902 Associates, Ltd. v. Total Picture Creative Services, Inc.

• Decision Date: 06 July 1989
• Citation: 547 N.Y.S.2d 978,144 Misc.2d 316
• Parties: 902 ASSOCIATES, LTD., Petitioner-Landlord-Appellant, v. TOTAL PICTURE CREATIVE SERVICES, INC. and Peter Schneider, Respondents-Tenants-Respondents.
• Court: New York Supreme Court

Page 978

547 N.Y.S.2d 978

144 Misc.2d 316

902 ASSOCIATES, LTD., Petitioner-Landlord-Appellant, v. TOTAL PICTURE CREATIVE SERVICES, INC. and Peter Schneider Respondents-Tenants-Respondents.

Supreme Court, Appellate Term First Department.

July 6, 1989.

Finkelstein, Borah, Schwartz, Altschulter & Goldstein, P.C. (Sharyn Kaplan and Paul N. Gruber, of counsel), for petitioner-landlord-appellant.

Jeffrey S. Ween & Associates (Jeffrey S. Ween, of counsel), for respondents-tenants-respondents.

Before OSTRAU, P.J., and SANDIFER and McCOOE, JJ.

PER CURIAM:

Order entered December 23, 1987 (Taylor, J.) affirmed, with $10 costs.

The issue is whether compliance with Multiple Dwelling Law section 284, subdivision 1 must be pleaded and proven in order to successfully maintain a nonpayment proceeding against an occupant of an interim multiple dwelling. We hold that it must.

This nonpayment summary proceeding was brought upon a petition which alleges the status of the building premises as an "interim multiple dwelling" under Article 7-C of the Multiple Dwelling Law. The premises were originally registered with the Loft Board in November, 1983.

While the owner of an interim multiple dwelling may recover rent from residential loft occupants notwithstanding the rent-forfeiture provisions of the Multiple Dwelling Law applicable to owners of dwellings occupied without a certificate of occupancy, this right is contingent upon the loft building owner's "compliance" with Multiple Dwelling Law section 284 (see MDL § 285, subd. 1). One of the primary "owner obligations" under section 284 is the filing and/or obtaining of appropriate alteration applications and permits, and the taking of "all reasonable and necessary action" to obtain a certificate of occupancy within 36 months from June 21, 1982, the effective date of the Loft Law (MDL § 284, subd. 1[i]. The petition does not allege the requisite compliance with the Loft Law's owner obligations and is jurisdictionally defective (see Blackgold Realty Corp. v. Milne, 69 N.Y.2d 719, 512 N.Y.S.2d 25, 504 N.E.2d 392). Moreover, it is undisputed that the owner has not complied with the time requirements of section 284. There is no showing that the owner has taken any steps to bring the subject premises into compliance.

The owner's argument that mere registration of the building as an interim multiple dwelling entitles it to collect rent misperceives the goal underlying the statutory scheme. The Loft Law permits actions for rent in the absence of a residential certificate of occupancy but the owner is required to move forward on his plans to legalize the premises within the time periods specified in the statute. The law does not contemplate a situation where owners will be permitted to collect rent while the building languishes indefinitely as an "interim" multiple dwelling. At some point--and the statute expressly defines the time period--an "interim" multiple dwelling must be upgraded to a class A multiple dwelling. To the extent an owner requires extensions of the time to comply, or to the extent the cost of compliance renders legal residential conversion infeasible, an owner is authorized to apply to the Loft Board for relief (MDL § 284, subd. 1[i]; § 285, subd. 2).

We appreciate that this is not an isolated case and that the dynamics of loft conversion are such that there are many dwellings which have not been legalized in conformity with the time schedule originally set by the Legislature. Any claimed inequities should be addressed to the Legislature. This Court is charged with enforcing the statute as written. The language of the statute setting forth a timetable is clear and unequivocal and not subject to judicial interpretation.

Accordingly, inasmuch as the owner has failed to allege or demonstrate compliance with Multiple Dwelling Law § 284, subd. 1, a nonpayment summary proceeding may not be maintained and the petition was properly dismissed by the Civil Court.

OSTRAU, P.J., dissents in the accompanying memorandum.

OSTRAU, Presiding Justice, dissenting.

I respectfully dissent and would reverse the order appealed from and reinstate the petition in this non-payment proceeding.

By virtue, inter alia, of the acute housing shortage in this City, residential tenants, particularly during the 1970's, gravitated to space available in commercial loft buildings. Many of these "loft tenants" entered into conventional commercial loft leases which were little more than contrivances calculated to disguise the residential use to be made of the premises.

Multiple Dwelling Law §§ 301 and 302 forbid an owner from recovering rent from tenants of a multiple dwelling which lacks a valid certificate of occupancy. In Lipkis v. Pikus, 99 Misc.2d 518, 416 N.Y.S.2d 694 (Riccobono, J. dissenting) [AT1], affd. 72 A.D.2d 697, 421 N.Y.S.2d 825, lv. to app. denied 51 N.Y.2d 874, 433 N.Y.S.2d 1019, 414 N.E.2d 399, the Appellate Term, First Department confronted some of the anomalies arising from the residential use of commercial loft premises. Recognizing that landlords and tenants had to some extent acted in concert in unlawfully converting commercial loft premises to residential use, the Appellate Term majority reversed the dismissal of non-payment proceedings notwithstanding tenants' assertion and proof that the premises there at issue lacked valid residential certificates of occupancy. Indeed, in Lipkis, the Appellate Term majority (in spite of the proscription of MDL §§ 301 and 302 against a landlord's recovering of rent from tenants of a multiple dwelling lacking a valid certificate of occupancy) awarded final judgment in favor of the landlord, stayed that judgment until such time as the landlord obtained valid certificates of occupancy, and directed the tenants to deposit with the Clerk of the Court of original jurisdiction any and all arrears in rent as well as accruing use and occupancy at the rate previously payable as rent, with those funds to be released to the landlord upon his securing residential certificates of occupancy. In so doing, the Appellate Term majority observed:

"The pervasive extent of the problem confronting us is best illustrated by a report of the Department of City Planning (received in evidence) indicating that fewer than 10% of the industrial buildings located in Manhattan which have undergone total or...