abandonment is granted by the Loft Board and if the unit is to be used for non-residential purposes, the owner or its authorized representative must comply with 29 RCNY § 2-10(d)(1).
(7) (i) Upon compliance with these specified provisions of 29 RCNY § 2-10(d)(1) with regard to units determined to be abandoned and used for non-residential purposes, the legal effect of the Loft Board’s determination of abandonment is the same as that of a sale of rights as provided in 29 RCNY § 2-10(d).
(ii) Upon the Loft Board’s granting of the owner’s application alleging abandonment with regard to units to remain residential, the legal effect of the Loft Board’s determination of abandonment is the same as that of a sale of rights as provided in 29 RCNY § 2-10(d), but only if:
(A) On or prior to the date of the Loft Board’s granting of the owner’s application alleging abandonment, the owner has obtained a certificate of occupancy for the affected building and filed an application seeking a final rent order and/or removal from the Loft Board’s jurisdiction; or
(B) Within one year after the date of the Loft Board’s granting of the owner’s application alleging abandonment, or prior to the expiration of the code compliance deadline for obtaining a certificate of occupancy in effect on the date of the Loft Board’s granting of such application, as such code compliance deadline may be extended pursuant to 29 RCNY § 2-01(b), whichever is earlier, the owner has obtained a certificate of occupancy for the affected building and has filed an application seeking a final rent order and/or removal from the Loft Board’s jurisdiction.
(8) If an IMD unit becomes vacant without a prior sale of rights or improvements and subparagraph (i) of paragraph (7) does not apply, and the owner fails to meet either the criteria set forth in 29 RCNY § 2-10(f)(7)(ii)(A) or the criteria set forth in 29 RCNY § 2-10(f)(7)(ii)(B), the unit must remain residential and the owner is not permitted to re-rent the unit at a market rate to the incoming tenant. Additionally, the owner must provide any incoming tenant(s) with written notice that the rent for the IMD unit may increase to a market rate if and when the owner complies with the criteria set forth in 29 RCNY § 2-10(f)(7)(ii)(A) or 29 RCNY § 2-10(f)(7)(ii)(B).
The written notice to an incoming tenant or tenants must include a copy of this subdivision (f) and a copy of the Loft Board order granting the abandonment application, if any. If an owner re-rents the unit at a market rate in violation of this provision, the incoming tenant(s) may challenge such rent by filing an application alleging a rent overcharge with the Loft Board.
(9) Paragraphs (3) and (8), and the amendments to paragraph (7) of this subdivision (f), made effective on October 8, 2006 apply only to those IMD units for which applications alleging abandonment are filed after April 8, 2007.
§ 2-11 Fees.
(a) Collection of fees. The Loft Board may charge and collect reasonable fees in the execution of its responsibilities. The Loft Board may, by amending these rules, add to, delete from or modify the types of applications for which fees are charged and/or revise the amount of the fee imposed.
(1) Registration and code compliance monitoring fee.
(i) Fee amount. The filing fee for registration and code compliance monitoring is $500.00 per residential unit.
(A) Annual registration. Registration of a building or portion of the building as an interim multiple dwelling (“IMD”) by the owner, lessee of a whole building, and the agent is required annually. The annual registration period begins on July 1st of each year and ends on June 30th of the following year. If more than 1 registration form is filed for a building, the filing fee for the residential IMD units in the building will be charged only once during any annual period.
(B) Fee required. Landlords filing annual renewal registration forms are required to pay the registration and code compliance monitoring fee prior to the processing of the registration form.
(C) Limitation on registration renewal. Registration as an IMD may be renewed only when all prior registration fees, all outstanding fines and all late filing fees pursuant to 29 RCNY § 2-11(b)(1)(i)(D) have been paid, or such owner has entered into, and is in compliance with, an installment agreement, payment plan or other similar arrangement for the payment of all outstanding monies due to the Loft Board.
