315 Berry St. Corp. v Huang

[*1] 315 Berry St. Corp. v Huang 2003 NY Slip Op 51740(U) Decided on January 23, 2003 Civil Court Of The City Of New York, Kings County Lebovits, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 23, 2003
Civil Court of the City of New York, Kings County

315 BERRY STREET CORPORATION, Petitioner

against

JAMES HUANG et al., Respondents.



315 BERRY STREET CORPORATION Petitioner, -against- ZOLTON et al., Respondents.

315 BERRY STREET CORPORATION, Petitioner, -against-

against

DANIEL ROSENBAUM et al., Respondents.





068513/2002

Gerald Lebovits, J.

INTRODUCTION

In this a loft holdover proceeding, consolidated on consent under CPLR 602 (a) and CCA § 110 (b), petitioner seeks possession and use and occupancy, currently over $100,000. Petitioner began this proceeding by serving three 30-day termination notices on the tenants and undertenants of three units in an interim multiple dwelling (IMD) building—Units 4N, 6N, and 6S—at 315 Berry Street in Williamsburg, Brooklyn. The units, located in a mixed-use building covered under MDL Article 7-C, the Loft Law, have commercial certificates of occupancy but [*2]are in an area that permits residential use as of right. Petitioner, both sides agree, is now trying expeditiously to secure a residential certificate of occupancy. Petitioner registered the units with the New York City Loft Board and then, more than a decade ago, bought their Loft Law rights under MDL § 286 (12) and Loft Board Regulation 2-10 (c) from the residential tenants then residing there.

Petitioner raises a host of arguments to justify terminating the tenancies, all residential or largely so, and to explain why it may seek possession now that the leases, all commercial, have expired. When all is written and argued, respondents counter that the units are subject to rent stabilization under the Rent Stabilization Code (9 NYCRR 2520.11 [q]) and the Loft Board Rules (29 RCNY § 10 [c] [2]) "because they converted their spaces from commercial to residential use at their own expense with the knowledge, consent and acquiescence of the petitioner[] in a building with six or more residential units." (Affirmation in Support of Motion to Dismiss, May 31, 2002, at ¶ 68.)

All sides agreed to convert respondents' CPLR 3211 (a) (7) motion to dismiss and petitioner's opposition papers into a motion and cross-motion for summary judgment. (See CPLR 3212 [a]; CPLR 409 [b], 3212 [b].) At one time all sides agreed that petitioner must prevail on summary judgment if petitioner converted from residential to commercial use none of the three loft units in question after petitioner bought their rights under MDL § 286 (12). Although respondents withdrew that concession in late December 2002 after the Appellate Division, First Department, decided 182 Fifth Ave., LLC v Design Develop. Concepts, Inc., that case does not affect whether judgment must be granted to petitioner if respondents did not convert the units from commercial to residential use.

The parties disagree with one another about facts critical to their motions: The parties argue about whether an affidavit from petitioner's managing agent that no conversion took place should, as respondents put it, "be disregarded as preposterous on its face." (Respondents' Letter of September 18, 2002.) In its decision and order of September 18, 2002, the court therefore found that disputed credibility issues prevented any resolution by summary judgment. During a conference telephone call with counsel, both sides asked that if the court concluded that it cannot grant summary judgment to one side or the other, the court should hold a hearing on the limited fact in dispute: whether petitioner converted from residential to commercial use any unit after the buy out and before respondents moved into their units.

A hearing was held on the motions for summary judgment on October 28, 2002. Oral argument was held on November 18, 2002.[FN1] Petitioner proved that the units were occupied residentially before the buy outs and that no one converted them to commercial use after the buy outs but before respondents' tenancies began. By contrast, respondents offered only [*3]suggestions—and weak ones, at that—that petitioner had converted the units. At best, respondents showed that petitioner initially intended to convert one of the three units to commercial use but that petitioner never followed through with that plan by doing anything, even with that one unit. And what counts is what is done, not what is intended.

THE NARROW ISSUE BEFORE THE COURT

In elegantly written and voluminous papers, both sides advance arguments aplenty in ping-pong fashion. A discussion of these arguments is necessary, but only to bring to the fore the single, simple issue on which this proceeding turns.

