4688 TENANTS of 79 LORIMER STREET ORDER Docket No. TR

Loft Board Order No.: 4688 TENANTS OF 79 LORIMER STREET Docket No. TR-1273

RE: 79 Lorimer Street Brooklyn, New York

IMD No.: None

ORDER

The New York City Loft Board ("Loft Board") accepts in part and rejects in part the Report and Recommendation of Administrative Law Judge Astrid B. Gloade dated March 23, 2017 ("Report").

BACKGROUNp

On November 7,2014, the New York City Department of Buildings ("DOB") issued a vacate order for 79 Lorimer Street, Brooklyn, New York ("Building"). That order remains in effect.

On August 4, 2015, the following tenants (collectively "Applicants") filed an application seeking Article 7-C coverage for their respective units ("Units") and protected occupant status pursuant to § 281(5) of the Multiple Dwelling Law ("MDL"):

Applicant Unit Aaron Scaturro, Toshio Masuda, Bryce Hackford and Travis McDemus Second floor Shad rack Lindo and Katherine Carothers 4B on the Fourth floor Arthur Purvis, Josh Steinbauer, and Peter Pearson Sixth floor

The Loft Board transferred the application to the Office of Administrative Trial and Hearings ("OATH"), which assigned the matter to Administrative Law Judge Astrid B. Gloade for adjudication.

On February 12, 2016, FJH Realty, Inc. ("Owner"), owner of the Building, filed an answer. Prior to the commencement of the hearing, Applicants and Owner stipulated that the Units and the Building met most of the eligibility and other relevant facts. SpeCifically,

• The Units are at least 400 sq. ft. in size and have an entrance that does not require passage through another residential unit; • The Units are not located in a basement or cellar; • Each unit contains at least one window that opens onto a street or a lawful yard or court; • The Building was formerly used for commercial or manufacturing purposes; • The Building lacked a certificate of occupancy pursuant to MDL § 301; • Applicants Scaturro, Purvis, and Lindo are the prime lessees ofthe second and sixth floor units and unit 4B, on the fourth floor, respectively; and • Applicant McDemus did not occupy the second floor unit prior to the effective date of the law.

In Owner's Post Trial-Memorandum of Law, dated Decem ber 2, 2016, Owner further conceded that the Units were residentially occupied for twelve (12) consecutive months, between January 1, 2008 and December 31,2009 ("Window Period"), and that prime lessees Scaturro, Lindo and Purvis resided, primarily, in the Units; In the Report, Judge Gloade recommended that the Loft Board find: 1) the Building is an interim multiple dwelling ("IMD") pursuant to MDL § 281 (5) and the second and sixth floor units and unit 4B, on the fourth floor, are IMD units; 2) Aaron Scaturro, Toshio Masuda, Bryce Hackford, Shadrack Lindo, Katherine Carothers, Arthur Purvis, Josh Steinbauer, and Peter Pearson are all protected occupants of their respective units; and 3) Travis McDemus is not a protected occupant of the second floor unit.

Based on the extensive testimonial and documentary evidence in the record, along with Owner's concession of residential occupancy during the Window Period, we accept Judge Gloade's finding that the Building is an IMD with one unit on the second and sixth floors and unit 4B on the fourth floor.

The Loft Board further accepts the finding that Applicant McDemus is not a protected occupant, but rejects Judge Gloade's reasoning. We also reject the recommendation that the non-prime lessees: Masuda, Hackford, Carothers, Steinbauer, and Pearson are protected occupants.

ANALYSIS

As noted above, the parties stipulated to most of the eligibility and residency requirements and that Applicants Scaturro, Purvis, and Lindo are the only prime lessees for their respective units. The only issue before the Board is which applicants are entitled to Article 7 -C protection, namely, whether non prime lessees can be protected occupants when prime lessees occupy IMD units as their primary residences.

Background

The coverage of a unit and the protection of the occupants in that unit are two separate areas of the law governed by different sections of the Loft Law and the Loft Board's rules. In 2010, the New York State Legislature amended the Loft Law to add MDL § 281 (5) which established a new window period for coverage. The Legislature also added MDL § 282-a, a deadline for applications for units and buildings seeking Article 7-C coverage. The original deadline was March 11, 2014.

Prior to the 2010 amendment, the Board's decisions on the rights of occupants to Article 7-C protection were tangential to coverage determinations of units. Essentially, when the Board found a unit covered under Article 7-C, it also found, usually summarily, that the residential occupants were entitled to Article 7-C protection. Decisions often contained little to no independent analysis of the applicable rule for protected occupant claims found in Title 29 of the Rules of the City of New York ("29 RCNY") § 2- 09(b). See, Matter of Popa, Loft Board Order No. 1586 (Sep. 13, 1994), Matter of Lagmon, Loft Board Order No. 2473 (Feb. 1, 2000), and Matter of VanDerbeek, Loft Board Order No. 2717 (Mar. 27, 2002).

In both Matter of VanDerbeek, and Matter of Lagmon, the Board considered the fact that the prime lessee and the other occupant seeking protection were life partners and ultimately a family, to determ ine protected occupancy. The use of fam ilial relationships to determ ine Article 7-C protection, was not based on any part of Article 7-C or the Loft Board's rules. To the contrary, the plain language of § 2-09 precludes awarding non-prime lessees, including family members, protected occupant status if the prime lessee is seeking protection and uses the unit as his or her primary residence.

After the 2010 amendment, the Loft Board made changes in its administrative processes and in its quasi-judicial functions because the statutory deadline for coverage and registration applications did not apply to determinations for protected occupancy. To avoid restricting the rights of occupants seeking protection, the Loft Board staff administratively created a separate protected occupant claim by adding it to the General Application form, while the claim for coverage remained as a separate application. In addition, the Board began to include more detailed analyses of the protected occupancy issue in its decisions. The Board adopted a more disciplined approach, adhering to the plain language of 29 RCNY § 2-09(b). This change in the Board's approach was the catalyst for a divide between interpretations of § 2-09(b) by the Loft Board and OATH.

2 The Loft Board Position

MDL § 286(2) provides that "residential occupants qualified for protection ... shall be entitled to continued occupancy provided that the unit is their primary residence ... " The Loft Board's interpretation of § 2-09, is consistent with the language of the law and is within the Loft Board's powers under Article 7- C.

When the Loft Board makes determinations of protected occupancy, it considers all provisions of 29 RCNY § 2-09(b). See, Matter of Migno/a, Loft Board Order No. 4509 (Apr. 21,2016). Section 2- 09{b)(1) states, "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" [emphasis added]. Based on this language, before the Board can make a determination under § 2-09(b}(1), the Board must first consider the rule as a whole, including the provisions in (b)(2), (b)(3) and (b)(4).

