2023 New York Laws › MDW - Multiple Dwelling › Article 7-C - Legalization of Interim Multiple Dwellings › 286 - Tenant Protection.

§ 286. Tenant protection. 1. It shall not be a ground for an action or
proceeding  to  recover  possession  of a unit occupied by a residential
occupant qualified for the protection of this article that the occupancy
of the unit is illegal or in violation of  provisions  of  the  tenant's
lease or rental agreement because a residential certificate of occupancy
has  not  been issued for the building, or because residential occupancy
is not permitted by the lease or rental agreement.
2. (i) Prior to compliance with safety and fire  protection  standards
of  article seven-B of this chapter, residential occupants qualified for
protection pursuant to this  article  shall  be  entitled  to  continued
occupancy,  provided that the unit is their primary residence, and shall
pay the same rent, including escalations, specified in  their  lease  or
rental  agreement  to the extent to which such lease or rental agreement
remains in effect or, in the absence of a lease or rental agreement, the
same rent most recently paid and accepted by the owner; if there  is  no
lease  or  other  rental  agreement in effect, rent adjustments prior to
article seven-B compliance shall be in conformity with guidelines to  be
set  by  the loft board for such residential occupants within six months
from the effective date of this article.
(ii) In addition to any rent adjustment pursuant to paragraph  (i)  of
this  subdivision,  on  or  after  June  twenty-first,  nineteen hundred
ninety-two, the rent for residential units in interim multiple dwellings
that are not yet in compliance with the requirements of subdivision  one
of  section two hundred eighty-four of this article shall be adjusted as
follows:
(A) Upon the owners' filing of an alteration application, as  required
by paragraphs (ii), (iii), (iv), (v), (vi), and (vii) of subdivision one
of  section two hundred eighty-four of this article, an adjustment equal
to three percent of the rent in effect at the time the owner  files  the
alteration application.
(B)  Upon  obtaining  an  alteration permit, as required by paragraphs
(ii), (iii), (iv), (v), (vi), and (vii) of subdivision  one  of  section
two  hundred  eighty-four  of this article, an adjustment equal to three
percent of the rent  in  effect  at  the  time  the  owner  obtains  the
alteration permit.
(C)  Upon  achieving  compliance with the standards of safety and fire
protection set  forth  in  article  seven-B  of  this  chapter  for  the
residential  portions  of  the  building,  an  adjustment  equal to four
percent of the rent in effect  at  the  time  the  owner  achieves  such
compliance.
(D)  Owners who filed an alteration application prior to the effective
date of this subparagraph shall be entitled to a prospective  adjustment
equal  to  six  percent  of  the  rent  on  the  effective  date of this
subparagraph.
(E)  Owners  who  obtained  an  alteration  permit   prior   to   June
twenty-first,  nineteen  hundred  ninety-two  shall  be  entitled  to  a
prospective adjustment equal to fourteen percent of  the  rent  on  June
twenty-first, nineteen hundred ninety-two.
(F)  Owners  who  achieved compliance with the standards of safety and
fire protection set forth in article seven-B of  this  chapter  for  the
residential  portions  of  the  building  prior  to  June  twenty-first,
nineteen  hundred  ninety-two  shall  be  entitled  to   a   prospective
adjustment  equal  to  twenty  percent of the rent on June twenty-first,
nineteen hundred ninety-two.
(iii)  Any  rent  adjustments  pursuant  to  paragraph  (ii)  of  this
subdivision  shall  not apply to units which were rented at market value
after June twenty-first, nineteen hundred eighty-two and prior  to  June
twenty-first,  nineteen  hundred  ninety-two.  This  paragraph shall not

apply to units made subject to  this  article  by  subdivision  five  of
section two hundred eighty-one of this article.
(iv)  Payment  of  any  rent adjustments pursuant to paragraph (ii) of
this subdivision shall commence  the  month  immediately  following  the
month in which the act entitling the owner to the adjustment occurred.
3.  Upon  or  after  compliance  with  the  safety and fire protection
standards of article seven-B of this chapter, an owner may apply to  the
loft  board  for  an  adjustment  of  rent  based  upon the cost of such
compliance. Upon approval by the loft board of such compliance, the loft
board shall set the initial legal regulated rent, and  each  residential
occupant  qualified  for  protection  pursuant  to this article shall be
offered  a  residential  lease  subject  to  the  provisions   regarding
evictions  and  regulation  of  rent  set  forth in the emergency tenant
protection act of  nineteen  seventy-four,  except  to  the  extent  the
provisions of this article are inconsistent with such act.
4.  The  initial  legal  regulated  rent established by the loft board
shall be equal to (i) the rent in effect, including escalations,  as  of
the  date  of  application  for adjustment ("base rent"), plus, (ii) the
maximum annual  amount  of  any  increase  allocable  to  compliance  as
provided  herein;  and  (iii) the percentage increase then applicable to
one, two or three year leases, as elected by the tenant, as  established
by  the  local  rent  guidelines  board,  and  applied to the base rent,
provided, however, such percentage increases may be adjusted downward by
the loft board if prior increases based on loft board  guidelines  cover
part  of the same time period to be covered by the rent guidelines board
adjustments.
5. An owner may apply to the loft  board  for  rent  adjustments  once
based  upon  the cost of compliance with article seven-B of this chapter
and once based upon  the  obtaining  of  a  residential  certificate  of
occupancy.   If the initial legal regulated rent has been set based only
upon article seven-B compliance, a further adjustment  may  be  obtained
upon  the  obtaining  of  a  residential  certificate of occupancy. Upon
receipt of such records as the loft board shall require, the loft  board
shall determine the costs necessarily and reasonably incurred, including
financing,  in  obtaining  compliance  with  this  article pursuant to a
schedule of reasonable costs to be promulgated by it. The adjustment  in
maximum  rents  for  compliance  with  this  article shall be determined
either (i) by dividing the amount of the cash cost of such  improvements
exclusive  of  interest  and  service  charges over a ten year period of
amortization, or (ii) by dividing the amount of the cash  cost  of  such
improvements  exclusive  of  interest and service charges over a fifteen
year period of  amortization,  plus  the  actual  annual  mortgage  debt
service  attributable  to  interest  and service charges in each year of
indebtedness to an institutional lender, or other lender approved by the
loft board,  incurred  by  the  owner  to  pay  the  cash  cost  of  the
improvements,  provided  that  the  maximum  amount  of interest charged
includable in rent  shall  reflect  an  annual  amortization  factor  of
one-fifteenth  of  the outstanding principal balance. Rental adjustments
to each residential unit shall be determined on a basis approved by  the
loft  board. An owner may elect that the loft board shall deem the total
cost of compliance with this article to be the amounts certified by  the
local  department  of  housing  preservation  and  development  of  such
municipality in any certificate of eligibility issued in connection with
an application for tax exemption or tax abatement  to  the  extent  such
certificate  reflects  categories of costs approved by the loft board as
reasonable  and  necessary  for  such  compliance.  Rental   adjustments
attributable  to  the  cost  of  compliance  with this article shall not