Respondents argue that with petitioner's knowledge, they converted, at considerable expense to themselves, non-covered, non-residential units in an IMD building for residential use, even though the units do not have residential certificates of occupancy. Petitioner's acquiescence in converting the three units, respondents argue, violated MDL § 281 (3), which provides that a landlord may not offer non-residential space until it secures a residential certificate of occupancy. Thus, respondents submit, they are protected by the 1974 Emergency Tenant Protection Act and the Rent Stabilization Law, and are entitled to rent-stabilized renewal leases and rent set by the Loft Board.

Respondents' theme is stated in an affirmation: "The illegal arrangements orchestrated by petitioner resulted in a great financial windfall: the Tenants would prepare the units for certificate-readiness at their own expense and petitioner would in the meantime collect thousands of dollars per month from the Tenants without having to 'wait' for a certificate of occupancy. Once the Tenants' usefulness had worn out, and the caché of the neighborhood increased, petitioner would simply discard them by eviction." (Affirmation in Support of Motion to Dismiss, May 31, 2002, at ¶¶ 35 36.)

Petitioner's "placing greed ahead of patience," say respondents, requires a sanction, one directed by the pre-Loft Law decision in Mandel v Pitkowsky (102 Misc2d 478 [App Term, 1st Dept 1979, per curiam], affd for reasons stated below 76 AD2d 907 [1st Dept 1980, mem])—rent-stabilization protection. In Mandel, the Appellate Term wrote that if a landlord condones residential use in a building occupied by at least three loft tenants living independently of one another, the building is a de facto multiple dwelling; that a landlord that fails to allege multiple-dwelling status may not maintain a holdover proceeding; and that the apartments are subject to rent stabilization. (102 Misc2d at 479-481.)

According to respondents, the Rent Stabilization Code, which exempts from rent-stabilization protection accommodations purchased under MDL § 286 (12), exempts only those "accommodations which would otherwise be subject to rent regulation solely by reason of the provisions of Article 7-C of the MDL requiring rent regulation, but which are exempted from [*4]such provisions pursuant to §§ 286 (6) and 286 (12) of the MDL." (RSC § 2520.11 [q].) The Loft Board Regulations offer a similar provision: "If the unit is to remain residential, the owner remains subject to all requirements of Article C * * * * except that the unit is no longer subject to rent regulation where the coverage under Article C is the sole basis for such rent regulation." (29 RCNY § 10 [c] [2].) Here, respondents contend, they are rent-stabilized tenants because petitioner's buy out of Loft Law rights for the three units under Article C is not "the sole basis" for rent regulation. Rather, respondents contend, rent regulation is compelled by petitioner's failure to date to secure residential certificates of occupancy and by its allowing respondents spend considerable sums to convert the units to residential use.

Petitioner disputes respondents' reliance on Mandel v Pitkowsky as any basis for rent regulation. According to petitioner, the Loft Law did away with Mandel's equitable line of reasoning.

The Legislature enacted the Loft Law on June 21, 1981, to bring stability to the chaotic, rampant, and illegal conversions of commercial lofts to residential use. With the landlords' knowledge, tenants with commercial leases had made substantial improvements to their illegally occupied lofts to make them fit for residential occupancy. The Loft Law gave rent-stabilized status to tenants who resided in their lofts within a window period. Concurrently, the Loft Law gave landlords the right to collect rent and commence summary proceedings without a certificate of occupancy while the landlord brought the loft into compliance with the residential building code. (See generally Spring Realty Co. v. New York City Loft Bd., 127 Misc2d 1090, 1091 [Sup Ct, NY County1985], affd mem 117 AD2d 1029 [1st Dept], modified on other grounds 69 NY2d 657 [1986], appeal dismissed 482 US 911 [1987].)

