the debtor's real property located in manhattan the tenants claim that they are covered by the loft laws so that they don't have to pay rent in fact they haven't paid rent i guess in the past thirty or so years  my my client obtained the property in two thousand and two they haven't paid rent to my client there's no question that the property is not in compliance with the health and safety codes of the city of new york it's not in compliance with the loft law there's no there's no dispute that the occupants haven't paid rent either this appeal involves is there any dispute that the failure to comply with  the codes precludes your client from collecting rent well collecting rent is exactly what's one of the largest issues in what this appeals about it hasn't if you said that it does preclude but it doesn't preclude him from receiving rent yes yes that's your occupation yes so there's no no a great no disagreement that your client may not collect rent within the meaning the statute right right he can't he can't force them to pay rent cannot effect based on non to volunteer in terrible pay rent if they want the benefit of the protection of the statute yes they do my client can accept that there's no prohibition on that he would then turn around that and pay that and fines to the new to the city of new york so there's no real benefit for my my client to do that because he's still going to pay a mortgage in taxes but the tenants get that's how they get the benefit of the protection of living there for forever basically right now they're there they're not paying rent and basically they've been living for free for the past forty years can't be kept out you couldn't kick them out our position is that we can you could you could you could bring in a fiction proceeding based on hold as a hold over because they're not covered by the law flaw that was that was our argument in front of the bankruptcy court judge grossman disagreed with us  certified it to the nd circuit and and here we are looking at the whole over how but during the during the term of the lease they feel they don't pay rent because you're not in compliance and you can you reject them under those circumstances property free and clear of the tenants during the lease because they haven't paid rent during the lease no but these leases expired decades ago there are no leases here would you destroy the building know i don't believe so i don't think anybody would let it lead a landlord destroy a building with people in it or you could give them some warning yes we could but no i  don't think that's a practical solution but that eventually that is the goal we intend to sell it free and clear of all interests and i assume whoever is going to buy it's going to knock it down and and build something extravagant but in a nutshell that's our that's our argument is this a question that we should certified to the new york court of appeals but it being a question of the interpretation of new york statutes i asking me is difficult because i see it so clearly but it is it is completely involving new york law soli new york law and just like with the santiago amount of bertie that probably thank you ok we'll hear from your opponents mr weener bruce wiener for the statutory tax the debtor is completely twisting new york law to create a windfall for itself the debtor bought this property in two thousand  subject to the rights and interests of those statutory tenants who have been there for decades the prior owner at least since one thousand nine hundred and three when it registered the building as a multiple dwelling recognize that the tenants were protected by the law flaw it then sold the building in two thousand to this owner the debtor here registered the building from two thousand and two to two thousand and seven thereby recognizing that the statutory tenants were protected by the law flaw it took it failed to legalise the building in the seventeen years that it's own the building it didn't take the required steps to legalize how many excuse me how many statutory tenants are there i think there are fourteen where it is true that they've been living there for decades without paying rent is that right yes there were some periods of time where under state law because we had injunctive relief it was conditioned upon payment of use in occupancy without prejudice but those for at least the period of time that this owner has owned the building there has been no payment of rent because there has been no compliance they make who pays for repairs how to tenants have paid for the upkeep of the building for decades they pay for the fuel they pay for the repairs they pay for their own heat and hot water this landlord has walked away from the building literally more than ten years ago about twelve years ago after going through what was called the narrative  loft board reaching an agreement with the tenants to legalize the building it then walked away and has provided no services paid no taxes since then on the building and wants now to create a windfall by being able to sell the building free and clear occupancy rights under the law floor are not dependent upon the payment of rent that the circular argument the new york court of appeals in the chazen case is made very clear and there's no need to certify that issue to the court of appeals it's black letter law in new york that landlord who is not in compliance with the law law cannot collect rent they cannot bring any proceedings to collect rent they cannot bring any eviction proceedings a lawful or does not require that there be a lease in fact in most cases there were no leases at the time that this statute was in acted and to eighty six dollars only requires that it be the tenants primary residence for protection the nd phrase that set off as a comma that relates to rent limits the amount of rent that a landlord who is in compliance can collect it doesn't say that you have to pay rent voluntarily to be under the protection of the law the law set up as a carrot and stick approach that the landlord would have to legalize to be in compliance st of all doesn't require final legalisation there are steps along the way that if the landlord complies with those steps and the debtor here has complied with none of those steps it can collect rent subject to a final certificate of occupancy those steps are to go through the narrative process obtain an alteration file an alteration application to obtain a permit at that point the owner is in compliance even though it doesn't have final legalisation of the building it can collect rent it can sue for rent it can bring eviction proceedings if it's in if it's gotten its permit this landlord is more than seventeen years late in doing that it never got a permit to do any work and never did any work walked away from the building entirely and then when the property was about to be option for fell to pay taxes filed a chapter eleven to stop the auction sale of the property and then tried to use the bankruptcy code where the you know the this court and and other courts and district courts have found in analogous circumstances in rent regulation and rent control rent stabilization the month of dirty case the fart in case of a case is that the bankruptcy was can't be used to and the protections of rent regulation this is a only this is only  novel because it involves a loft law but the the principles of the same loft tenants once there is legal is ation go into the rent stabilization system that's this is only a temporary place even though it's been decades here it was supposed to be a temporary place where we call ization would occur and then the tenants would go into the rent stabilization system that should have happened decades ago the prior owner didn't take any steps to legalize and this owner has not thank you thank you very much we'll hear from the city good morning your honor may it please diana lawless on behalf of new york city law for i think a lot of this is already been covered i just like to emphasize a few points the building here could only be for sold free and clear of the tenants interest if not a political bankruptcy law permitting the sale or if there's a bonafide dispute a political non bankruptcy law is the law flaw the law flaw gives the tenant the right to occupancy premised only on their primary residence the  debtor can seems to concede primary residence also it's clear he also concedes that he cannot collect rent he concedes that he cannot a victim for the nonpayment of rent all that the debtor is trying to do is bank to avoid the lawful avoid new york law and try to use the bankruptcy code in order to do something he cannot do under new york law which cannot be done emphasized that the new york court of appeals made clear our reading of rebuttal just briefly with regards to the chase on case i believe it was decided correctly but i don't believe that it's relevant to this case at all there the in the court of appeals it was assumed that there was tenants were protected  mean if they are protected i admit they cannot be evicted for nonpayment of rent but that is not what's happening here i'm saying that they're not protected because they haven't paid rent and that's the rent that they they have to pay to explain again please why chazen doesn't control the because it was assumed there that those tenants were protected by the by the law flaws it was just assumed yes and and that's what the decision says that if you're protected you cannot be evicted for nonpayment of rent here we're saying they're not protected because they haven't paid rent under twenty eight thousand and sixty two dollars why which does it says nothing about after compliance paying i then then the balance of the statute talks about escalations after steps regarding compliance to me initially that means there's a base friend that has to be paid  there is no way we can force a tenant to pay rent but if they want the benefit of this statute and their continued occupancy they have to pay that right that may be two hundred dollars a month from nine hundred and eighty two dollars and the landlord stuck with that but you said there were no leases in effect so how would you how would we know what rent needed to be paid we would have to determine that through ok i think we have the arguments