Furthermore, since the 2010 amendment, the Board has consistently applied § 2-09 when distinguishing the analysis for coverage from the analysis for protected occupancy. The Board has issued multiple congruent determinations where it applied a primary residence analysis for a prime lessee seeking protected occupant status, establishing primary residency as a prerequisite for protected occupancy. See, MatterofPak, Loft Board Order No. 4334 (Nov. 20, 2014), Matter of Gallo, Loft Board Order No. 4349 (Jan. 15, 2015), Matter of Schuss, Loft Board Order No. 4393 (May 21, 2015), Matter of Marriner-Smith, Loft Board Order No. 4426 (Sept. 17, 2015) and Matter of Mignola, Loft Board Order No. 4509 (Apr. 21, 2016).

Pursuant to 29 RCNY § 2-09{b){4), the prime lessee is deemed the residential occupant entitled to protection under Article 7-C if the prime lessee can prove that the residential unit covered as part of an IMD is his or her primary residence. Thus, where there is a prime lessee using the unit as a primary residence, that prime lessee is the protected occupant to the exclusion of all other occupants in the same unit. See, Various Tenants of 357 Bowery, Loft Board Order No. 4350 (Jan. 15, 2015). Consequently, when a prime lessee seeks Article 7-C protection, § 2-09(b) requires a protected occupant determination for the prime lessee first, before determining whether a non-prime lessee is the protected occupant.

The OATH Position

In general, Judge Gloade, in representing the OATH position, holds that the Loft Board's current interpretation of § 2-09 restricts the scope of protection and runs afoul to the remedial purpose of the Loft Law. Furthermore, although Judge Gloade concedes primary residence is not at issue in this case, she questions whether primary residence analyses are required for protected occupant claims, stating that, "[ ... ] The Board's interpretation of section 2-09(b)(4) imposes the more stringent requirement of proving primary residence on prime lessees than on tenants who have never had leases, and is inconsistent with the Loft Law, case law, and the Board's own rules." See, Report at 8. Judge Gloade also claims that the Loft Board's recent decisions are contrary to holdings in prior cases where the Loft Board applied § 2- 09{b)(4) only when a prime lessee who was out of possession sought to recover possession of that unit from a current occupant.

In support of her position that the Loft Board's current interpretation of § 2-09 restricts the scope of protection, Judge Gloade relies on cases that do not address the issue of whether prime lessees and non-prime lessees can both be protected occupants when a prime lessee claims protected occupant status and uses the IMDunit as his or her primary residence. See, Ass'n of Commercial Property Owners, Inc. v. New York City Loft Bd., 118 A.D.2d 312, 318 (1st Dep't 1986), aff'd 71 N.Y.2d 915 (1988), Matter of Wayman, Loft Board Order No. 4170 (Sept. 19, 2013), Matter of Gurkin, Loft Board Order No. 4186 (Oct. 17, 2013). In Ass'n of Commercial Property Owners, Inc., the court made a finding about a Loft Board's coverage regulation and not a protected occupant issue. In Matter of Wayman, although a prime lessee and a non-prime lessee both claimed to be protected occupants, the Board held that the tenancy of the prime lessee, who was a part owner, was illusory. There was no prime lessee using the unit as a primary residence. Therefore, the Board applied § 2-09{b){1) and deemed the occupant of the unit the protected occupant. Finally, Judge Gloade's reliance in Matter of Gurkin, is misplaced. Judge

3 Gloade contends that Matter of Gurkin, demonstrates the Loft Law was meant to be liberally construed in favor of coverage. However, the current issue before the Loft Board is one of protection and not coverage. In fact, the analysis of protected occupancy in Matter of Gurkin, follows the application of § 2- 09 the Board has adopted since the 2010 amendment. There, the in-possession sub-lessee, applied for both coverage and protection. The Loft Board deemed the sub-lessee the protected occupant under § 2- 09 (b)(1) because the prime lessee did not use the unit as his or her primary residence. Hence, these cases are not applicable to the current issue nor do they help support Judge Gloade's argument that the Board's recent decisions have restricted protection.

With respect to the other cases Judge Gloade relies on, as noted the above, the Board recognizes that prior to the 2010 amendment, there was no clear analysis of protected occupancy status when prime lessees and non-prime lessees both sought Article 7-C protection. Therefore, after the amendment, the Board adopted a new analytical framework that accurately and consistently applies § 2- 09.

1. Prime Lessees Scarturro, Lindo and Purvis are Protected Occupants

The Board disagrees with Judge Gloade's statement that nothing in the language of the Loft Board's rules and the MDL advances the notion that § 2-09(b)(4) "overrides or conflicts with § 2-09(b)(1), (2), or (3)." Judge Gloade's interpretation of § 2-09(b)(4), when read in the context of the entire rule, fails to recognize that the language of § 2-09(b)(1) begins with the word "Except." The introductory language of § 2-09(b)( 1) establishes it as a provision of last resort, applicable only when subsections (2), (3) and (4) do not apply.

Applicants argue that § 2-09(b)(4) applies only if a prime lessee is not in possession. See, Petitioner-Applicants' Post-Trial Memorandum at 54-55. However, Applicants' argument misinterprets the language of the rule. Section 2-09(b)(4) provides that a prime lessee who can prove the IMD unit is his or her primary residence is deemed the protected occupant, "even if another person is in possession" [emphasis added]. The purpose of the clause is not meant to be restrictive as Applicants contend, but is applicable to prime lessees who are both in and out of possession of the residential unit.

As all parties agree, Scaturro, Lindo, and Purvis proved that they occupied their respective units as their primary residences, the Loft Board accepts Judge Gloade's recommendation and holds that they are the protected occupants of their units.

2. Non-Prime Lessees are Ineligible for Protection When Prime Lessees Use the IMD Units as Their Primary Residence

Even though the non-prime lessees, with the exception of Applicant McDemus, moved into their respective units prior to the effective date of the law, where a prime lessee asserts a claim for protected occupancy and uses the unit as his or her primary residence, non-prime lessees are not entitled to protection. To conclude otherwise, would be to ignore the plain language of 2-09(b)(4). The Loft Board, which is tasked with interpreting and applying its own rules, must conduct its protected occupant determinations in light of the existing provisions of § 2-09.

There is no question of fact as to which applicants are the prime lessees, disqualifying the non prime lessees from protected occupant status. As to the non-prime lessees, Masuda, Hackford, Carothers, Steinbauer, and Pearson the Loft Board reject's Judge Gloade's recommendation and finds that they are not protected occupants under § 2-09(b).

3. Non-Prime Lessee McDemus Is Not a Protected Occupant

The Loft Board accepts Judge Gloade's recommendation that Applicant McDemus is not a protected occupant, but rejects the Owner's consent analysis under § 2-09(b)(3)(i). Applicant Scaturro is the prime lessee and the protected occupant of second floor unit, thus disqualifying Applicant McDemus from protected occupant status under § 2-09(b).