(D) Late filing fees. If the annual renewal registration form and fee are not submitted by July 31st of each year in which they are required to be submitted, the owner must pay a late filing fee of $25.00 for the month of July for each residential IMD unit. Thereafter, the owner must pay an additional late filing fee of $5.00 per residential IMD unit for each month or portion of a month until the date when the completed registration form is submitted and the registration fee is paid.
(2) Code compliance applications.
(i) The filing fee for an application for rent adjustments based upon the costs of compliance with Article 7-B of the MDL, or of obtaining a final residential certificate of occupancy, or both is $100.00 for each residential unit that is the subject of the application.
(ii) The filing fee for an application for certification of estimated future rent adjustments is $75.00 for each residential unit that is the subject of the application.
(3) Article 7-C coverage applications.
(i) The filing fee for an application, filed by either the landlord or by the tenant, for coverage of any building or portion of the building, pursuant to Article 7-C of the MDL is $25.00 for each unit that is the subject of the application.
(4) Rent dispute applications.
(i) The filing fee for an application, filed by either the landlord or tenant, disputing base rent or rent increases, not including rent adjustments based on costs of code compliance, is $50.00.
(5) Challenge to proposed sale of improvements applications.
(i) Filing fees.
(A) The filing fee for a challenge to a proposed sale of improvements to a prospective incoming tenant filed with the Loft Board is $800.
(ii) There is no fee for filing a Disclosure Form or Sales Record.
(6) Diminution of service applications.
(i) The filing fee for an application filed by a tenant for diminution of a service or by a landlord disputing its responsibility for providing any such service is $50.00.
(7) Article 7-C compliance applications.
(i) The filing fee for an application filed by a tenant or landlord concerning the landlord’s compliance with Article 7-C is $50.00.
(8) Tenant harassment applications.
(i) Harassment applications. The filing fee for an application filed by a tenant complaining of harassment is $100.00.
(9) Application for late filing of the tenant’s alternate plan application.
(i) The filing fee for an application to allow late filing of an alternate plan application by a tenant is $50.00.
(ii) There is no filing fee for legalization plans filed by the landlord.
(10) Unreasonable interference with use applications.
(i) The filing fee for an application filed by a tenant for unreasonable interference with use of the IMD unit by the landlord during code compliance work is $50.00.
(11) Landlord access applications.
(i) The filing fee for an application filed by the landlord for an order by the Board to permit access to tenants’ units to perform code compliance work following tenants’ refusal of such access is $50.00.
(12) Landlord hardship applications.
(i) The filing fee for an application filed by the landlord for a hardship exemption from Article 7-C is $1,000.00.
(13) Decoverage applications.
(i) The filing fee for an application filed by the landlord for an exemption from legalizing nonconforming units (decoverage) is $200.00.
(14) Appeals to the Loft Board of administrative determinations.
(i) The filing fee for an application to appeal the Loft Board staff’s administrative determination, such as a request for an extension of a code compliance deadline, is $100.00.
(15) Reconsideration applications.
(i) The filing fee for an application for reconsideration of a Loft Board order is $100.00.
(16) Abandonment applications.
(i) The filing fee for an application for a determination that the occupant of an IMD unit has abandoned the unit is $100.00.
(17) Sublessor – prime lessee compensation applications.
(i) The filing fee for an application to determine the value of improvements made or purchased by the prime lessee or a sublessor who is not the residential occupant qualified for protection pursuant to 29 RCNY § 2-09 is $500.00.
(18) Extension applications.
(i) The filing fee for an extension of a code compliance deadline application is $50.00.
(19) Other applications.
(i) The filing fee for all other types of applications filed with the Loft Board is $50.00.
(1) The application fee is due and payable upon the applicant’s submission of the application to the Loft Board. If an application fee is not paid at the time the application is submitted, the application will be deemed incomplete, and will not be considered filed or processed until such payment is made, unless a request for a waiver of the application fee is submitted at the time the application is filed, pursuant to subdivision (e) below. Payment may be made in person or by mail, by certified check, teller check or money order made payable to the City Collector, at the offices of the Loft Board.
