Congratulations! You have obtained a residential Certificate of Occupancy for your IMD building and the Loft Board has issued a final rent order. It's time to celebrate!
However, don't forget to have your lawyer do three things as soon as possible:
(1) offer the first rent-stabilized lease to the IMD tenants,
(2) register the building with the Department of Housing Preservation and Development (DHPD), and, after receiving a registration identification number from DHPD,
(3) register with the Division of Housing and Community Renewal (DHCR).
Taking these steps as soon as possible is in your best interest as a building owner. If you fail to register with DHCR and DHPD, then you will not be able to maintain a nonpayment proceeding or a holdover proceeding against your IMD tenant. You may say: "What's the hurry? If my IMD tenant stops paying rent, then I'll register with DHPD and DHCR and then start my case." The problem is that it takes three to four weeks for DHPD to process an IMD owner's first registration statement. As a result, your case will be delayed for three or four weeks.
There are many form leases available for purchase. What form lease do you offer to your tenants? Unfortunately, there is no form lease available for purchase which is tailor-made for rent-stabilized tenants who were formerly IMD (loft law) tenants. In the absence of a tailor-made lease, you can use the Real Estate Board of New York (REBNY) form rent-stabilized lease. If you offer this lease to your tenants - or any other form lease available for purchase - don't be surprised if your tenants' lawyer objects and demands certain changes to the form lease! For example, most tenant attorneys demand that a "rider" to the lease reflect the fact that the tenant has the right to sell improvements which the tenant made to the tenant's loft. If your tenants' attorney objects to the lease you have offered, be sure to get your lawyer involved.
Wednesday, October 28, 2009
Friday, October 16, 2009
The Loft Board's October 15, 2009 Meeting
At the October 15, 2009 meeting, Executive Director Lanny Alexander said that Chuck Delaney was correct: the Open Meetings Law requires that the Loft Board's minutes must be published within two weeks of the meeting. At the present time, the minutes generally contain a detailed recitation of what the various members say at each meeting. Ms. Alexander suggested that in order to meet the two-week deadline, staff should omit these details. She reminded everyone that the meetings are tape-recorded and members of the public could always ask to hear the tape recording. The Board voted to adopt Ms. Alexander's suggesting of streamlining the minutes.
Stay tuned to this blog: it may include "details" which will be omitted from the Loft Board's minutes.
Prior to the Board's October 15, 2009, Martha Cruz, Director of Hearings, prepared a proposed order concerning the Fogel case, regarding 93-99 Commercial Street. The proposed order was mailed to the parties.
Generally speaking, it has been the Loft Board's practice over the years to "close the record" after the proposed order is issued. In other words, if a party is offended by the Board's proposed order, and the party or his/her attorney writes a last-minute letter of protest, perhaps raising new issues, the Loft Board's staff ignores it, and refuses to distribute the late submission to the members of the Loft Board.
In the late afternoon or early evening of Friday October 9, 2009, the Loft Board received a submission from an attorney for one of the parties to the Fogel case. Martha Cruz and Lanny Alexander read the submission, decided that it raised significant legal issues, and, on the day before the Board's meeting, withdrew the case from the Board's calendar of cases for consideration on October 15, 2009. Delaney correctly noted the Loft Board's past practice of closing the record, and asked staff to report to the Loft Board, at the next meeting, on "the process that currently exists."
Practice pointer to all litigants before the Loft Board and their attorneys:
You will receive the Loft Board's proposed order days before the Board's scheduled meeting - sometimes even one day before! Your attorney should be ready to jump into action, write a letter of protest, raise new issues and hand-deliver the submission to the Loft Board. The worst that could happen is that the Loft Board could say no, we won't accept your last-minute submission. You'll never know unless you try.
Stay tuned to this blog: it may include "details" which will be omitted from the Loft Board's minutes.
Prior to the Board's October 15, 2009, Martha Cruz, Director of Hearings, prepared a proposed order concerning the Fogel case, regarding 93-99 Commercial Street. The proposed order was mailed to the parties.
Generally speaking, it has been the Loft Board's practice over the years to "close the record" after the proposed order is issued. In other words, if a party is offended by the Board's proposed order, and the party or his/her attorney writes a last-minute letter of protest, perhaps raising new issues, the Loft Board's staff ignores it, and refuses to distribute the late submission to the members of the Loft Board.
