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No succession to loft tenancy.

In a case of first impression, the New York City Loft Board has ruled that, in the absence of specific rules and regulation promulgated by the. Loft Board relating to family succession, the analogous regulations pertaining to succession to tenancy under rent control and rent stabilization will not be applied.

The dispute arose concerning a building covered by Article 7C of the Multiple Dwelling Law (commonly known as the Loft Law). The entire fifth floor of the building was occupied by Patricia Bews, as the tenant covered by the Loft Law.

Sometime in 1988, James Turanski and his daughter moved in with Patricia Bew's (Turanski's sister-in-law) and began occupying space on the fifth floor. In November 1991 Bews and the owner reached an agreement whereby the tenant would sell her fixtures to the owner in exchange for her vacating the premises and assigning all right, title and interest in the premises and the fixtures to the owner. Under the provisions of the Loft Law, an owner who purchases the rights and fixtures of the unit removes the unit from rent regulation if the building contains less than six units. If the building contains six or more units, the owner is entitled to a free market rent from the next tenant, with the premises thereafter being subjected to rent regulation.

The owner had also agreed to allow Turanski to remain in occupancy through June,: 1992 so that Mr. Turanski's daughter would be able to complete her school term. However, in May 1991 Turanski ceased paying rent and suddenly claimed that he was covered by the Loft Law.

A holdover proceeding was commenced in the Civil Court. The court stayed the proceedings pending a determination by the Loft Board as to the respective rights of the parties, on condition that 'use and occupancy' continued to be paid during the pendency of the proceedings.

The proceedings came before the New York City Loft Board, with the owner represented by Joseph Burden of Belkin Burden Wenig & Goldman. The owner vehemently denied that Turanski had any entitlement to claim any rights under the Loft Law.

On January 6, 1993 the Loft Board promulgated an order denying the application of Dr. James Turanski and finding that he was not an occupant entitled to protection under Article 7C. Turartski had predicated his claim upon an assertion that the succession provisions promulgated by the New York State Division of Housing and Community Renewal for rent controlled and rent stabilized tenants should be made applicable to the Loft Law. DHCR's rent regulations generally permit family members succession predicated upon two (2) years of co-occupancy by the family member with the tenant prior to the permanent vacating of the tenant.

Unlike DHCR, which had promulgated specific succession regulations for rent controlled and rent stabilized apartments, the Loft Board had not promulgated any regulations entitling a family member to succeed to the statutory rights of a tenant regulated under Article 7C.

The Loft Board ruled:

"Thus, in the absence of specific rules and regulations promulgated by the board relating to family succession to a brother-in-law and a niece and nephew, Turanski's request to apply the family succession provisions of the Rent Stabilization Code by analogy under the circumstances of this case is rejected."

The Loft Board's ruling is important in two respects.

First, the board has specifically held that family members succession is nonexistent under the Loft Law.' Second, the decision emphasizes the constraints under which an administrative agency must act in its rule making capacity. Absent statutory authority, a governmental agency cannot impose rights and obligations upon parties falling within the are bit of its jurisdiction absent strict compliance with the requisite administrative and procedural steps needed to promulgate rules and regulations.
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Title Annotation:New York City Loft Board makes ruling on family succession regulations relating to rent control of New York, New York lofts
Author:Belkin, Sherwin
Publication:Real Estate Weekly
Date:Feb 10, 1993
Words:622
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