475 Kent Owner, LLC v Coventry

Rosenberg & Estis, P.C. secured a victory before the Office of Administrative Trials and Hearings (OATH), denying Loft Law coverage for a unit with an interior area less than 400 square feet in a case of first impression. A tenant filed a Loft Law coverage application wherein he asserted, among other things, that his unit satisfied the 400 square foot minimum floor area requirement to be eligible for coverage. While conceding that the interior of the unit was less than 400 square feet in area, the tenant argued that the unit was nevertheless eligible for coverage because the combined area of the interior of the unit together with the exterior balcony exceeded 400 square feet. The tenant asserted that because the balcony was part of the unit, it should be included in the floor area calculation.

In opposition, Rosenberg & Estis, P.C. successfully argued that the interior area of the unit must be at least 400 square feet in area to be eligible for coverage. Citing the Legislature's intent in enacting the square footage requirement, Rosenberg & Estis, P.C. established that the intent of the law is to ensure that only those units that comply with applicable building codes can be eligible for coverage. Because the building code requires that all units meet a minimum room size, and "rooms" are located solely within a unit, the area requirement can only refer to the interior of the unit.

Rosenberg & Estis, P.C. also successfully argued that the Legislature's decision to set 400 square feet as the minimum size of an eligible unit is consistent with the minimum square footage required for a newly constructed "zero bedroom" affordable housing unit. The square footage of such units is calculated using only the interior of the unit. OATH also adopted Rosenberg & Estis, P.C.'s argument that including exterior space in the floor area calculation could lead to coverage of closet sized units with no more than a few square feet of interior area so long as the unit had adjacent outdoor space. These types of units clearly were not intended to be covered by the Loft Law. Based upon the arguments, OATH recommended the denial of Loft Law coverage.

This victory sets a new precedent for Loft Law disputes centered on the minimum square footage requirement and is a powerful statement for owners, as it curtails an unintended expansion of the Loft Law.