(dissenting). The enactment of Multiple Dwelling Law article 7-C, effective June 21, 1982 (the Loft Law), was *319designed to "bring order to a chaotic and legally vague process of conversion of loft space formerly used for manufacturing, warehousing, and commercial purposes”, to foster conversion to residential use, thus ensuring compliance with the Multiple Dwelling Law and applicable building codes (memorandum of Legislative Representative of City of NY, 1982 McKinney’s Session Laws of NY, at 2484). Multiple Dwelling Law § 281 created a new category of building to be known as an "interim multiple dwelling” and defined the term as "any building or structure or portion thereof * * * which (i) at any time was occupied for manufacturing, commercial, or warehouse purposes; and (ii) lacks a certificate of compliance or occupancy pursuant to section three hundred one of this chapter; and (iii) on December first, nineteen hundred eighty-one was occupied for residential purposes since April first, nineteen hundred eighty as the residence or home of any three or more families living independently of one another.” (Multiple Dwelling Law §281 [1].)
The issue in this proceeding, appropriately converted by Special Term to an action for a declaratory judgment, concerns the construction of Multiple Dwelling Law § 281 (1) (ii). Specifically, it relates to the application of the statute to certain buildings or units which had been issued a temporary residential certificate of occupancy (TCO) prior to June 21, 1982, but which TCO had expired either before renewal or issuance of a final certificate of occupancy, under the terms of a regulation adopted by the Loft Board on July 20, 1983. The regulation provided that the issuance of a TCO prior to June 21, 1982, would not be the basis for exemption from coverage under article 7-C if, on or after that date, there was any period of time during which a temporary or final certificate of occupancy issued under Multiple Dwelling Law § 301 was not in effect, "for whatever reason whatsoever”.
Each of the three buildings involved in this action had been issued a TCO prior to June 21, 1982, pursuant to Multiple Dwelling Law § 301. Since there also had been compliance with the other statutory requirements, these buildings were exempt from the provisions of article 7-C. At the time this proceeding was commenced on December 2, 1983, each building had been covered by a TCO which had expired during the period in which petitioner’s applications for renewal were pending, but had not been acted upon by the Department of Buildings. The record does not disclose the basis for such failure to renew. Applying the 1983 regulation, which is *320herein challenged, the Loft Board held that the lapse in the TCO rendered the units and the buildings subject to coverage under article 7-C. Accordingly, petitioner brought this action to annul the regulation and to declare these buildings exempt from coverage under the Loft Law.
We agree with Special Term that the Loft Board exceeded its statutory authority in adopting the regulation. In defining an interim multiple dwelling, the Legislature provided in Multiple Dwelling Law § 281 (1), as one of the critical determinants, that the building or unit "lacks a certificate of compliance or occupancy” issued pursuant to Multiple Dwelling Law § 301. While recognizing that there are clear differences between a permanent certificate of occupancy and a temporary certificate, it is significant that both are issued under Multiple Dwelling Law § 301 and the statutory provision, defining an interim multiple dwelling, makes no distinction between the two. Had the Legislature intended coverage to be dependent upon the continued existence of a valid TCO, without any lapse for any period of time and irrespective of the reason, it would have expressly so stated. However, Multiple Dwelling Law § 281 (1), couched in the present tense, refers only to the existence of a certificate of occupancy, not to a subsequent lapse. Although we recognize that deference in interpreting regulations is to be accorded to the Loft Board in its broad administrative power, the Board’s authority does not extend to declaring legislative policy but rather, only to applying the statutory standard in an administrative capacity (cf. Axelrod Co. v Dixon Studio, 122 Misc 2d 770).
In enacting the Loft Law, the Legislature expressly recognized the need to alleviate the serious public emergency in housing. There was concern regarding the increase in the conversion of lofts in commercial and manufacturing buildings to residential use without compliance with building codes and rules, but with the further objective of assuring that minimum standards for health, safety and fire protection be maintained. As a result, the statute legalized residential loft tenancies, thereby affording needed safety and housing to tenants who were permitted to reside there, under the aegis of rent stabilization. At the same time, it provided aid to the owners who, without this enactment, could not legally collect rents through the use of summary proceedings in the absence of residential certificates of occupancy.
Special Term, however, found that the challenged regulation failed to promote these legislative purposes in that lapses *321in TCO’s may occur for a variety of administrative reasons, without any bearing upon the health and safety criteria which the Legislature determined to be critical. Furthermore, the record reflects that TCO’s have been routinely renewed by the Department of Buildings without reinspection even where the owner inadvertently failed to file for renewal until after expiration of the 90-day period during which a TCO is in effect. Thus, Special Term took into account the real possibility that lapses do result from bureaucratic delay and failure in processing renewal applications which would subject the building to the coverage of the Loft Law under the regulation.
In our view, as held at Special Term, it is necessary to consider the reason for such lapse. Thus, the court limited the imposition of loft regulation to those situations where there was a lapse as a result of a revocation of the TCO on a finding of fraud or where renewal was denied because the owner did not satisfy the conditions upon which the temporary certificate had originally been issued. We agree with that interpretation.
As applied here, absent a showing of fraud or noncompliance with any conditions required at the time of issuance of the temporary certificates, Special Term properly declared that Multiple Dwelling Law article 7-C did not apply to petitioner’s three buildings. While mindful of the laudable purpose underlying the Board’s adoption of the regulation, we find its promulgation to be legislative in scope and beyond the limited administrative powers which the Legislature has entrusted to the Loft Board. We so conclude, no matter how "careful and thoughtful” the promulgation of this rule may have been, as characterized by the majority. This is especially so when we note that the primary administrative jurisdiction over buildings in terms of lapsed temporary certificates is entrusted to the Department of Buildings, as the agency responsible for enforcing building codes and rules, not the Loft Board.
Accordingly, the order and judgment appealed from (one paper), Supreme Court, New York County (Orest V. Maresca, J.), entered October 2, 1984, which, inter alia, (1) declared invalid a July 20, 1983 regulation of the Loft Board, directing that certain buildings and individual units which had been issued temporary residential certificates of occupancy (TCO) on or before June 21, 1982, were, nonetheless, subject to the provisions of Multiple Dwelling Law article 7-C, if there existed a period of time of any length, for any reason whatso*322ever, during which a temporary or final certificate of occupancy issued pursuant to Multiple Dwelling Law § 301 was not in effect; (2) declared that Multiple Dwelling Law article 7-C did not apply to any building or unit issued a TCO on or before said date, regardless of any subsequent lapse in such TCO unless the TCO was revoked, nunc pro tunc, by the City Department of Buildings upon a finding of willful fraud or where the Department refused to renew the TCO on the ground that the conditions on which the temporary certificate of occupancy had been initially issued had not been satisfied; (3) prohibited the Loft Board from exercising jurisdiction over such buildings unless the Department of Buildings had revoked or refused to renew the TCO on said grounds; and (4) declared that article 7-C did not apply to residential units in three specific buildings owned by petitioner Eliahu Lipkis, located at 47 and 49 Walker Street and 71-73 Franklin Street, should be affirmed.
Asch, Ellerin and Wallace, JJ., concur with Sandler, J. P.; Kassal, J., dissents in an opinion.
Order and judgment (one paper), Supreme Court, New York County, entered on October 2, 1984, reversed to the extent appealed from, on the law, without costs and without disbursements, the judgment vacated, the regulation declared valid, and the three loft buildings owned by petitioner Lipkis declared subject to article 7-C and the jurisdiction of the Loft Board.