become part of the base rent for purposes of calculating rents  adjusted
pursuant to rent guidelines board increases.
6. Notwithstanding any provision of law to the contrary, a residential
tenant  qualified  for  protection pursuant to this chapter may sell any
improvements to the unit made or purchased by him to an incoming  tenant
provided, however, that the tenant shall first offer the improvements to
the  owner for an amount equal to their fair market value. Upon purchase
of such improvements by the owner, any unit subject to  rent  regulation
solely  by reason of this article and not receiving any benefits of real
estate tax exemption or  tax  abatement,  shall  be  exempted  from  the
provisions  of  this  article requiring rent regulation if such building
had fewer than six residential units as of the effective date of the act
which  added  this  article,  or  rented  at  market  value  subject  to
subsequent  rent regulation if such building had six or more residential
units at such time. The loft board shall establish rules and regulations
regarding such sale of improvements which shall include provisions  that
such right to sell improvements may be exercised only once for each unit
subject  to  this  article,  and  that  the opportunity for decontrol or
market rentals shall not be available to an owner found  guilty  by  the
loft board of harassment of tenants.
7. The local rent guidelines board shall annually establish guidelines
for  rent  adjustments  for  the  category  of buildings covered by this
article in accordance with the standards  established  pursuant  to  the
emergency tenant protection act of nineteen seventy-four. The local rent
guidelines board shall consider the necessity of a separate category for
such   buildings,   and  a  separately  determined  guideline  for  rent
adjustments for those units in which heat is not required to be provided
by the owner, and may establish such separate  category  and  guideline.
The  loft  board  shall  annually  commission  a study by an independent
consultant to assist  the  rent  guidelines  board  in  determining  the
economics of loft housing.
8.   Cooperative   and   condominium   units  occupied  by  owners  or
tenant-shareholders shall not be subject to rent regulation pursuant  to
this article.
9.  No  eviction  plan  for  conversion  to cooperative or condominium
ownership for a building which is, or a portion of which is  an  interim
multiple dwelling shall be submitted for filing to the department of law
pursuant  to the general business law until a residential certificate of
occupancy is obtained as required by this article, and  the  residential
occupants  qualified for protection pursuant to this article are offered
one, two or three year leases, as elected by such persons, in accordance
with the provisions for establishment of initial  legal  regulated  rent
contained herein. Non-eviction plans for such buildings may be submitted
for  filing  only if the sponsor remains responsible for compliance with
article seven-B and for all work in common areas required  to  obtain  a
residential  certificate  of  occupancy. Cooperative conversion shall be
fully in accordance with section three  hundred  fifty-two-eeee  of  the
general  business  law,  the  requirements of the code of the local real
estate industry  stabilization  association,  and  with  the  rules  and
regulations promulgated by the attorney general.
10.  The functions of the local conciliation and appeals board of such
municipality regarding owners and tenants  subject  to  rent  regulation
pursuant  to  this  article shall be carried out by the loft board until
such time as provided otherwise by local law.
11. Residential occupants qualified for protection  pursuant  to  this
article  shall  be  afforded  the  protections  available to residential
tenants pursuant to the real property law and the real property  actions
and proceedings law.
12.  No  waiver  of  rights  pursuant to this article by a residential
occupant qualified for protection pursuant to this article made prior to
the effective date of the act which added this article shall be accorded
any force or effect; however, subsequent to the effective date an  owner
and  a  residential  occupant  may agree to the purchase by the owner of
such person's rights in a unit.
13. The applicability  of  the  emergency  tenant  protection  act  of
nineteen  seventy-four  to  buildings  occupied  by  residential tenants
qualified for protection pursuant to this article shall be subject to  a
declaration  of  emergency  by  the local legislative body. In the event
such act expires prior to the expiration of  this  article,  tenents  in
interim  multiple  dwellings  shall  be included in coverage of the rent
stabilization law of nineteen hundred sixty-nine  of  the  city  of  New
York.