The Legislature defined an "interim multiple dwelling" as any building occupied at one time for manufacture, commerce, or warehousing, lacks a residential certificate of occupancy, and was the residence of three or more families during a window period from April 1, 1980, to December 1, 1981. (See MDL § 281.) IMDs are buildings "located in a geographical area in which the local zoning resolution permits residential use as of right, or by minor modification or administrative certification of a local planning agency." (Id.) The premises in question fulfill the requirements of MDL § 281. The units are in an IMD building with more than a dozen residential units "located in a zone which permits residential use." (Affidavit of Respondent Christopher Quirk, May 31, 2002, at ¶ 22.)

Petitioner argues that the Loft Law was enacted to do more than to stop the chaos of illegal loft conversions. Petitioner argues that the Loft Law "put a stop to the equitable arguments espoused in a line of cases" like Mandel v Pitkowsky and Lipkus v Pikus (99 Misc2d 518 [App Term, 1st Dept, per curiam], affd on maj op below 72 AD2d 697 [1st Dept 1979, mem], appeal dismissed 51 NY2d 874 [1980]). Petitioner argues that the Loft Law's legislative intent is found in MDL § 280: "[S]ome courts have declared [commercial loft buildings converted to residential use without complying with building codes and minimum housing standards] 'de facto' multiple dwellings [and that state intervention is necessary to legalize] the [*5]present living arrangements in such 'de facto' multiple dwellings." Doubtless, the Legislature had in mind the pre-Loft Law Mandel. That is why, petitioner's argument goes, the Legislature set a window period in MDL § 281 from April 1, 1980, to December 1, 1981: to give rent-stabilized protection only to illegally converted units whose tenants lived residentially in them within the window period. Because respondents were not tenants in their units during the window period, petitioner asserts, they are entitled neither to Loft Law nor rent-stabilization protection.

Petitioner claims support for its position in 302 304 Met. Assocs. v Butler (NYLJ, Jan. 3, 2001, at 24, col 2 [Sup Ct, Kings County]). Petitioner asserts that Butler stated that "loft tenants who are not covered by the Loft Law are not protected by the rent stabilization laws and that the Loft Law superceded the old concept of 'de facto multiple dwelling' in Loft buildings." But the Butler court's treatment of the subject was more nuanced than that. The court simply wrote that "the application of pre-Loft Law authority to this case is dubious," although even on that the courts rightly disagree. (See e.g. 111 on 11 Realty Corp. v Norton (189 Misc2d 389, 400 n 4 [Civ Ct, Kings County 2001] [rejecting Butler by noting that sometimes "pre-Loft Law authority is applicable to post-Loft Law cases"]; Miller v Margab Realty LLC, NYLJ, Apr. 11, 2001, at 19, col 2 [Sup Ct, NY County] ["The argument that the Legislature specifically narrowed the applicability of the EPTA to residential tenants covered by the Loft Law is not persuasive."]; Etlin v Pepper, NYLJ, Apr. 26, 2000, at 30, col 5 [Civ Ct, Kings County] ["Until a new Loft Law is enacted to cover post-1981 residential loft occupancy, the Court is constrained to follow the case law, which holds that the pre-Loft Law line of cases are on point for post-Loft Law cases."].)

But the Butler court did not mean for its proposition to extend beyond its facts. Butler stands for various propositions, among them that rent stabilization does not apply if a lease is commercial and zoning law prohibits residential use, and in that event the landlord need not apply for a variance. Some courts disagree with this, too. (E.g. Miller, NYLJ, Apr. 11, 2001 [finding that zoning resolutions do "not create an absolute bar to rent regulation"].) More of all this in a moment.

For now, it suffices that Butler itself, as most relevant to this case, contradicts petitioner's main thrust. As the court wrote, "a landlord may not rent premises under a nominally commercial lease with knowledge that the tenants intended to convert the premises to residential use, acquiesce in that conversion and then seek to avoid the protections afforded residential tenants under the Rent Stabilization Law and the ETPA." And on that, as explained more fully below, all courts agree. (See e.g. Gloveman Realty Corp. v Jefferys, NYLJ, July 7, 2000, at 25, col 5 [Sup Ct, Kings County] ["[W]here, as here, it is undisputed that the rehabilitation of the building was paid for by the tenants, not the landlord, this exemption from ETPA coverage is inapplicable."]; 7 Dunham Place Realty, Inc. v Arndt, 189 Misc2d 710, 718 [Civ Ct, Kings County 2001] ["[S]tabilized status [is conferred] if the landlord has knowledge of the residential use of a nonresidential space, allows the occupant to expend significant sums to convert the property into a residence and acquiesces or looks the other way, with knowledge of what is going [*6]on."].)