In the late afternoon or early evening of Friday October 9, 2009, the Loft Board received a submission from an attorney for one of the parties to the Fogel case. Martha Cruz and Lanny Alexander read the submission, decided that it raised significant legal issues, and, on the day before the Board's meeting, withdrew the case from the Board's calendar of cases for consideration on October 15, 2009. Delaney correctly noted the Loft Board's past practice of closing the record, and asked staff to report to the Loft Board, at the next meeting, on "the process that currently exists."
Practice pointer to all litigants before the Loft Board and their attorneys:
You will receive the Loft Board's proposed order days before the Board's scheduled meeting - sometimes even one day before! Your attorney should be ready to jump into action, write a letter of protest, raise new issues and hand-deliver the submission to the Loft Board. The worst that could happen is that the Loft Board could say no, we won't accept your last-minute submission. You'll never know unless you try.
Delaney to Loft Board: Minutes of Loft Board's Meeting Must Be Made Public in Two Weeks
At the Loft Board's September 17, 2009 Meeting, Chuck Delaney (tenant's representative) told the Loft Board that minutes of the Loft Board's meeting must be made available to the public within two weeks of the Board's meeting. At the present time, the Board does not make the minutes public until they are approved by the Loft Board. For example, the minutes of the May meeting are approved at the June meeting, and made public a short time thereafter. However, the minutes of the June meeting are not approved by the Loft Board until its September meeting, a three-month delay. Lanny Alexander, the Executive Director of the Loft Board, responding to Delaney, said she would look into this issue and report to the Board at the next meeting.
The new Loft Board Chairman Robert D. Limandri (Commissioner of the Department of Buildings) presided over his first Loft Board meeting on September 17, 2009.
At the same meeting, the Loft Board announced that Beverley Miller, Director of Legalization, left the Loft Board (a division of the Department of Buildings) to work for another division of the Department of Buildings.
Ms. Miller was employed at the Loft Board for 25 years. Her first assignment at the Loft Board was public information officer, a post now held by Michelle Shephard. Her most recent position at the Loft Board required her to preside at narrative statement conferences, attended by landlords, tenants, their architects and attorneys. She will be sorely missed by all.
Martha Cruz presented an interesting summary calendar case regarding 178 Stanton Street. Unfortunately, since, as a member of the public, I am not permitted to read proposed orders before the Loft Board's meeting, I can only give you the broad outlines. Apparently, the parties in that case arrived at a stipulation of settlement of some kind. The Loft Board therefore disposed of the case, without approving or disapproving of the stipulation of settlement. Chuck Delaney voiced the opinion that the stipulation is egregious, contrary to public policy and the Loft Board should not approve of the stipulation. Delaney voted "no" but the remainder of the Loft Board voted to adopt the proposed order prepared by Martha Cruz.
Although the Loft Board did not interfere with the parties' settlement in the Stanton Street case, Delaney's comments serve as a reminder to all landlords and tenants: even if you work out a deal, and settle your dispute before the Loft Board or the Office of Administrative Trials and Hearings, the Loft Board may refuse to honor your settlement agreement.
The new Loft Board Chairman Robert D. Limandri (Commissioner of the Department of Buildings) presided over his first Loft Board meeting on September 17, 2009.
At the same meeting, the Loft Board announced that Beverley Miller, Director of Legalization, left the Loft Board (a division of the Department of Buildings) to work for another division of the Department of Buildings.
Ms. Miller was employed at the Loft Board for 25 years. Her first assignment at the Loft Board was public information officer, a post now held by Michelle Shephard. Her most recent position at the Loft Board required her to preside at narrative statement conferences, attended by landlords, tenants, their architects and attorneys. She will be sorely missed by all.
Martha Cruz presented an interesting summary calendar case regarding 178 Stanton Street. Unfortunately, since, as a member of the public, I am not permitted to read proposed orders before the Loft Board's meeting, I can only give you the broad outlines. Apparently, the parties in that case arrived at a stipulation of settlement of some kind. The Loft Board therefore disposed of the case, without approving or disapproving of the stipulation of settlement. Chuck Delaney voiced the opinion that the stipulation is egregious, contrary to public policy and the Loft Board should not approve of the stipulation. Delaney voted "no" but the remainder of the Loft Board voted to adopt the proposed order prepared by Martha Cruz.
