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Winning a Loft Law Case: The Long Winding Road to Weaponing the Loft Law and Rent Stabilization Code to Finally Prevailing at Appellate Division

I previously represented a long-term resident of a Tribeca apartment in the successful appeal of a CPLR Article 78 determination permitting the building’s owner to remove the building’s only elevator from service.

While the building was formerly used for manufacturing purposes, as of the 1970s, the building was residentially occupied. My client was one of the earliest residents of the building.

Due to the residential occupancy, the building became subject to the jurisdiction of the New York City Loft Board pursuant to Multiple Dwelling Law Article 7-C, also known as the “Loft Law.” Under the Loft Board’s regulations, the owner was prohibited from discontinuing elevator service while the building was subject to the Loft Law.

In 2009, the building was legalized for residential use. The building then exited the Loft Board’s jurisdiction and became subject to rent stabilization. Almost immediately thereafter, the building’s owner removed the elevator from service. However, the owner neglected to first obtain permission from the Division of Housing and Community Renewal (“DHCR”).

What resulted was a protracted legal battle between the building’s tenants and the owner, first before DHCR, then before the Supreme Court, and ultimately before the Appellate Division.

Initially, DHCR ruled in favor of the owner and found that the building’s elevator was too old to be restored to service. Then, DHCR reversed and found that the elevator was a required service that had been discontinued without proper permission and must be restored.

The owner then commenced a CPLR Article 78 proceeding before the Supreme Court seeking a judicial determination that DHCR’s decision was irrational due to the elevator’s age. The Supreme Court agreed and reinstated DHCR’s earlier determination permitting the owner to remove the building’s elevator from service.

I then drafted and argued an appeal before the Appellate Division seeking reversal of the Supreme Court’s decision. The rationale behind this successful appeal concerned the interplay between regulatory schemes. Put in simple terms, under rent stabilization, there were certain “required ancillary services” that the owner was obligated to maintain absent DHCR’s express permission. These services included those provided when the building entered rent stabilization. Given that the building entered rent stabilization at the exact moment it exited the Loft Board’s jurisdiction, the Loft Board’s regulations – which required the owner to maintain elevator service – informed the list of services “required” under rent stabilization.

The Appellate Division agreed and reversed the Supreme Court, holding that elevator service was a “required ancillary service” under rent stabilization because it was a required service under the Loft Law. Accordingly, the Appellate Division held that DHCR was correct in requiring the owner to restore elevator service on the grounds that it was a required service improperly discontinued by the owner without first obtaining DHCR’s permission.

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