We hold that the landlord of a New York City loft who has not complied with the Loft Law and has not received an extension of time to comply may not maintain an ejectment action based on nonpayment of rent.
Plaintiff is the owner of a loft building in Brooklyn. Defendant-appellant occupies an apartment in that building, for which she has paid no rent since 2003. Plaintiff brought this action in ejectment; Supreme Court granted summary judgment awarding plaintiff possession of the apartment, and the Appellate Division affirmed (81 AD3d 769 [2011]). We granted permission to appeal (17 NY3d 705 [2011]), and now reverse. We conclude that, under the present circumstances, the landlord is not entitled either to collect rent or to evict the tenant. To explain why, we must summarize the historical background and the content of the relevant statutes.
The apartments commonly referred to as “lofts” are in buildings formerly used for commercial purposes—often former factories—that have been rented to residential tenants. Because the buildings do not have a residential certificate of occupancy, this use of the property is contrary to Multiple Dwelling Law § 301 (1), which says that, with exceptions not relevant here, “[n]o multiple dwelling shall be occupied in whole or in part until the issuance” of such a certificate. Section 302 (1) of the Multiple Dwelling Law says:
“a. If any dwelling or structure be occupied in whole or in part for human habitation in violation of section three hundred one, during such unlawful occupation . . .
“b. No rent shall be recovered by the owner of such premises for said period, and no action or special proceeding shall be maintained therefor, or for possession of said premises for nonpayment of such rent.”
Until the Legislature enacted the Loft Law (Multiple Dwelling Law art 7-C) in 1982 (L 1982, ch 349), the residential occupancy of lofts was illegal pure and simple: The tenants had no right to be there, and the landlords had no right to collect rent. Such illegal occupancies were common in New York City, and the Legislature enacted the Loft Law as a means of bringing them within the law.
As an effort to bring loft buildings into compliance with the law, the Loft Law has been less than a complete success. The deadlines for compliance have been extended several times (see Multiple Dwelling Law § 284 [1] [ii]-[v]). In 1983, there were 914 buildings under the Loft Board’s jurisdiction (Lebovits and Rzesniowiecki, The New York Loft Law, 38 NY Real Prop LJ [No. 2] 21, 28 n 28 [spring 2010]). By 1989, when the law had been in effect seven years, Justice Ostrau of the Appellate Term, dissenting in 902 Assoc. v Total Picture Creative Servs. (144 Misc 2d 316, 320 [App Term, 1st Dept 1989]), said that “[v]ery few interim multiple dwellings in this city have been legalized.” Even now, when the law has been in effect for 30 years, there are, according to the Loft Board’s Web site, 304 buildings— almost one-third of the 1983 total—that remain as “interim multiple dwellings” (http://www.nyc.gov/html/loft/html/ buildings/buildings.shtml [last visited May 30, 2012]). The reason for the slow pace of legalization is not clear—predictably, tenants blame landlords, while landlords blame tenants and the Loft Board—but it appears to present a significant practical problem.
Several opinions from intermediate appellate courts, perhaps finding this sort of result undesirable, have concluded that it can be avoided. In 902 Associates, the Appellate Term majority held that “compliance with Multiple Dwelling Law § 284 (1) must be pleaded and proven in order to successfully maintain a nonpayment proceeding against an occupant of an interim multiple dwelling” (144 Misc 2d at 317); but Justice Ostrau dissented, protesting that the majority “has now jeopardized the rent roll of almost every interim multiple dwelling in this city” (id. at 320). In Le Sannom Bldg. Corp. v Lassen (173 AD2d 249, 250 [1st Dept 1991]), the Appellate Division concluded, without explanation:
“The tenants’ argument that they cannot be ejected because they are protected loft tenants under Multiple Dwelling Law article 7-C is without merit. While the article protects tenants from being ejected due to the lack of a residential certificate of occupancy, it does not preclude ejectment for nonpayment of rent.”
And in 99 Commercial St. v Llewellyn (240 AD2d 481 [2d Dept 1997]), the Appellate Division sustained a claim for ejectment by the landlord of a loft building, rejecting an argument based on the absence of a residential certificate of occupancy. As in Le Sannom, the court in 99 Commercial did not explain its rationale. It simply said: “Although Llewellyn’s argument has merit in a summary proceeding for the nonpayment of rent, the plaintiff herein brought an ejectment proceeding. The case at
The tenant here suggests that Le Sannom may be distinguishable from this case, because for all that appears in the opinion the landlord may have been in compliance with the Loft Law. The tenant does not attempt to distinguish 99 Commercial, but says it was wrongly decided.
The results favored by Justice Ostrau in 902 Associates, and reached by the Appellate Division in Le Sannom and 99 Commercial—and in this case, where the Appellate Division relied on its earlier decisions—may make sense from a practical point of view. But we find nothing in the opinions endorsing such results, nothing in the arguments of the landlord here, and nothing anywhere else to explain how they can be reconciled with the text of the statute. They simply cannot. Multiple Dwelling Law § 302 (1) (b) bars not only an action to recover rent, but also an “action or special proceeding . . . for possession of said premises for nonpayment of such rent.” This is such an action, and it is barred. If that is an undesirable result, the problem is one to be addressed by the Legislature.
Accordingly, the order of the Appellate Division should be reversed, with costs, and the complaint dismissed.
Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Pigott and Jones concur.
Order reversed, etc.