4 CONCLUSION

We note that in support of her position that primary residence should not be required for protected occupants, Judge Gloade cites to other OATH reports and recommendations which the Loft Board has not considered. The Board cautions that until the Loft Board considers an OATH report and recommendation, it has no precedential value.

The Loft Board finds the Building to be an IMD pursuant to MOL § 281 (5), containing three covered units, one on each of the second and sixth floors and unit 4B, on the fourth floor. Prime lessees Aaron Scaturro, Shad rack Lindo and Arthur Purvis are the protected occupants of the Units.

The Loft Board hereby directs Owner to register the Units with the Board within 30 days of the mailing date of this Order. If Owner fails to register and pay the applicable fees within 30 days of the mailing date of this Order, the Loft Board directs the staff to:

• Issue an IMD registration num ber for the Building; • List the Units as IMD units and tenants Scaturro, Lindo and Purvis as the protected occupants of their respective Units; and • Collect applicable registration fees and late fees, if any.

DATED: September 21, 2017

Renaldo HYlton Chairperson

Board Members Concurring: Carver, Barowitz, Roche, Hernandez, Hylton

Board Members Dissenting: De Laney

Board Members Absent: Schachter, Shelton

DATE LOFT BOARD ORDER MAILED: OCT 0 4 2017

5 ,--.... , -' (J,"" , NYC JEI"AftTM ... Wr'C L$~~T.tl~1I.'ING"S - _._.101} APR 12 P 2- Matter of Tenants of 79 Lorimer Street . 5 '-I OATH Index No. 1020116.(Mar. 23, 2017) . RE eEl "l r;~ I" [Loft Bd Docket No. TR-1273; 79 Lonmer Street, Brooklyn, N.Y.] - ~:..~.

In a coverage proceeding, AU finds that the building located at 79 Lorimer Street, Brooklyn, New York, is an interim multiple dwelling and that the applicants' units are covered. ALJ recommended that the application .for protected occupancy be granted as to eight applicants who took possession of their respective units before the effective date of the Loft Law and are currently in constructive possession of their units. The application of the applicant who took possession of his unit after the effective date of the Loft Law and failed to establish that he took possession with the landlord's consent should be denied.

NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of TENANTS OF 79 LORIMER STREET Applicants

REPORT AND RECOMMENDATION

ASTRID B. GLOADE, Administrative Law Judge This is a tenant-initiated Loft Law coverage proceeding involving a building located at 79 Lorimer Street, Brooklyn, New York (the "Building"), pursuant to section 281(5) of Article 7-C of the Multiple Dwelling Law ("MDL" or "Loft Law") as amended on June 21, 2010 and on January 30, 2013, and title 29 of the Rules of the City of New York ("RCNY"). MDL § 281(5) (Lexis 2017); 29 RCNY §§ 2-08,2-09 (Lexis 2017). The applicants are Aaron Scaturro, -Toshio Masuda, Bryce Hackford, and Travis McDemus, occupants of the second floor unit; Shadrack Lindo and Katherine Carothers, occupants of unit 4B; and Arthur Purvis, Josh Steinbauer, and Peter Pearson; occupants of the sixth floor unit. The applicants seek a determination that the Building is an interim mUltiple dwelling ("IMD") under Article 7 -C of the Multiple Dwelling Law ("Loft Law"), their units are IMD units, and they are the protected occupants of their respective units. The application was served on affected parties on August 4, 2015, and the owner of the premises, FJH Realty, Inc., -2- filed an answer opposing the application on February 12, 2016, after this tribunal granted its application t9 vacate its default. A trial was conducted over the course of five days during which the parties presented voluminous documentary evidence and the testimony of 11 witnesses. Post-trial memoranda were filed on December 2, 2016. For the reasons below, I find that the Building is an IMD and the second and sixth floor units and unit 4B are covered. In addition, I find that Scaturro, Hackford, and Masuda are protected occupants of the second floor unit; Lindo and Carothers are protected occupants of unit 4B; and Purvis, Steinbauer, and Pearson are protected occupants of the sixth floor unit. However, McDemus is not a protected occupant of the second floor unit. .

ANALYSIS

The B~ildillg and Units are Eligible for Coverage To be covered by the Loft Law under section 281(5), a building must: (1) at any time have been occupied for manufacturing, commercial, or warehouse purposes; (2) lack a certificate of occupancy or of compliance permitting residential use on the qualifying unit on June 21, 2010; (3) not be owned by a municipality; and (4) have been occupied for residential purposes as the residence or home of three or more families living independently from one another for a period of 12 consecutive months during the period commencing January 1, 2008, and ending December 31, 2009 ("window period"). Moreover, the unit must (i) not be located in a basement or cellar; (ii) have at least one window opening onto a street or lawful yard or courtyard as defined in the zoning resolution for such municipality; (iii) have at least one entrance that does not require passage through another residential unit to obtain access to the unit; and (iv) be at least 400 square feet in area. MDL §§ 281(1), (5). The parties' stipulation of facts indicates that the Building was formerly used in whole or in part for commercial or manufacturing purposes and lacks a certificate of occupancy pursuant to MDL § 301 (AU Ex. 3; Respondent's Post-Trial Memorandum ("Resp. Mem.") at 2). Respondent, FJH Realty, Inc., conceded that the second floor unit, unit 4B (which respondent refers to as the fourth floor rear unit), and the sixth floor unit (collectively the - 3 -

"Units") were residentially converted and occupied for twelve consecutive months during the window period CRespo Mem. at 2). In addition, the parties stipulated that the Units are at least 400 square feet in area, have entrances that do not require passage through another residential unit, are not located in a basement or cellar, and satisfy the Loft Law's window requirements (AU Ex. 3; Resp. Mem. at 2). The Building was residentially occupied until November 2014, when the New York City Department of Buildings ("DOB") issued a vacate order for the premises, which remained in effect as ofthe hearing (Tr. 10-11). In sum, it is undisputed that the Building and the Units are eligible for coverage under the Loft Law.

