On February 15, 2022, the NYS Court of Appeals, the state’s highest Court, issued its decision in favor of owners in the case argued by KMWB Partner Joseph Goldsmith last month.
The Court found and held illegal loft conversions are not covered under Rent Stabilization Law.
The Court of Appeals held that units covered by the Loft Law, exempted from that statute’s Rent Stabilization regime by operation of a sale of a prior tenant’s rights and improvements, is not subject to Rent Stabilization Law and continues to be exempt even when rented to a subsequent tenant.
The importance cannot be overstated. Loft owners, tenants, purchasers, and lenders have been plagued by uncertainty over this issue for more than 15 years.
This decision finally resolves these issues in owners’ favor of loft building owners and provides certainty to Loft Law buyouts as deregulatory events, regardless of the number of units in the building or the zoning.
It is a testament to the Court of Appeal Court’s willingness and ability to understand and resolve complex Loft Law and Rent Stabilization issues rationally and fairly.
KMWB endeavors to continue to be at the forefront of these fraught and challenging issues of rent regulation and fighting on behalf of the New York real estate community. If you have any questions, please do not hesitate to contact Joseph Goldsmith at 212-869-5030.