One of the most hotly contested issues in loft litigation – the legal status of lofts formerly covered by the Loft Law – has now been resolved in tenants’ favor in the First Department [i.e., Manhattan and the Bronx] as a result of David’s successful appellate representation. In Acevedo v. Piano Building LLC [source], David’s clients were tenants of a Chelsea loft pursuant to a “market rate” lease paying rent in excess of $3000 per month. Before the tenants’ occupancy, the prior owner had “bought out” the Loft Law tenant’s rights under Multiple Dwelling Law §286(12). The owner then proceeded to treat the loft as free from any rent regulation.
When a new owner came along and threatened to evict the tenants, they sued for a declaration that they were covered by rent stabilization. After winning summary judgment in the lower court, the tenants retained David, as counsel to Himmelstein McConnell Gribben Donoghue & Joseph, to defend the owner’s appeal. The owner argued that decisions from the Second Department, covering Brooklyn, required the court to rule that the loft was exempt from all regulation, including rent stabilization.
David argued that the Second Department cases were wrong and that the statute compelled the court to find the loft subject to rent stabilization. In a strongly worded opinion by Justice Diane T. Renwick, the Appellate Division sided with David and held that former Loft Law lofts located in buildings with six or more units are subject to rent stabilization notwithstanding any “buy out” of the prior tenants’ rights.
The decision merited an article in the New York Law Journal. The owner’s attorney has indicated that he intends to seek permission to appeal to the Court of Appeals in Albany, so this one may not be over. Stay tuned.