Protected Occupants The parties stipulated that Scaturro is the prime tenant of the second floor unit, Lindo is the prime tenant of the fourth floor unit, and Purvis is the prime tenant of the sixth floor unit. It is further stipulated that the remaining applicants are not prime tenants of their units (AU Ex. 3). The applicants contend that they are protected occupants of their respective units pursuant to sections 2-09(b)( 1) and (2) of the Loft Board rules, while McDemus is the protected occupant of his unit under section 2-09(b)(3) (Petitioners' Post-Trial Memorandum ("Pet. Mem.") at 43). In contrast, respondent contends that under section 2-09(b)(4) of the Board's rules, as prime lessees who are seeking protected occupant status and for whom their units are their primary residences, only Scaturro, Lindo, and Purvis are the 'protected occupants of their respective units. Respondent further argues that the non-prime lessees are precluded from being recognized as protected occupants of the same unit as the prime lessees and that McDemus is ineligible for protection under section 2-09(b)(3) (Resp. Mem. at 2, 4-11). Scaturro. Masuda, Hackford and McDemus (Second Floor Unit) The second floor unit is comprised of eight rooms, four of which the applicants use as bedrooms, a studio, and a kitchen/living room area (Pet. Ex. 3; Tr. 33-39). Scaturro moved into the unit in 2007 (Tr. 15-16). At that time, it was already outfitted for residential use, including a bathroom, kitchen, and several bedrooms (Tr. 17). Scaturro entered into a rental agreement with the prime tenant at'the time, Ms. Mills, who subsequently vacated the unit. Scaturro and a fellow -4- occupant of the unit, Me. Marmello, then entered into a lease agreement with respondent for the period October 2007 to September 2008 (Tr. 18-19; Pet. Ex. 1). When Marmello left the Building at the end of the lease term, Scaturro and respondent entered into a two-year renewal lease commencing in October 2008 (Pet. Ex. 2; Tr. 24-28). Scaturro resided in the unit with other occupants until DOB issued a vacate order for the premises in November 2014 (Tr. 15). Hackford moved into the second floor unit in May 2008, pursuant to a verbal rental agreement with Scaturro. When he moved into the unit, he brought his personal possessions, including furniture and clothing. He occupied a bedroom in the unit and used the kitchen, living room, and bathroom (Tr. 527-30). Hackford paid rent to Scaturro, except in January·20Il, when he sent a rent check directly to respondent (Tr. 540-41; Pet. Ex. 112). The applicants' documentary evidence, including New York State-issued identification, utility bills, bank and financial statements, establish- that Hackford has used the unit as his home address since 2008 (Pet. Exs. 113-114, 120-130). The uncontested evidence, including voluminous documentary evidence, establishes that Hackford resided in the unit from May 2008 until November 2014, when a vacate order was issued for the Building (Tr. 527; Pet. Exs. 113-46). Similarly, the uncontested evidence establishes that Masuda resided in the second floor unit continuously from 2008 until the vacate order was issued. Masuda moved into the second floor unit at the Building with his personal possessions in November 2008. He paid rent to Scaturro, whom he described as his roommate. Documentary evidence establishes that Masuda has held the unit out as his address and received mail at the Building, including a document he submitted to the United States Department of Justice, an April 2009 enrollment agreement and receipt for classes, and e-mail receipts for purchases that reflect the Building and unit as his delivery a~dress (Tr. 709-21; Pet. Exs. 161-69). McDemus moved into the unit in July 2012, and resided there until ordered to vacate the premises in November 2014 (Tr. 464). He paid rent to Scaturro, except on one occasion in October 2013, when he wrote a check to respondent for his portion of the rent (Tr. 475-76; Pet. Ex. 91). The undisputed evidence, including New York State income tax returns for 2012 through 2014, 1099 income tax forms for 2013 through 2015, and documents mailed to McDemus by medical care and insurance providers in 2014 and 2015, supports the applicants' - 5 - contention that McDemus residentially occupied the unit from July 2012 until ordered to vacate the premises in November 2014 (Tr. 464; Pet. Exs. 93-111). Scaturro, Hackford, Masuda, and McDemus intend to reside in their unit after the DaB vacate order is lifted (Scaturro: Tr. 76; Hackford: Tr. 527; Masuda: Tr. 708); McDemus: Tr. 464). Lindo and Carothers (Unit 4B) Unit 4B is comprised of five bedrooms, a bathroom, and a common area that consists of a living room and kitchen (Pet. Ex. 39). Lindo moved into the unit in 2006 pursuant to a written lease with respondent that was also signed by Lindo'sroommate, Mr. O'Brien, who moved out of the unit sometime prior to 2008 (Tr. 241,251, 291). After Carothers and Lindo began dating in 2008 or 2009, she spent significant time in the unit, and eventually began to reside there in early 2010 (Tr. 754-57, 769). Carothers' income tax returns for 2012 and 2013 demonstrate that she listed the unit as her horne address (Pet. Exs. 172, 173). Lindo and Carothers resided in the unit until November 2014, when DOB issued a vacate order for the Building (Lindo: Tr. 238; Carothers.: Tr. 753-54). They intend to reside in the unit after the vacate order is lifted (Lindo: Tr. 238; Carothers: Tr. 754). It is undisputed that Carothers began to reside in the unit in early 2010. Respondent maintains, however, that as a non-prime lessee who took possession before June 21, 2010, Carothers is precluded from being recognized as a protected occupant of the unit because Lindo is seeking protected occupant status for the same unit. Purvis. Steinbauer. and Pearson (Sixth Floor Unit) The sixth floor unit is comprised of several rooms, including the applicants' bedrooms, a recording studio, bathroom, and an open kitchen/living room area (Pet Ex. 19; Tr. 141-47). Purvis moved into the unit in 2002 pursuant to a written lease and resided there until the Building was vacated pursuant to a DOB order (Tr. 128; Pet. Ex. 16). Respondent concedes that Purvis is the prime lessee and is entitled to protected occupant status (Resp. Mem. at 2, 5-6). As with the other non-prime lessee applicants, respondent contends that Steinbauer and Pearson are ineligible for protected occupant status because Purvis, prime lessee of the unit, is seeking protection under the Loft Law. - 6 -

Steinbauer testified that he moved into the sixth floor unit in March 2006 and produced documentary evidence, such as income tax returns and bank statements, which establish that he held the unit out as his residence and received mail there between 2006 and 2014 (Tr. 339; Pet. Exs. 60-90). Similarly, the uncontested testimonial and documentary evidence, including income tax returns and financial statements, estahHshes that Pearson moved into the unit in April 2008 and resided there until DOB issued the vacate order (Tr. 637-38; Pet. Exs. 148-51, 157-60). Both paid rent directly to respondent on several occasions (Steinbauer: Tr. 387; Pearson: Tr. 649; Pet. Exs. 61, 148). Although forced to vacate the Building in November 2014, Steinbauer and Pearson intend to reside at the Building after the vacate order is lifted (Steinbauer: Tr. 339; Pearson: Tf. 638). OCCU pclDts Qualified for Protection Section 2-09(b)(1) of the Board's rules provides that "[e)xcept 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 !MD." 29 RCNY § 2':09(b)(1). The Board's rules further provide that where the residential occupant in possession is not the prime lessee, I the lack of consent of the landlord to a sublet, assignment or subdivision establishing stich 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: ... (iii) June 21,2010, for an IMD unit covered by MDL § 281(5) .. .