(1) An applicant may request a waiver of the fees provided in this section on the basis of financial hardship. No waiver of fees will be permitted for registration applications set forth in 29 RCNY § 2-11(b)(1)(i).
(2) Procedure for requesting a waiver of application fees.
(i) The request for a waiver of fees pursuant to this section must be received by the Loft Board at the time the application is filed. The request must be made by letter setting forth all pertinent information, including the applicant’s name, address, building address, IMD registration number, if applicable, and type of application for which waiver is requested. The request must be accompanied by the affidavit required by 29 RCNY § 2-11(e)(2)(ii) below.
(ii) The request for a waiver of application fees must be filed with an affidavit setting forth:
(1) the amount and all sources of applicant’s income,
(2) any property owned and the value thereof,
(3) a statement stating why a waiver of fees is requested, and
(4) any other facts that will be helpful to the Loft Board in making a determination. The Loft Board may demand additional information prior to making the determination on the waiver request. The applicant must file the additional information with the Loft Board within 25 calendar days following the mailing date of the Loft Board’s demand for additional information.
(3) The Loft Board will notify the applicant in writing of its determination regarding the waiver request. If the Loft Board denies the waiver request, it will provide a new deadline for the application fee. Failure to file the application fee by the new deadline may result in return of the application.
§ 2-11.1 Fine Schedule.
(a) Collection of fines. The Loft Board may charge and collect fines for violation of its rules. The Loft Board may, by amending these rules, modify the types of violations for which fines are assessed and/or revise the amount of the fine imposed.
(1) Code Compliance Fines Pursuant to 29 RCNY § 2-01 and 29 RCNY § 2-01.1: Where the owner is found to have violated code compliances deadlines or failed to take all reasonable and necessary action to obtain a final certificate of occupancy, the owner may be subject to a Class C civil penalty as follows:
| VIOLATION DESCRIPTION | SECTION OF LAW | CURE | PENALTY |
|---|---|---|---|
| Failure to Meet Code Compliance Deadlines: §§ 281(1) and (4) buildings | MDL § 284 (1); 29 RCNY § 2-01(a)(1) through (a)(7), (c)(2) | No | Up to $1,000 per missed deadline |
| Failure to Meet Code Compliance Deadlines: §§ 281(1) and (4) Buildings | MDL § 284(1); 29 RCNY § 2-01(a)(8), (c)(2) | No | Up to $5,000 per missed deadline |
| Failure to Meet Code Compliance Deadlines: § 281(5) Buildings | MDL § 284(1); 29 RCNY §§ 2-01(a)(9), (a)(10), (c)(2) | No | Up to $5,000 per missed deadline |
| Failure to Take Reasonable and Necessary Action to Obtain a Final Certificate of Occupancy | 29 RCNY § 2-01.1(a), (b)(2), (b)(3) | No | Up to $1,000 per day up to $17,500 |
| Failure to Take Reasonable and Necessary Action: Failure to Timely Clear DOB objections for Owner’s Alteration Application | 29 RCNY § 2-01(d)(2)(ix) | Yes within 30 days | Up to $1,000 per day up to $17,500 |
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(2) Fines in Connection with Harassment Applications Pursuant to 29 RCNY § 2-02: A finding by the Loft Board that:
(i) A tenant filed a harassment application in bad faith or in wanton disregard of the truth pursuant to 29 RCNY § 2-02(c)(2)(iii); or
(ii) An owner or prime lessee harassed an occupant pursuant to 29 RCNY § 2-02(d)(1)(ii) or (e)(3)(i), in a manner that impacts on the tenant’s safety including, but not limited to, refusing to make repairs, repeated housing maintenance violations intended to render the unit uninhabitable, assault, battery or threats of violence; or