Although the Loft Board did not interfere with the parties' settlement in the Stanton Street case, Delaney's comments serve as a reminder to all landlords and tenants: even if you work out a deal, and settle your dispute before the Loft Board or the Office of Administrative Trials and Hearings, the Loft Board may refuse to honor your settlement agreement.
Friday, June 19, 2009
DOB Takes Loft Board Under Its Wing
Chairman Rauch announced at the Loft Board's June 18, 2009 meeting that, effective July 1, 2009, the Loft Board would "merge" with the Department of Buildings. As a result, Rauch said, the Loft Board will have greater resources: an additional attorney to work with Lanny Alexander (Director of Loft Board) and Martha Cruz (Director of Hearings), and three additional people to work with Beverly Miller, the Director of Legalization. Despite the merger, the Loft Board's offices will remain at 100 Gold Street for the time being.
Chuck DeLaney, the tenant's representative, who has been a member of the Loft Board since it was first formed, appeared skeptical about the move, but did not articulate his concerns.
There are only 315 buildings left in the Loft Board's jurisdiction. The Loft Board's mission is to decrease this number as quickly as possible and put itself out of business.
Chairman Rauch announced that this was his last Loft Board meeting, and that Robert LiMandri, Commissioner of the Department of Buildings, will take his place as Chairman. Phyllis Arnold, Deputy Commissioner of the Department of Buildings, will be assisting LiMandri. Someone from the Fire Department will also join the Loft Board.
At the May 21, 2009 meeting, the Loft Board asked Director Lanny Alexander to draft a regulation requiring landlords to post a notice in their building about the building's legalization status. She told the Board at yesterday's meeting that she had not yet done so.
The discussion and vote on cases presented at yesterday's meeting was particularly lively, and there were dissenting votes cast on several cases.
In a rent overcharge case concerning 1005 Grand Street, Chuck DeLaney insisted that it wasn't enough that the landlord lost the case: the landlord should be punished for filing a "bogus" declaration of intent with the Department of Finance. The declaration of intent apparently stated that the landlord intended to use a certain unit for commercial purposes for a period of fifteen years. Although the tenant signed a lease promising to use the premises commercially, the tenant proved to the ALJ that they were actually residing at the premises, entitled to the protection of the Loft Law, and entitled to pay only a low regulated rent. Chairman Rauch said that although the tenants agreed to use the premises commercially, tenants protected by the Loft Law cannot waive their rights pursuant to the Loft Law.
Chuck DeLaney, the tenant's representative, who has been a member of the Loft Board since it was first formed, appeared skeptical about the move, but did not articulate his concerns.
There are only 315 buildings left in the Loft Board's jurisdiction. The Loft Board's mission is to decrease this number as quickly as possible and put itself out of business.
Chairman Rauch announced that this was his last Loft Board meeting, and that Robert LiMandri, Commissioner of the Department of Buildings, will take his place as Chairman. Phyllis Arnold, Deputy Commissioner of the Department of Buildings, will be assisting LiMandri. Someone from the Fire Department will also join the Loft Board.
At the May 21, 2009 meeting, the Loft Board asked Director Lanny Alexander to draft a regulation requiring landlords to post a notice in their building about the building's legalization status. She told the Board at yesterday's meeting that she had not yet done so.
The discussion and vote on cases presented at yesterday's meeting was particularly lively, and there were dissenting votes cast on several cases.
In a rent overcharge case concerning 1005 Grand Street, Chuck DeLaney insisted that it wasn't enough that the landlord lost the case: the landlord should be punished for filing a "bogus" declaration of intent with the Department of Finance. The declaration of intent apparently stated that the landlord intended to use a certain unit for commercial purposes for a period of fifteen years. Although the tenant signed a lease promising to use the premises commercially, the tenant proved to the ALJ that they were actually residing at the premises, entitled to the protection of the Loft Law, and entitled to pay only a low regulated rent. Chairman Rauch said that although the tenants agreed to use the premises commercially, tenants protected by the Loft Law cannot waive their rights pursuant to the Loft Law.
Wednesday, May 27, 2009
Loft Board's Meeting of May 21, 2009
At the April meeting, the Loft Board asked its staff to obtain an opinion from the New York City Corporation Counsel on the question of whether an owner who allows a building permit to expire can still collect the 8% rent increase permitted by the Loft Law for securing a building permit. At the 5/21/09 meeting, the Chairman reported that Corporation Counsel advised that the 8% rent increase cannot be rescinded even if a building owner allows a permit to expire. Bear in mind that this is the opinion of Corporation Counsel, and now the opinion of the Loft Board, but a judge is free to decide differently. To the best of my knowledge, there are no court opinions on the subject.