29 RCNY § 2-09(b)(2). The applicants contend that all of them except McDemus qualify for protected occupant status pursuant to these provisions because they are currently in possession of the unit and they were in possession on or before June '21,2010 (Pet. Mem. at 43). Under the longstanding interpretation of sections 2-09(b)(1) and (2) of the Board's rules, all the applicants except for McDemus are protected occupants of their respective units because they are current occupants in possession and they took possession of their units prior to June 21, 2010. See 345 Eight Ave. Assots. v. NYC Loft Bd., 232 A.D.2d 153, 154 (lst Dep't 1996) ("2-

I A "prime lessee" is "the party with whom the landlord entered into a lease or rental agreement for use and occupancy of a po~tion of an IMD. which is being used residentially, regardless of whether the lessee is currently in occupancy or whether the lease remains in effecl." 29 RCNY § 2-09(a). -7~

09(b)(2) provides coverage for a residential occupant in possession of a covered residential unit, even if the occupant is not a prime tenant and even if the landlord did not consent to a sublet, assignment or subdivision, as long as the occupant was in possession [on the effective date of the Loft Law],,); Kam v. Batista, 131 Misc. 2d 196,200 (Sup. Ct. N.Y. Co.), aft'd, 123 A.D.2d 526 (1st Dep't 1986) ("The Loft Law was designed to protect all residential occupants whether or not they are in privity of contract with the landlord."); Matter of Various Tenants of 85 North 6th Street, OATH Index Nos. 1122/14, 989/15, 990/15 at 10 (Nov. 12, 2015) (prime lessee and her non-prime lessee spouse are protected occupants); Matter of Vall Derbeek, OATH Index No. 1972/01 (Feb. 13, 2002), adopted, Loft Bd. Order No. 2717 (Mar. 14, 2002) (both a prime lessee and his life partner and roommate, who was not on the lease and submitted no proof as to a rental agreement, held to be protected occupants); Matter of Lagmoll, OATH Index No. 539/00 (Dec. 8, 1999), adopted, Loft Bd. Order No. 2473 (Jan. 25, 2000) (long-term partner of prime lessee who was not on the lease held to be a protected occupant). Respondent concedes that Scaturro, Lindo, and Purvis are the protected occupants of their respective units, but maintains that they are protected by operation of section 2-09(b)(4) of the Board's rules, which provides: 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 ex tinguished.

29 RCNY § 2-09(b)(4) (Resp. Mem. at 2). Respondent contends that under 2-09(b)(4), the prime lessees qualify for coverage to the exclusion of the non-prime lessee applicants if the prime lessees can establish that the covered units are their primary residence (Resp. Mem. at 4-6). The evidence establishes and respondent does not dispute that the respective units are Scaturro, Lindo, and Purvis' primary residences CRespo Mem. at 2, 5-6). Although the Building was subject to a DOB vacate order-in November 2014, Scaturro, Lindo, and Purvis resided in their respective units before the order was issued (Scaturro: Tr. 15, 76: Lindo: Tr. 238; Purvis: - 8 -

Tr. 128). They are thus in "constructive possession" of their respective units. See Matter of Stone, Loft Board Order No. 4522 at 3 (May 19,2016) ("[w]here a residential occupant is legally prohibited from occupying his unit because of a vacate order, but was in possession at the time of the vacate order, the occupant is deemed to be in constructive possession for protected occupant determinations."). Although the issue of primary residence is not in dispute, it should be noted that this tribunal has expressed concern about the Board's recently articulated interpretation of its protected occupancy rules to require a prime lessee to prove that the subject unit is his or her primary residence. In several recent decisions, this tribunal has commented that the Board's interpretation of section 2-09(b)( 4) imposes the more stringent requirement of proving primary residence on prime lessees than on tenants who have never had leases, and is inconsistent with the Loft Law, case law, and the Board's own rules. See Matter of Allweis, OATH Index No, 2569/14 at 23-29 (Jan. 18, 2017); Matter of Tenants of 58 Grand Street, OATH Index No. 212115 at 26-31 (June 24, 2016); Matter of Saladino, OATH Index Nos. 2412/13 & 1879114 at 61 (May 20, 2016). These decisions thoroughly and cogently summarize the concerns raised by the Board's new interpretation of its rules, making it unnecessary to do so here. Respondent maintains that where a prime lessee qualifies for protection, non-prime lessees become ineligible for protected occupant status with respect to the same unit. This argument is premised on the Board's recent determination that sections 2-09(b)(1) and (2) are applicable to protected occupant status only when there is no prime lessee or sublessor seeking protected occupant status and the applicant was in possession of the unit before the effective date of the Loft Law. Application of section 2-09(b)(4) is required, according the Board, whenever the prime lessee seeks Loft Law coverage. See Matter of Mignola, Loft Bd. Order No. 4509 at 5 (Apr. 21, 2016) ("Where there is no prime lessee, § 2-09(b)(1) through (b )(3) determine eligibility for protected occupant status ... [h]owever, where there is a prime lessee, § 2-09(b)(4) governs."); Stone, Loft Bd. Order No. 4522 at 1-2 (when determining protected occupant status, subsection 2-09(b)(l) is considered only after the Board considers whether the other provisions of 2-09(b) apply). The instant case involves multiple occupants, including a prime lessee, who have asserted that they are the protected occupants of the same unit. In recent cases involving similar circumstances, the Board has held that where a prime lessee and a non-prime lessee who occupy the same unit seek protected occupant status, only the prime lessee who qualifies under section 2-09(b)(4) is entitled to protection. Thus, the prime lessee's claim to protected occupancy under section 2-09(b)(4) is superior to and incompatible with that of a non-prime lessee who satisfies sections 2-09(b)(l) and (2). For example, in Matter oj Lopez, Loft Bd. Order No. 4533 at 5 (June 16, 2016), the Board rejected this tribunal's recommendation that a non-prime lessee who residentially occupied an I1v1D unit with the prime -lessee be recognized, along with the prime lessee, as a protected occupant of the unit they shared. In rejecting the recommendation, the Board held that where a prime lessee who is using the unit as his primary residence seeks protected occupant status and is recognized as such under section 2-09(b)(4), the non-prime lessee occupant of the same unit is not qualified for protection under sections 2-09(b)(I) and .(b)(2). Similarly, Mignoia, Loft Bd. Order No. 4509 at 5, involved applicants who resided with prime lessees as roommates or spouses. All the applicants took possession of their units prior to the effective date of the Loft Law. The Board held that where the pdme lessee seeks protected occupancy status, he or she "is deemed to be the residential occupant qualified for protection under Article 7-C, if the prime lessee 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." [d. at 5. As a result, any non-prime lessee, even one who occupied the unit before the effective date of the Loft Law, is not a protected occupant where there is a prime lessee who qualifies for coverage. See Matter-oj Various Tenants oj 357 Bowery, Loft Bd. Order No. 4350 at 3 (Jan. 15, 2015) ("The mere fact that [the non-prime lessee] shared the unit with ... the prime lessee, on the effective date of the law does not automatically entitle her to protected occupant status."); Matter oj Behlke, Loft Bd. Order No. 4348 at 3 (Jan. 15, 2015) (noting that "the mere fact" that a prime lessee "had a. roommate on the effective date of the law does not automatically entitle the roommate to protected occupant status"). - 10-