(iii) An owner or prime lessee harassed an occupant pursuant to 29 RCNY § 2-02(d)(1)(ii) or (e)(3)(i) of these Rules in a manner that impacts on the tenant’s quality of life, including, but not limited, to creating excessive noise or odors, threatening eviction, refusal to consent to sublet, and/or tampering with mail, May subject the tenant, owner or prime lessee to a Class C civil penalty as follows:
| VIOLATION DESCRIPTION | SECTION OF LAW | CURE | PENALTY | AGGRAVATED PENALTY |
|---|---|---|---|---|
| Harassment Application Filed in Bad Faith | 29 RCNY § 2-02(c)(2)(iii) | No | Up to $4,000 | A tenant found to have previously filed a harassment application in bad faith may be subject to an aggravated penalty of up to $10,000. |
| Finding of Harassment: Safety Violations e.g., Hazardous Conditions; Housing Maintenance Violations; Refusal to Make Repairs | 29 RCNY § 2-02(d)(1)(ii), (e)(3)(i) | No | $3,000 to $6,000 for each occurrence found to constitute harassment | An owner or prime lessee previously found to have harassed a tenant may be subject to an aggravated penalty of up to $10,000. |
| Finding of Harassment: Quality of Life Violations e.g., Noise; Odors; Threat of Eviction; Refusal to Consent to Sublet | 29 RCNY § 2-02(d)(1)(ii), (e)(3)(i) | No | $2,000 to $5,000 for each occurrence found to constitute harassment | An owner or prime lessee previously found to have harassed a tenant may be subject to an aggravated penalty of up to $10,000. |
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(3) Failure to Renew IMD Registration Pursuant to 29 RCNY § 2-05: Where an owner fails to renew a building’s registration as required in 29 RCNY § 2-05(f)(2), the owner may be subject to a Class C violation civil penalty as follows:
| VIOLATION DESCRIPTION | SECTION OF LAW | CURE | PENALTY |
|---|---|---|---|
| Failure to Timely Renew Registration | 29 RCNY § 2-05(f)(2) | Yes | $5,000 for one year; $10,000 for two years; $17,500 for three years or more |
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(4) Fines in Connection with Unreasonable Interference Pursuant to 29 RCNY § 2-01(h): A finding by the Loft Board that:
(i) An owner unreasonably interfered with the tenant’s use of an IMD unit; or
(ii) An owner unreasonably and willfully interfered with the tenant’s use of an IMD unit, May subject the owner to a Class C civil penalty as follows:
| VIOLATION DESCRIPTION | SECTION OF LAW | CURE | PENALTY |
|---|---|---|---|
| Finding by the Loft Board of Unreasonable Interference with the Use of an IMD Unit | 29 RCNY § 2-01(h) | No | $2,500 |
| Finding by the Loft Board of Unreasonable and Willful Interference with the Use of an IMD Unit | 29 RCNY § 2-01(h) | No | $5,000 |
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(5) Monthly Reports and Failure to Take Reasonable and Necessary Action to Legalize Building Pursuant to 29 RCNY §§ 2-01.1(a)(1)(ii) and (b)(6): An owner who is found:
(i) By the Loft Board’s Executive Director to have violated the provisions of 29 RCNY § 2-01.1(b)(6) may be subject to a Class B civil penalty pursuant to 29 RCNY § 2-01.1(b)(7) as follows; or
(ii) To have failed to file monthly reports or to have made false statements in the monthly reports filed pursuant to 29 RCNY § 2-01.1(a)(1)(ii), may be subject to a Class B civil penalty as follows:
| VIOLATION DESCRIPTION | SECTION OF LAW | CURE within 30 days | PENALTY PER VIOLATION, UP TO $17,500 |
|---|---|---|---|
| Failure to Take Reasonable and Necessary Action: Failure to File an Application with DOB | 29 RCNY § 2-01.1(b)(6)(i), (b)(7) | Yes | Up to $1,000 per day |
| Failure to Take Reasonable and Necessary Action: Failure to Obtain a Building Permit | 29 RCNY § 2-01.1(b)(6)(ii), (b)(7) | Yes | Up to $1,000 per day |
| Failure to Take Reasonable and Necessary Action: Failure to Maintain a Current Work Permit | 29 RCNY § 2-01.1(b)(6)(iii), (b)(7) | Yes | Up to $1,000 per day |
| Failure to Take Reasonable and Necessary Action: Failure to Maintain a Temporary Certificate of Occupancy for the Residential Portion of the Building | 29 RCNY § 2-01.1(b)(6)(iv), (b)(7) | Yes | Up to $1,000 per day |