Corporation Counsel advised the Loft Board that the Loft Board has the authority to draft and enforce a rule requiring all loft landlords to post a notice in their building about whether there building is in compliance with Article 7-B. The Chairman asked the Loft Board staff to draft a rule and bring it to the next meeting. It will take at least four or five months for the rule to become effective, because of various legal requirements, including publication of the proposed rule and a mandatory comment period.
Talks are continuing at City Hall about the transfer of the Loft Board's operations to the Department of Buildings. For the time being, Loft Board staff will remain at 100 Gold Street.
Loft Board staff said that at least 10 building owners called the Loft Board to express shock and dismay at the increase in registration fees up to $500 per unit.
Corporation Counsel advised the Loft Board that the Loft Board has the authority to draft and enforce a rule requiring all loft landlords to post a notice in their building about whether there building is in compliance with Article 7-B. The Chairman asked the Loft Board staff to draft a rule and bring it to the next meeting. It will take at least four or five months for the rule to become effective, because of various legal requirements, including publication of the proposed rule and a mandatory comment period.
Talks are continuing at City Hall about the transfer of the Loft Board's operations to the Department of Buildings. For the time being, Loft Board staff will remain at 100 Gold Street.
Loft Board staff said that at least 10 building owners called the Loft Board to express shock and dismay at the increase in registration fees up to $500 per unit.
Thursday, April 23, 2009
Are Buildings With Expired Permits In Compliance?
At today's Loft Board meeting, members decided to ask Corporation Counsel for a legal opinion on the question of whether owners of buildings with lapsed building permits (and no residential Certificate of Occupancy) are out of compliance with the Loft Law. The Loft Board will also ask Corporation Counsel whether the owners of such buildings should continue to collect the 8% rent increase permitted when a building permit is obtained. In addition, Mr. Delaney, the tenants' representative on the Loft Board, wants Corporation Counsel's opinion as to whether a lapsed building permit is a tenant defense to a nonpayment proceeding. In other words, are IMD tenants of buildings with lapsed permits free to stop paying rent? The Loft Board hopes to receive the Corporation Counsel's opinion in time for its May meeting.
If the Corporation Counsel believes that such owners are out of compliance, then the Loft Board may initiate proceedings against these owners seeking to collect a penalty. But this is nothing compared to the hardship IMD owners would endure if the tenants of such buildings begin withholding their rent.
If you have allowed your permit to lapse, by all means, now is the time to renew your permit.
In addition, the Chairman of the Loft Board asked Loft Board staff to draft a regulation requiring owners of buildings who have not achieved compliance with Article 7-B (that is, have not completed legalization work), to post a notice in their building to the effect that the building is not in compliance with fire and safety requirements. Owners who don't post notices would then be penalized by the Loft Board.
I will, of course, attend the May meeting and then post my blog.
If the Corporation Counsel believes that such owners are out of compliance, then the Loft Board may initiate proceedings against these owners seeking to collect a penalty. But this is nothing compared to the hardship IMD owners would endure if the tenants of such buildings begin withholding their rent.
If you have allowed your permit to lapse, by all means, now is the time to renew your permit.
In addition, the Chairman of the Loft Board asked Loft Board staff to draft a regulation requiring owners of buildings who have not achieved compliance with Article 7-B (that is, have not completed legalization work), to post a notice in their building to the effect that the building is not in compliance with fire and safety requirements. Owners who don't post notices would then be penalized by the Loft Board.
I will, of course, attend the May meeting and then post my blog.
Friday, April 17, 2009
Registration Fees Going Up to $500 per Unit
When the Loft Board sends you a registration renewal invoice this June, they will be demanding registration fees of $500.00 per unit! So there's another reason to legalize your building - avoidance of high registration fees.
The Loft Board will be holding its monthly meeting on Thursday April 23, 2009 at 2:00 pm at Specter Hall, main floor, 22 Reade Street, New York, New York. I will attend, blog about anything interesting that comes up at the meeting, and send my blog to you. Stay tuned!
The Loft Board will be holding its monthly meeting on Thursday April 23, 2009 at 2:00 pm at Specter Hall, main floor, 22 Reade Street, New York, New York. I will attend, blog about anything interesting that comes up at the meeting, and send my blog to you. Stay tuned!
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