Thus, the Board has effectively interpreted section 2-09(b)(4) to restrict protected occupancy status to the prime lessee when there are multiple claimants for protection, including non-prime lessees, who satisfy the requirements of rule 2-09(b)(l), (2), or (3). However, nothing in the language of the Board's rules suggests that section,2-09(b)(4) overrides or conflicts with 2-09(b)(I), (2), or (3). Nor is there anything in the MDL that compels such a result. Moreover, until the Board's recent, novel interpretation, section 2-09(b)(4) was applied as a mechanism for determining the right of a prime lessee who was out of possession of an IMD unit to recover possession of that unit from a current occupant. The provision expressly provides that a prime lessee must exercise his or her right to recover possession of the unit "in a court of competent jurisdiction." 29 RCNY § 2-09(b)(4); Bishar v. Dukas, 129 Misc.2d 652, 656 (Civ. Ct. N.Y. Co. June 24, 1985) (interpreting section 2-09(b)(4) as permitting a right to recovery by the prime lessee of existing IMD unit if the prime lessee can prove primary residency); Matter of Smulka, Loft Bd. Order No. 1914, at 15, 16 Loft Bd. Rptr. 100-106 (Feb. 29, 1996); ("The inte,nt of Section 2-09(b)(4) is to insulate an otherwise protected occupant from the deprivation of Loft Law protection because another person is actually in possession of the unit, as long as the unit in question is the protected occupant's primary residence."); Matter of Cunningham, Loft Bd. Order No. 442,4 Loft Bd. Rptr. 75, 76 (Sept. 25, 1986) (current occupants of IMD unit are qualified for Loft ,Law protection and prime tenant who wishes to recover possession of IMD unit may seek to do so in court pursuant to 2-09(b)(9)(4»; Matter of Jacobson, Loft Bd. Order No. 304, 3 Loft Bd. Rptr. 42, 43 (Sept. 26, 1985) (relying on 2-09(b)(4), the Board declined to determine claims of protected occupancy by prime lessee and a subtenant, stating that this issue "shall be more appropriately determined by a court of competent jurisdiction"); see also 58 Grand Street, OATH 212/15 at 30 ("[t]he Loft Board's interpretation of rule 2-09(b)(4) ... is contrary to past cases limiting this rule to instances where a prime lessee or sublessor is out of possession of a unit and seeks to recover the unit."). In Matter of Gallo, Loft Board Order No. 4349 (Jan. 15, 2015), the Board rejected this tribunal's finding that section 2-09(b)(4) is inapplicable to prime lessees who are in possession of their unit as it concerns the prime lessee's right to recover the unit when out of possession. In denying the tenant's reconsideration application, the Board stressed that section 2-09(b)(4) - 11 - states that the prime lessee who can prove that the unit is his or her primary residence is deemed the protected occupant "even if another person is in possession" instead of "only if another person is in possession." Matter of Marriner-Smith, Loft Board Order No. 4426 (Sept. 3, 2015), Rep. and Rec. at 3. In arriving at this interpretation, the Board relied on the language of the first sentence of the provision, but failed to consider section 2-09(b)(4) in its entirety. Review of all the subsections of 2-09(b)( 4) make it evident that the provision is intended to address the rights of a prime lessee who is out of possession to recover possession of an IMD unit. The language of Section 2-09(b)(4) evinces an overarching concern with the right "to recover the unit" and sets forth criteria for determining whether the out of possession prime lessor is entitled to do so in repeated references to that right. In interpreting 2-09(b)(4), the Board disregards the subsequent subsections, which amplify the out of possession prime lessee's right to recover possession of an IMD unit "in a court of competent jurisdiction." 29 RCNY §§ 2-09(b)(4)(i), (ii). Construed in its entirety, s~tion 2-09(b)(4) addresses the prime lessee's right to recover possession of an IMD unit by resort to a court of competent jurisdiction at the expiration of a sublease, if he or she can establish that the unit is his or her primary residence. Finally, the Board's restriction on the scope of the protections afforded by the Loft Law is antithetical to the remedial purpose of .the law. Indeed, in interpreting the Loft Law, the guiding principle has been to construe its provisions to expand coverage. See Ass 'n of Commercial Property Owners, Inc. v. NYC Loft Bd., 118 A.D.2d 312, 318 (1st Dep't 1986), aff'd, 71 N.Y.2d 915 (1988) ("Given the choice of two interpretations of the Loft Law, one restricting coverage and one broadening it, the remedial nature of the legislation forcefully argues for the adoption of the latter course .... To the extent the Loft Law is restricted in its coverage, the purpose of the law is defeated.") (citation omitted); Matter of Wyman, OATH Index No. 2653/11 at 5 (June 22, 2012), adopted, Loft Bd. Order No. 4170 (Sept. 19, 2013) ("The intent of the Loft Law is to spread its beneficial effects as widely as possible."); Matter of Gurkin, OATH Index No. 489112 at 21 (Dec. 14,2011), adopted, Loft Bd. Order No. 4186 (Oct. 17, 2013) (the "general intent of the Loft Law [is] to be liberally construed in favor of - 12-

coverage"). The Board's present interpretation of section 2-09(b) deprives occupants who would otherwise qualify under sections 2-09(b)(1), (2), and (3) of the benefits of Loft Law coverage. Under a construction that is consistent with the plain language of section 2-09(b) and the intent of the Loft Law, all of the applicants except McDemus should be recognized as protected occupants of the second floor unit pursuant to sections 2-09(b)(1) and (b)(2) of the Board's rules because they are current occupants in possession of their respective units and took possession before the effective date of the Loft Law. Applicants who took possession of their units before the June 21, 2010 effective date of the Loft Law are protected occupants under sections 2-09(b)(I) and (2), regardless of whether the owner consented to their occupancy. In contrast, McDem1Js, who moved into the second floor unit in July 2012, alleged that he is a protected occupant under section 2-09(b)(3)(i) of the Board's rules, which provides, in relevant part, When a residential occupant took possession of a residential unit covered as part of an IMD, on or after ... June 21, 2010, for an IMD covered by MDL § 281(5) ... such occupant is qualified for the protection of Article 7-C if: (i) The occupant is the prime lessee with a lease currently in effect or, if the occupant took possession of the IMD with the consent of the landlord, as a statutory tenant pursuant to Article 7 -C, without the issuance of a new lease ... .