| Failure to Take Reasonable and Necessary Action: Failure to File Monthly Reports | 29 RCNY § 2-01.1(a)(1)(ii)(D) | Yes | Up to $1,000 per missing report |
| Failure to Take Reasonable and Necessary Action: Filing False Statements in Monthly Report | 29 RCNY § 2-01.1(a)(1)(ii)(E) | No | $4,000 per false statement |
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(6) Fines in Connection with:
(i) An owner who fails to comply with the access notice provision of 29 RCNY § 2-01(g)(4)(iv);
(ii) An occupant who unreasonably withholds access pursuant to 29 RCNY § 2-01(g)(4)(iv);
(iii) An owner who fails to file a Sales Record form after a sale of improvements pursuant to 29 RCNY § 2-07(j) or a sale of rights pursuant to 29 RCNY §§ 2-10(b) or (c)(4) within 30 days of sale;
(iv) An owner who fails to report a change in the emergency number, managing agent information, owner’s address or ownership information pursuant to 29 RCNY § 2-05(b)(10); or
(v) An owner who fails to post the IMD notice pursuant to 29 RCNY § 2-05(b)(13), May be subject to a Class A civil penalty as follows:
| VIOLATION DESCRIPTION | SECTION OF LAW | CURE within 30 days | PENALTY |
|---|---|---|---|
| Failure to Comply with Access Notice Provisions | 29 RCNY §§ 2-01(g)(1), (g)(2), (g)(4)(iv) | Yes | $1,000 |
| Occupant Unreasonably Withholds Access | 29 RCNY § 2-01(g)(4)(iv) | Yes | $1,000 |
| Failure to Timely File Sale of Improvements Form | 29 RCNY § 2-07(j) | No | $4,000 |
| Failure to Timely File Sale of Rights Form | 29 RCNY § 2-10(b), (c)(4) | No | $4,000 |
| Failure to Report a Change in Ownership Information | 29 RCNY § 2-05(b)(10) | No | $4,000 |
| Failure to Post IMD Notice | 29 RCNY § 2-05(b)(13) | No | $1,000 |
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§ 2-12 MDL § 286(2)(ii) Rent Adjustments.
(a) Definitions.
“Alteration application” means, for the purposes of these Rules, the work application form submitted for filing to the Department of Buildings of the City of New York (“DOB”), which describes the work to be undertaken that will result in obtaining a final certificate of occupancy for an interim multiple dwelling (“IMD”) unit, as defined in MDL § 281 for residential use or joint living-work quarters for artists usage and these rules.
“Alteration permit” means a building permit issued by the DOB authorizing the owner to make the alterations set forth in the approved alteration application which are necessary to obtain a residential certificate of occupancy for an IMD unit.
“Article 7-B compliance” means compliance with the fire protection and safety standards of Article 7-B of the MDL, or alternative building codes as authorized by MDL § 287. Article 7-B compliance must be evidenced by:
(i) DOB’s issuance of a temporary residential certificate of occupancy;
(ii) DOB’s issuance of a final residential certificate of occupancy after June 21, 1992;
(iii) DOB records demonstrating that the alterations necessary for issuance of a residential certificate of occupancy have been completed; or
(iv) The filing with the Loft Board of a sworn statement by a registered architect or professional engineer licensed in the State of New York stating that the IMD has achieved Article 7-B compliance and the date of such compliance on the Loft Board approved form.
“Maximum permissible rent,” or “maximum rent permissible,” for purposes of this rule, means “total rent” plus any permissible rent adjustments, as provided in 29 RCNY § 2-06 for units subject to Article 7-C pursuant to § 281(1), or 29 RCNY § 2-06.1 for units subject to Article 7-C pursuant to § 281(4). For units subject to Article 7-C pursuant to § 281(5), “maximum permissible rent” is defined in 29 RCNY § 2-06.2. If one or more rent adjustments pursuant to this section have already been applied, “maximum permissible rent” includes such adjustments.