Petitioner and respondents debate whether rent-stabilization protects tenants who convert commercial space in an IMD built before 1974 whose units are occupied residentially in a building with six or more units. For that they suggest that this court must resolve a split in the departments between J & M Real Estate Co. v Lim (Sup Ct, NY County, Nov. 15, 1991, Sherman, J., Index No. 1198/91, affd for reasons stated below 191 AD2d 345 [1st Dept 1993, mem]) and Tracto Equip. Corp. v White (NYLJ, Mar. 21, 1997, at 36, col 4 [App Term, 2d Dept, mem].) Certainly the parties are well versed on these cases; counsel for petitioner represented the landlord in J & M Real Estate, and counsel for respondents represented the tenants in Tracto Equipment. The J & M court denied rent stabilization to illegal residential tenants of eight cubicles on a floor in an IMD that had only a commercial certificate of occupancy. The Tracto court afforded rent stabilization to tenants who converted commercial space to residential use when the landlord knew and approved of the conversion and when the lease expressly indicated an intention to create residential living space.

This debate harkens to petitioner's point that respondents were not tenants in their units during the window period and for that reason alone they are entitled to no Loft Law or rent-stabilization protection. The issue is relevant because Tracto relied on the pre-Loft Law Mandel v Pitkowsky, which petitioner argues is no longer binding. Were this court to resolve the apparent split between J & M and Tracto, it would, under the rule of decision, choose Tracto, which this court's Appellate Term decided. As one court explained, "Under the doctrine of stare decisis, this court is bound by the judicial construction of a statute rendered by the court to which an appeal from this court lies * * * *" (81 Franklin Co. v Ginaccini, 149 Misc2d 124, 128 [Civ Ct, NY County 1990], citing McKinney's Cons Laws of NY, Book 1, Statutes § 72). Other trial courts in the Second Department have similarly applied Tracto over J & M. (See e.g. Halme v Meserole Ave. LLC & DHPD, Hous Pt, Civ Ct, Kings County, Sikowitz, J., L&T 6128/01 [finding that Tracto "is binding" on the Housing Parts in Kings County] [appeal pending]; Etlin, NYLJ, Apr. 26, 2000, at 30, col 5].)

But this court need not resolve any difference between the First and Second Departments. The departments are not really split. The rule of J & M applies if the units are incapable of legalization. (See e.g. Tan Holding Corp. v Wallace, 187 Misc2d 687, 688-689 [App Term, 1st Dept 2001, per curiam] ["Permanent coverage under a rent regulatory scheme should not, however, attach to dwelling units which have not been legalized or are incapable of being legalized."].) On the other hand, the rule of Tracto applies if the units can be legalized. The rule of Tracto controls here, therefore, because all sides agree that the units are capable of legalization. Petitioner, whose hardship application has been pending before the Loft Board for more than a decade, has a building permit and architectural plans, and the Loft Board is now conducting a hearing to determine whether to legalize the building.

Rent stabilization does not apply if a lease is commercial and zoning law prohibits residential use, but here zoning laws allow the current residential use, and the units will be [*7]legalized "as quickly as the Loft Board allows," as respondents' counsel put it. Thus, petitioner's reliance on 302 304 Met. Assocs. v Butler is misplaced. Rent-regulatory protection under the Rent Stabilization Law and the ETPA extends to residential occupants of commercial property if the owner knew of or acquiesced in the tenants' conversion to residential use. (E.g. Metzendorf v 130 W. 57 Co., 132 AD2d 262, 265, 269 [1st Dept 1987, per curiam]; Wilson v One Ten Duane St. Realty Co., 123 AD2d 198, 201 [1st Dept 1987, per curiam]; Korean Am. Assoc. of Greater NY v Katsukawa, NYLJ, May 23, 2001, at 20, col 2 [Civ Ct, NY County] ["[A] landlord may not rent premises under a commercial lease knowing that the tenant intends to convert the premise to residential use, permit the tenant to reside in the premises for a number of years and then avoid the protections accorded to residential tenants under the RSL and EPT[A]."]; 111 on 11 Realty, 189 Misc2d at 395 [citing Mandel, Metzendorf, and Tracto].)

