Important Questions and Answers on the New and Old Rules of the Loft Law

Fall 2015

By Adam Leitman Bailey and Dov Treiman


 

Q1. What is a loft?

A1. The word “loft” has no legal meaning. The word “loft” is used in several laws and in the naming of The New York City Loft Board which was set up for the purpose of taking illegal residential tenancies in buildings that were originally built for commercial use. These buildings, in their original configuration, are not safe for residential occupancy. In the Loft Law[1] and several related laws, procedures are set up to protect and preserve the residential occupancies through renovations to these buildings to bring them up to the safety standards that are normal in apartment buildings. Not all commercial buildings qualify for this process. Those that do are called “interim multiple dwellings.”

Q2. What is the difference between a “loft” and an “interim multiple dwelling” (“IMD”)?

A2. Although the “Loft Law” uses the word “loft,” the word is never defined. However, an “interim multiple dwelling”[2] is a dwelling space that meets certain statutory criteria for being brought under the jurisdiction of the New York City Loft Board as the residential spaces in a qualifying building are transitioned to protection under a form of rent stabilization.

Q3. Is the end of the legalization process in an IMD, rent stabilization?

A3. Once the legalization process for an IMD is completed, the affected units come under the Emergency Tenant Protection Act of 1974 (ETPA). While rent stabilization needs a building to have six or more residential units to come into effect for a particular building, ETPA buildings that were IMD’s can have as few as three units. However, ETPA buildings use the same Rent Stabilization Code as rent stabilized buildings.[3]

Q4. What is the difference between an IMD tenant and a rent stabilized tenant?

A4. Once the New York City Loft Board determines that a building is an IMD, the Loft Board’s regulations cover the tenancy. Those regulations bear some similarities to rent stabilization, but they are tailored to the process of moving the building towards legalization. In many buildings, this means radical architectural changes, while in rent stabilization, the buildings’ architecture tends to remain completely unchanged. However some things, like the rights to succeed to a tenancy are the same in IMD regulations and in rent stabilization. So, while the laws are similar, they are also dissimilar. Each is its own system.

Q5. Can any building come under the Loft Law?

A5. There are actually two different loft laws, although they are found in one section of Article 7C the Multiple Dwelling Law. These are referred to as “Old Loft Law”[4] buildings and “New Loft Law”[5]

Q6. What qualifies a building to come under the Old Loft Law?

A6. In order for a building to qualify as an IMD under the Old Loft Law, the building in question must:[6]

  1. Have been used manufacturing, commercial, or warehouse purposes;
  2. Not have a certificate of occupancy for residential occupancy;
  3. Have three or more residences from April 1, 1980 thru December 1, 1981 (“the window period”);
  4. Be located in a zone where
    1. residential use is permitted as of right or
    2. by minor modification or
    3. in an area under study for such use or
    4. can be achieved by special permit;
  5. Not be governmentally owned.

Q7. What qualifies a building to come under the New Loft Law

A7. The only difference between the Old Loft Law and the New Loft Law is in determining which buildings come under the control of the New York City Loft Board while the building is being transitioned from illegal residential use to legalized rent stabilization. Once a building is brought under the control of the New York City Loft Board, the rules and regulations for bringing those buildings out of Loft Law coverage and under rent stabilization are identical under the Old and New laws. There is only one set of regulations to cover both—except in determining if the building is an IMD at all.

This chart shows the differences between the Old and New Loft Laws, both of which are still in effect:

Screen Shot 2015-11-19 at 2.43.35 PM Screen Shot 2015-11-19 at 2.49.06 PM

Like the Old Loft Law, the New Loft Law has its own window period. The New Loft Law window period is January 1, 2008 through December 31, 2009. In addition:

  1. The building must have three or more residential units during the window period.
  2. The qualifying units must
    1. Not be located in a basement or cellar
    2. Have at least one entrance that does not require passage through another residential unit
    3. Have at least one window opening onto a street, yard, or court
    4. Be at least 400 square feet (until June 30, 2015, 550 square feet thereafter[9]) in area.
  3. The building must not only be zoned for residential occupancy or easily be converted to such, but be located in certain specific geographic areas that are set forth in the Loft Law, in various parts of Manhattan, Brooklyn, and Queens.[10]

Q8. Is Loft Law protection limited to tenants who caused the building to qualify as an IMD?

A8. It is the unit that was occupied by the tenant that gets the protection, not the actual tenant who was in occupancy in the “window period” described in A4(3). If the number of units goes down from three units after there was such residential occupancy during the “window period,” the building remains an IMD.[11]

Q9. Does the building have to have cast iron architecture to qualify as an IMD?

A9. While many of the buildings that came under the old loft law led to the commonly held belief that cast iron architecture was required for a building to qualify as an IMD, that was largely coincidence. The Loft Law largely tracks New York City’s Zoning Resolution. [See A4(4) which speaks directly to Zoning driving which buildings qualify and which don’t.] Neither the Zoning Resolution nor the Loft Law sets forth what kind of building it is to qualify, only that it have a history of having been used manufacturing, commercial, or warehouse purposes. Many of the buildings that were previously used manufacturing, commercial, or warehouse purposes that were rezoned as residential were, in fact, cast iron architecture.

Q10. Does a tenant have to be an artist to qualify for IMD protection?[12]

A10. This is the same kind of question as Q7 (cast iron architecture). The Loft Law itself does not require that the tenant be an artist to qualify for IMD protection. However, many of the Old Loft Law buildings are located in zoning where only artists certified by the New York City Department of Cultural Affairs or New York State Council on the Arts may reside in buildings erected in that zone as Joint Living Working Quarters for Artists.[13] This is actually a zoning issue rather than a Loft Law issue, but the Loft Law follows the Zoning Resolution on such questions and, in fact, most Old Loft Law tenants were artists. New Loft Law tenants are less likely to be.

Q11. How long does it take an IMD to complete the legalization process?

A11. Historically, most buildings take at least 10 years from when the petition is first filed to place a building under the Loft Board to when the Loft Board sets the rents and directs that leases be issued under the Emergency Tenant Protection Act. However, 20 years is not uncommon.

 

[1] Multiple Dwelling Law Article 7C.

[2] Multiple Dwelling Law §281.

[3] 9 NYCRR §§2520.1 et seq.

[4] Multiple Dwelling Law §281(1).

[5] Multiple Dwelling Law §281(5).

[6] Multiple Dwelling Law §281(1).

[7] Multiple Dwelling Law §281(1).

[8] Multiple Dwelling Law §281(5).

[9] Multiple Dwelling Law §281(5).

[10] Multiple Dwelling Law §281(5).

[11] Multiple Dwelling Law §281(3).

[12] There are separate provisions of artists in Multiple Dwelling Law Article 7B.

[13] Multiple Dwelling Law §276.

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