29 RCNY § 2-09(b)(3). The applicants contend that McDemus took possession of the unit with respondent's consent because respondent accepted a rent payment from McDemus (Pet. Br. at 43). Respondent argues, however, that McDemus' single payment of his portion of the rent, made more than a year after McDemus took occupancy, is insufficient to establish that respondent consented to his subtenancy pursuant to 2-09(b)(3)(i) (Resp. Mem. at 7-11). Although "consent" is not defined in the Board's rules, in Matter of Fogel, Loft Bd. Order No. 3550 at 2 (Jan. 21, 2010), the Board identified factors that it has considered in determining whether an owner granted implied consent under section 2-09(b)(3). These factors are "whether: 1) an owner has accepted rent directly from the residential occupant; 2) the owner has started eviction proceedings against the residential occupant for failure to pay rent; and/or 3) - 13 - the owner has had direct contact with the tenant seeking Article 7-C protection about building issues." In Fogel, the Board found that the owner gave implied consent to the ~ccupant as a statutory tenant because the owner accepted the tenant's portion of the rent directly from the tenant for five years and had direct contact with the tenant regarding building issues. Id., at 3. See also Matter of 400 West 14th Street Tenants' Committee, Loft Bd. Order No. 1554, 14 Loft. Bd. Rptr. 332,348 (May 4, 1994) (consent established by' payment ofrent directly to the owner for three years, direct dealings with the owner regarding repairs, and appearance in litigation with other residential tenants of the building); Matter of Law, Loft Bd. Order No. 1319, 13 Loft. Bd. Rptr. 313A (Mar. 26, 1992) (owner's consent established by its written acknowledgement of applicant's tenancy and payment of rent directly to net lessee and owner for several years); Matter af Vigil, Loft Bd. Order No. 1312, 13 Loft Bd. Rptr. 279 (Feb. 27, 1992) (consent not established where applicant paid rent through prime lessee and had no direct dealings with owner, even though the owner knew of the occupancy); Matter of Blackman, Loft Bd. Order No. 1214, 13 Loft Bd. Rptr. 17, 19 (June 27, 1991) (owner's consent implied where the landlord accepted rent from tenant from 1987 to 1991 and directly corresponded with the tenant regarding rent payments). It is petitioners' burden to establish that they are entitled to the relief that they seek in their application by a preponderance of the credible evidence. 29 RCNY'§ 1-06(i)(4); Matter af Gatien, OATH Index No. 2121/13 at 9 (May 13,2016), 'adapted, Loft Bd. Order No. 4553 (Sept. 15,2016). McDemus failed to satisfy his burden. Scaturro testified that he typically received a rent invoice from respondent, collected rent from the occupants of the unit, and paid the total rent to respondent (Tr. 110-11, Pet. Ex. 10). However, in October 2013, McDemus wrote a check in the amount of $750 directly to respondent. McDemus could not recall whether he gave the check to Scaturro to be delivered to respondent or gave it directly to respondent's representatives (Pet. Ex. 91; Tr. 475-76, 514-15). The check itself is made payable to respondent, but there is no notation on the check, other than the number "2" above the "memo" line. An address other than the Building is listed under McDemus' name on the check (Pet. Ex. 91). - 14-

The Board has found that "knowledge on the part of the owner is not to be confused with consent to the creation of a statutory 'tenancy ... [t]he owner's knowledge of a subtenancy, standing alone, is not enough to constitute consent." Vigil, Loft Bd. Order No. 1312 at 282. Here, there is a paucity of evidence to establish that the owner consented to McDemus' occupancy of the unit as a statutory tenant. For example, the check did not list the Building as McDemus' address and there is no evidence that he delivered the check directly to respondent or had other direct dealings with respondent. At best, the evidence establishes that respondent was aware that McDemus paid a portion of the rent for the unit on one occasion. In sum, McDemus' single payment of a portion of the rent for the unit does not establish that respondent consented to a statutory tenancy as required by section 2-09(b)(3)(i). Accordingly, the applicants failed to establish that McDemus should be recognized as a protected occupant of the unit pursuant to Board rule section 2-09(b)(3).

FINDINGS AND CONCLUSIONS 1. The building located at 79 Lorimer Street, Brooklyn, New York, is an interim multiple dwelling under the Loft Law.

2. The second floor unit is a covered unit and Scaturro, Hackford, and Masuda are the protected occupants of the unit.

3. Applicants failed to establish that respondent consented to McDemus' occupation of the unit as a statutory tenant; therefore, McDemus, who moved into the unit after the effective date of the Loft Law, is not a protected occupant of the second floor unit.

4. Unit 4B is a covered unit and Lindo and Carothers are the protected occupants of the unit.

5. The sixth floor unit is a covered unit and Purvis, Steinbauer, and Pearson are the protected occup~nts of the unit. - 15 -

RECOMMENDATION

For the foregoing reasons, I recommend that the Loft Board grant the application, except as to McDemus, whose application should be denied.

Astri B. Gloade Administrative Law Judge March 23, 2017

SUBMITTED TO:

RICK D. CHANDLER, P.E. Commissioner

APPEARANCES:

WEEN & KOZEK, LLP A ttomeys for Petitioners BY: MICHAEL P. KOZEK, ESQ.

BORAH, GOLDSTEIN, ALTSCHULER, NAHINS & GOIDEL, P.C. Attorneys for Respondent BY: JASON M. FROSCH, ESQ. Opinions from the September 21, 2017 Loft Board meeting

#18: 79 Lorimer Street, TR-1273

Opinion of Chuck DeLaney

As the Tenant Representative on the Loft Board, I voted against this proposed order, and provide this dissenting opinion.

This is another case where the Loft Board is at odds with the administrative law judges of OATH with regard to who is a protected occupant in cases where tenants file for Loft Law coverage. Both the Loft Board and OATH agree that this building is an interim multiple dwelling with three residential units and I agree with that finding. The difference is that the Board only finds the three "prime tenants" to be protected occupants, while OATH finds five other individuals to be protected occupants. That is the finding with which I disagree and it the reason for my "no" vote on this case.

This is also a remarkable case in that the initial proposed order that was before the Board earlier in the year was subject to a significant rewriting before it was brought back to the Board. It was the rewritten order that was adopted.

The rewritten order is helpful to the extent that it acknowledges for the first time that the Board, at some point after the Loft Law was expanded and made permanent in 2010, changed its interpretation of how protected occupancy should be determined. In this proposed order, the Board set forth a new rationale for why protected occupancy should be limited to prime tenants or former prime tenants. I still disagree with the rationale, but it is helpful to be able to contrast this line of thinking with the logic that OATH has applied to perhaps a dozen or more cases in which the Board subsequently modified or rejected OATH's more expansive determinations of who is a protected occupant, or, as is written in many places in MDL Article 7C (the Loft Law) the "residential occupant qualified for the protection of this article."

I believe the Loft Board is not reading its own rules correctly, and also fails to take into account the difficulties that its "evolved" interpretation has caused for tenants applying for Loft Law coverage. By choosing to alter its practice incrementally over a series of cases, the Loft Board has created uncertainty for applicants, confusion for both tenants and owners, and added legal costs for both parties.