(1) The residential unit for which the rent adjustment is sought is covered under Article 7-C of the MDL;
(2) The IMD building in which the covered residential unit is located is registered with the Loft Board;
(3) A final certificate of occupancy permitting residential occupancy of the covered unit was not issued on or before June 21, 1992;
(4) The residential unit was not rented at market value between June 21, 1982 and June 21, 1992, unless the IMD unit is covered under Article 7-C pursuant to MDL § 281(5); and
(5) The owner meets or has already met 1 or more of the code compliance obligations in MDL § 284(1) which requires that the owner file an alteration application, obtain an approved alteration permit, and achieve Article 7-B compliance. An eligible owner is entitled to 1 or more of the applicable rent adjustments in subdivisions (c) through (e) of 29 RCNY § 2-12.
(1) Filing prior to June 21, 1992. An owner who otherwise meets the eligibility requirements of 29 RCNY § 2-12(b) and who filed an alteration application with the DOB prior to June 21, 1992 is entitled to a six percent (6%) increase over the maximum rent permissible under Loft Board rules for the covered residential unit on June 21, 1992.
(2) Filing on or after June 21, 1992. An owner who otherwise meets the eligibility requirements of 29 RCNY § 2-12(b and who files an alteration application with the DOB on or after June 21, 1992 is entitled to an increase over the maximum rent permissible as provided in MDL § 286(2)(ii)(A) for the covered residential unit on the date the alteration application is filed.
(1) Issuance prior to June 21, 1992. An owner who otherwise meets the eligibility requirements of 29 RCNY § 2-12(b) and who obtained an alteration permit prior to June 21, 1992 is entitled to a fourteen percent (14%) increase over the maximum rent permissible under Loft Board rules for the covered residential unit on June 21, 1992.
(2) Issuance on or after June 21, 1992. An owner who otherwise meets the eligibility requirements of 29 RCNY § 2-12(b) and who obtains an alteration permit from the DOB on or after June 21, 1992 is entitled to an increase over the maximum rent permissible as provided in MDL § 286(2)(ii)(B) for the covered residential unit on the date the alteration permit is issued by the DOB.
(1) Compliance prior to June 21, 1992. An owner who otherwise meets the eligibility requirements of 29 RCNY § 2-12(b) and who achieved Article 7-B compliance prior to June 21, 1992 is entitled to a twenty percent (20%) increase over the maximum rent permissible under Loft Board rules for a covered residential unit on June 21, 1992.
(2) Compliance on or after June 21, 1992. An owner who otherwise meets the eligibility requirements of 29 RCNY § 2-12(b) and who achieves Article 7-B compliance on or after June 21, 1992 is entitled to an increase over the maximum rent permissible as provided in MDL § 286(2)(ii)(C) for the covered residential unit on the date Article 7-B compliance is achieved.
(i) the month immediately after the month the alteration application is filed, the alteration permit is obtained or Article 7-B compliance is achieved, or
(ii) on July 1, 1992, whichever is later.
(1) Rent adjustments pursuant to this section will be applied in addition to any rent increases which an owner is entitled to pursuant to 29 RCNY §§ 2-06, 2-06.1, 2-06.2, or the Loft Board rules related to setting the initial legal regulated rent.
(2) Any allowable rent adjustments pursuant to this section will be included in the calculation of the initial legal regulated rent.
(3) Rent adjustments pursuant to this section shall be effective upon filing an alteration application, obtaining an alteration permit or Article 7-B compliance regardless of the subsequent expiration of said alteration application, alteration permit or temporary certificate of occupancy, or the filing of a further qualifying alteration application for the building. If the Loft Board or a court of competent jurisdiction determines the sworn statement of Article 7-B compliance was erroneous, all rent increases based on such statement shall be nullified.
APPENDIX A
APPENDIX B
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