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.

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.

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.

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!