This week the Court of Appeals, New York State’s highest court, delivered a major victory to owners of buildings subject to the Loft Law. In Matter of Aurora Assoc. LLC v Locatelli (click here to read the decision), the Court held that covered units subject to a sale of rights and improvements are not subject to rent stabilization under the Emergency Tenant Protection Act of 1974 (“ETPA”). The Court’s decision overruled the holding in Acevedo v Piano Bldg. LLC (70 AD3d 124, 1st Dept 2009), where the Appellate Division, First Department held that Loft Law units subject to sales of rights and improvements were subject to regulation under ETPA in pre-1974 buildings containing six or more units. Accordingly, where an owner purchased or purchases a tenant’s Loft Law rights and improvements, that unit is no longer subject to any form of rent regulation, even where the building contains six or more units. The only exception is where the building receives tax benefits that require rent regulation. Accordingly, unlike units that are rent stabilized under the ETPA, which can no longer be deregulated, Loft Law units can be permanently deregulated.
If you have any questions about the impact of this case on your building or any other Loft Law questions, please feel free to contact us.
|Jason R. Davidson
Member – Litigation
|Anthony J. Virga
Of Counsel – Litigation