Over the three or four years that this "evolution" has taken place, I have consistently urged the Board, if it thinks that the way it decided cases for roughly thirty years should be changed, that it should draft rule changes to codify its new interpretation, promulgate those proposed changes, hold a public hearing and then alter its rules so everyone is clear on how the Board views these cases. The Board has finally started to address this issue, but this case has been decided under the existing rules. Before we get to the specifics ofthis case, it's important to address several points.

First, the application of this new standard only applies to tenants who apply for coverage and whose cases get heard at OATH and then come to the Loft Board for a determination.

If the landlord registers the building voluntarily, the landlord can designate who is/are the protected occupant(s)l and the Board will accept the owner's designation without questioning whether all those listed by the owner as protected occupants would be protected occupants under the Board's interpretation. This sets up a separate standard that I believe makes the process arbitrary. It also opens the door for a possible pay-to-play scenario. The landlord could offer to settle a coverage dispute by stipulation and list individuals as protected occupants that the Board would otherwise reject applying its criteria.

This is a very serious matter. We have already had a case where a married couple moved into a loft at the same time, prior to the window period and effective date of MOL 281.5. Only the husband signed the lease, and the Board decided that he was the protected occupant and his wife was not. In the Board's interpretation, the wife may be eligible to apply for succession rights if something were to happen to her husband. For the prior thirty years, both individuals would have presented documentation of their residential use during the applicable dates and both would have been designated 'as a ilresidential occupant qualified for proteCtion." In another case on the September 21, 2017 calendar, OATH, attempting to apply the Board's new interpretation, found that either the mother who signed the lease was the prime tenant and therefore the protected occupant, or, if s,he were found not to be using the loft as her primary residence, she would not be a protected occupant, but her son, who was the second applicant, would be the protected occupant. After the OATH AU released the Report and Recommendation in this case in late 2015, the mother withdrew her name from the application, thereby paving the way for her son who was raised in the loft arid has lived there since his birth in 1998, to be named the protected occupant. Without that action, he would not be a protected occupant. An interpretation of who is a protected occupant that divides hU,sband and wife, or mother and son, when both individuals lived in the loft during the entire window period and on the effective date of the law, reverses thirty years of practice. It makes no sense to me.

Second, the Board's new interpretation dangerously confuses the issue of primary residence with questions of coverage and protected occupancy.

This is also a new interpretation in the post-2010 era. The question of the status of an individual who used a loft unit residentially - either before, during, or after the applicable window period - was settled in the 1980s. The Board adopted a regulation that provided as one ofthe grounds for eviction of a residential occupant qualified for protection was "that the unit

1 It should be noted that as of June, 2017, the Loft Board is barred under MOL 282-A from accepting tenant coverage applications or landlord registration applications. This is a situation that causes problems of its own but those are not germane to the issue being discussed here. is not the primary residence of such residential occupant", (29 RCNY 2-08.1(a)(1). That regulation was challenged in court and upheld by the Appellate Division. However, the sequence is clear. If the unit is used residentially, the unit must be registered, and then the owner can commence a proceeding to evict someone who lives in the unit but does not use it as a primary residence in a separate proceeding. Making.the issue of whether or not a tenant who lives in an IMD unit uses the unit as his or her primary residence part of coverage applications is premature. Particularly in cases where multiple units are seeking coverage and the primary residence issue applies to only some of the units, this adds time and cost to the determination of coverage. If a protected occupant does not use the unit as a primary residence, then that issue should be taken up only after coverage is decided and the unit is registered.

Third, the Loft Board's rules were originally written as separate regulations, and were re codified and made part of the Rules of the City of New York at a later date.

This is important because the Loft Board started deciding coverage cases long before the rule regarding issues relating to prime and sub tenants was adopted. That rule was originally designated as a Regulation regarding, "Subletting, Subdivision, and Assignment." It later became Section 2-09 of 29RCNY, and it is the Board's new tendency to look to sections of 2-09 in determining who is the protected occupant that leads to the current situation. The rule was originally written to address two issues: first, to decide who received Loft Law protection when two or more different potential occupants were involved in a dispute over who should be covered and have possession of the unit, and second, to provide guidance on how protected occupants could sublet a loft unit going forward once that unit was registered as an IMD.

The disputes over contested space fell into two general categories: instances where a prime tenant had rented a large space and subdivided it to create units that were then rented out by the prime tenant to subtenants who then paid rent to the prime tenant and instances where a single unit was sublet during the original April 1, 1980-December 31, 1981 window period and the subtenant claimed the right to continued occupancy under the Loft· Law. In the latter situation, subtenants who were in place during the window period maintained that they were the protected occupant covered under the law and should have the right to remain in the unit. In the case of subdivided space, the rule addressed issues concerning the right of subtenants to remain, the question of whether the subtenants should continue to pay rent to the prime tenant or enter into privity with the landlord, and whether the prime tenant had a right to recover sublet space and/or be compensated for the cost of the development of those subdivided units.

In this case, the position of the applicants is clear. They are seeking coverage of several different units as a group. There is no dispute, and the reasoning 6fthe OATH judge provides the correct and simple solution to this case.

In one of the new paragraphs in the Proposed Order for this case, the Board holds: liThe use of familial relationships to determine Article 7-C protection, was not based on any part of Article 7-C or the Loft Board's rules. To the contrary, the plain language of Section 2-09 precludes awarding non-prime lessees, including family members, protected occupant status if the prime lessee is seeking protection and uses the unit as his or her primary residence."

I agree with this statement only in instances where there is in fact a battle over possession, that's what Section 2-09 was written to address. However, in situations where a group of people develop a large living space and share it, to limit protection to one individual makes no sense. NOTICE

A party aggrieved by a determination of the Loft Board may file an application for reconsideration of the determination. Under 29 RCNY § 1-07(b), an aggrieved party must serve the reconsideration application on the affected parties to the prior proceeding. Service of the application shall be completed in accordance with 29 RCNY § 1-06. The aggrieved party must then file the application at the Loft Board's office along with proof of service and the required application fee. Under section 1-07(b), "(t)o 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."

Pursuant to 29 RCNY §1-07(d):

A Loft Board determination pursuant to section 1-06 if these rules shall be the final agency determination for the purpose of judicial review, unless a timely application for reconsideration of the determination has been filed. In such case, (i) if the Loft Board modifies or revokes the underlying order, such revocation or modification shall be deemed the final agency determination from which judiCial review may be sought; (ii) if the Loft Board denies the reconsideration application, the underlying order shall be deemed the final agency determination; and (iii) if the Loft Board decided the reconsideration application by remanding the matter to the hearing officer for further proceeding, neither the underlying order nor the remand order shall constitute a final agency determination, and no judicial review may be sought until such time as the Loft Board issues a final agency determination following the remand.