BOR Realty Corp. v. New York City Loft Board

Murphy, P. J., and Smith, J., dissent in a memorandum by Murphy, P. J., as follows:

Article 7-C of the Multiple Dwelling Law, otherwise known as the Loft Law, was intended to help alleviate the acute shortage of residential housing in New York City (Multiple Dwelling Law § 280). Toward this end, the article provides a statutory framework to legitimize the residential use of space formerly devoted to commercial purposes, and to normalize and regulate relations between loft tenants and landlords. (See, Anthony v New York City Loft Bd., 122 AD2d 725.) To come within the protective scope of article 7-C, and, therefore, within the jurisdiction of the Loft Board created and charged by the Legislature with the responsibility of administering the provisions of article 7-C (Multiple Dwelling Law § 280 et seq.), a building, or portion thereof, must have been occupied, for residential purposes between April 1, 1980 and December 1, 1981 (the "window period”), "as the residence or home of any three or more families living independently of one another.” (Multiple Dwelling Law § 281 [1] [iii].) Once the Loft Board determines that these requirements have been satisfied, the building or qualifying part of the structure concerned is deemed an interim multiple dwelling. The landlord is then obligated to make whatever alterations are necessary to bring the affected units into compliance with safety and fire standards applicable to residential units, and to take any steps necessary to obtain a class A multiple dwelling certificate of occupancy for the residential portions of the building (Multiple Dwelling Law § 284). Thereafter, the units and the leases pursuant to which they are let are governed by the Emergency Tenant Protection Act of 1974 or, in the event of its expiration, the Rent Stabilization Law (Multiple Dwelling Law § 286 [3]).

The central question in the case presently before us is whether residential units múst have been occupied as primary residences during the aforementioned "window period” to support a building’s designation in whole or part as an interim multiple dwelling pursuant to Multiple Dwelling Law § 281 (1) (iii).

I agree with the majority that the Court of Appeals in Matter of Lower Manhattan Loft Tenants v New York City Loft Bd. (66 NY2d 298) was primarily concerned with the validity of Loft Board regulations sanctioning the eviction of tenants on grounds of nonprimary residency. This, however, should not obscure the fact that in sustaining the Loft Board’s nonprimary residency eviction regulation the court specifically addressed the contention of the petitioners therein that the *501jurisdictional provisions of the interim Multiple Dwelling Law defining "interim multiple dwelling” (Multiple Dwelling Law § 281) impose no primary residency requirement, and that since primary residency was unnecessary as a condition of unit coverage, neither was it necessary as a condition of tenancy thereafter. The court responded by construing the phrase "the residence or home” as it appears in Multiple Dwelling Law § 281 (1) (iii) in the following passage: "The word 'or’ between 'residence’ and 'home’ suggests a distinction between 'residence’ and 'home’ which completely disappears when used, as it is in section 281 (1) (iii), as part of the phrase 'the residence or home’ * * * 'The’, as Webster’s Third New International Dictionary (at 2368) informs us, 'refers to someone or something that is unique * * * or exists as only one at a time.’ Ergo, 'the residence or home’ as used in section 281, cannot properly be construed to exclude primary residence as a measure of its protection.” (Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., supra, at 304 [emphasis in original].)

Section 281 of the Multiple Dwelling Law is the jurisdictional provision of the Loft Law. Obviously the court understood this when it stated that " 'the residence or home’ as used in section 281, cannot properly be construed to exclude primary residence as a measure of its protection.” (Supra, at 304.) A fair reading of the above-quoted passage then would seem to necessitate the conclusion that, according to the court, the scope of Loft Law coverage is, indeed, conditioned upon the primary residency of the "window period” occupants. Thus, the court answered the argument of the Lower Manhattan Loft Tenants petitioners by expressly indicating that the premise of their argument, i.e., that Loft Law coverage is not initially contingent upon primary residency, was flawed.

Any doubt that the Court of Appeals fully understood the jurisdictional significance of its decision in Lower Manhattan Loft Tenants (supra) should be dispelled by its further observation that in enacting article 7-C, "the Legislature intended to encourage conversation to conforming residential use only to the extent that there was in fact residential use of the particular space within the meaning of the article, which, as we have seen, required that the space be occupied as 'the residence or home’ of the occupant (§ 281 [1]).” (Matter of Lower Manhattan Loft Tenants v New York City Loft Bd. supra, at 305.) What the court recognized was that when a building is deemed an interim multiple dwelling pursuant to the jurisdictional provisions of section 281 (1) of the Multiple *502Dwelling Law, the landlord is thereby obligated to make costly improvements in the premises and will eventually be bound by the rent regulations contained in the Emergency Tenant Protection Act of 1974. The rationale for imposing these burdens on the property owner is that the housing shortage will thereby be alleviated. However, where the initial "window period” tenancies are not primary in nature and, therefore, do not reflect the occupants’ need for primary residential accommodations, it would appear highly questionable whether there exists an adequate predicate for the imposition upon the landlord of the burdens entailed by article 7-C. Indeed, the Court of Appeals has implied rather pointedly that to construe interim Multiple Dwelling Law § 281 (1) (iii) so as to eliminate the jurisdictional primary residency requirement would throw the constitutionality of article 7-C into doubt. (Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., supra, at 306.)

Having made these observations, I would readily concede that there are sound policy reasons why primary residency should not be made a condition of Loft Law coverage since residential tenants had no legal status during the "window period” and may well have difficulty proving the primary nature of tenancies they were once at pains to conceal. In addition, there is certainly an argument to be made that alleviation of the housing shortage would be most effectively accomplished if the Loft Law were construed to maximize the conversion of loft space to residential use and only afterwards to impose a primary residency requirement. Although I believe that the Court of Appeals has already expressed itself on these points, it is true, as the majority points out, that it did so at a time when the jurisdictional scope of article 7-C was not directly at issue, and that it did not then benefit from full appellate presentation. The matter, which is one of considerable importance to loft tenants, deserves further consideration by the Court of Appeals.

I, therefore, dissent based upon what I take to be the import of Lower Manhattan Loft Tenants (supra) and would grant the petition to the extent of remanding the matter to the Loft Board for reconsideration.