Given that Tracto and the pre-Loft Law cases govern in this post-Loft Law proceeding, the next question concerns the effect that petitioner's purchase of Loft Law rights from the prior tenants might have on this proceeding. Petitioner argues that its MDL § 286 (12) buy out rendered the units permanently deregulated. For that proposition, petitioner cites 19 W. 36th Holding Corp. v Parker (NYLJ, Sept. 18, 2002, at 19, col 4 [Hous Pt, Civ Ct, NY County]) and Low v Cullen (NYLJ, Oct. 3, 2001, at 20, col 1 [Hous Pt, Civ Ct, NY County]), contending that both opinions reject rent-stabilization coverage if the sole basis for coverage is MDL Article 7-C. But neither case is on point. Neither deals with whether, after a buy out, an independent basis for regulatory coverage under Tracto, the Rent Stabilization Law, and the ETPA is that a landlord knowingly allowed a tenant to expend money to convert commercial space unit to residential space capable of legalization.

Respondents rightly rely on 182 Fifth Ave., LLC v Design Develop. Concepts, Inc. (751 NYS2d 739 [1st Dept 2002, mem]). In that opinion, rendered less than a month ago, the First Department used pre-Loft Law authority like Mandel v Pitkowsky to affirm Justice Leland DeGrasse's opinion (NYLJ, Dec. 12, 2001, at 18, col 2 [Sup Ct, NY County]) that a tenant states a cause of action for rent regulation if the tenant converts from commercial to residential use space bought out under MDL § 286 (12), so long as the conversion is done at tenant's expense with the landlord's knowledge, consent, or acquiescence. To the extent that 19 W. 36th Holding and Low might be read to suggest that a Loft Law buy out permanently exempts from rent stabilization every unit bought out, it is now clear from 182 Fifth Avenue that "notwithstanding the sale of Loft Law rights by a prior tenant," tenants who convert commercial to residential space will be protected if the landlord knew about it and consented. (751 NYS2d at 739.)

As now settled by 182 Fifth Avenue, fundamental justice compels courts to grant rent-stabilization protection for accommodations that, under MDL § 286 (12), would be subject to rent regulation by a reason other than a buy out under "the provisions of Article 7-C of the MDL." Indeed, "[i]t would be a ridiculous perversion of the statute to hold that when the costs [of conversion] are substantially borne by the tenant it would qualify the landlord for unregulated rent and leave the tenants defenseless against increased exactions." (Wilson, 123 AD2d at 201, cited in Tracto, NYLJ, Mar. 21, 1997, at 36, col 4].) It would be a perversion no buy out can [*8]save.

Both sides agree that respondents spent significant sums to make their units residentially habitable, and indeed comfortable. For the court to find that respondents are entitled to rent stabilization, however, the court must also find that respondents converted their units from commercial to residential use.

Thus have we come full circle to the one, narrow factual issue on which the court held a hearing: whether petitioner converted from residential to commercial use any unit after the buy out and before respondents moved into their units and made their improvements—or, stated another way, whether respondents ever actually converted their units to residential use. Necessarily, if the units were residential before respondents moved in, as petitioner contends, respondents never converted the units to residential use. If the units were never converted, 182 Fifth Avenue is inapposite because it compels rent stabilization only if the units were converted. And if petitioner is correct, Tracto is inapposite, too, because the units in Tracto were not residentially occupied before they were converted. Thus, if no conversion took place—if the units were continuously residential—respondents would have no independent right to claim rent stabilization. MDL § 286 (12) would apply without further discussion, given that petitioner paid the prior tenants and properly filed the buy-out agreements with the Loft Board to assure that the units would never be subject to rent stabilization.

FINDINGS OF FACT

Four witnesses testified at the hearing on the limited issue whether respondents converted their units from commercial to residential use. The court credits all the testimony. Based on the testimony, the court makes the following findings of fact.

Petitioner's managing agent, Alexander Uhr, negotiated the deal to buy out the rights to Unit 4N in 1991, to Unit 6N in 1989, and to Unit 6S in 1988. In these buy outs, Uhr also purchased the units' fixtures and improvements. The units, all IMD building units registered with the Loft Board, were occupied residentially, according to Uhr and corroborated by documents prepared contemporaneously, by residential tenants when Uhr signed the buyout agreements, which Uhr filed with the Loft Board. Uhr filed a declaration of intent to convert Unit 4N to commercial use. He did not file that declaration for the other units.

Respondents' witnesses testified that they spent a good deal of money, in one case $79,000, to make their lofts habitable, and doubtless beautiful, all with Uhr's permission and, at times, encouragement.

Uhr testified, and the court believes, that after the tenants moved out following the buy outs, the only alteration he made to any unit was to Unit 4N, where he removed a bathtub that was in "bad condition." Uhr further testified, and the court believes this also, that the units were occupied residentially from the early 1980s. The contest is over whether the units became [*9]commercial after the buy outs. Uhr testified credibly—and the court watched him carefully to detect any dishonesty—that no one occupied the units, commercially or residentially, in the months from the time the former bought-out tenants moved out until respondents, or their overtenants, moved in. His testimony that the units were vacant was uncontradicted by any prior statement or document. And although the respondents' witnesses have lived in the building for many years, they could point to no commercial tenant that occupied the units in the period between the vacatur of the bought-out tenants and the arrival of respondents and, where applicable, their overtenants.

Respondent-witness Daniel Rosenblum has been living in the building since April 1991, and he offered no direct evidence of an intervening commercial tenant. Respondent witness Paige Stevenson first saw her unit in February 1989, and she saw no intervening commercial tenant. Respondent-witness Louise Belcourt also first saw her unit in February 1989, and she saw no intervening commercial tenant. No neighbor testified to seeing any intervening commercial tenant. Nor did respondents produce any document to suggest the existence of an intervening commercial tenant.

The court is therefore faced on the one hand with direct testimony from Uhr, whom the court credits, that he did not rent to a commercial tenant and, on the other, with no smoking gun that he did. Instead of a smoking gun, respondents offer a pistol with blanks in the form of suggestions.

One suggestion is that the units were so raw, damaged, and crack-vial encrusted when respondents first saw them that no one could have lived there, and thus that a commercial tenant must have been there. The appliances in one unit were in poor condition, and in the other two they were absent altogether. In Stevenson's unit, hanging wires and garbage were strewn everywhere, as opposed to doors and windows, which were gone. As Stevenson memorably wrote, "If anybody lived here before us, they lived like animals in a cave; they must have slept on the floor, they must have eaten raw food and they must have been personally filthy." (Affidavit of Respondent Paige Stevenson, August 12, 2002, at ¶ 32.) Notably, however, no witness testified to seeing anything at all commercial inside the units, such as a machine or a tool or anything that could have stored like items. Nor does raw space prove the existence of prior commercial space. Loft space is often raw space. Just because loft space is raw does not mean the prior occupants did not live there. Indeed, the prior occupants could have removed residential belongings like their refrigerators, washing machines, and stoves. And, perhaps, the same people, probably trespassers, who entered through the missing doors and left the crack vials might have stolen evidence of habitation and strewn garbage about.

Another suggestion that the preceding tenancies were commercial is that respondents' current leases are commercial. But current leases are irrelevant. Current leases do not show whether a preceding tenancy was commercial or residential or even whether there was a preceding tenancy. Moreover, the current commercial leases are explained by the fact that of the three units, only one is currently 100 percent residential; the other two are 40 percent and 50 [*10]percent work space. (Affidavit of Respondent David Rosenbaum, June 24, 2002, at ¶ 4-6.) The court also credits Uhr's testimony that he offered respondents and their overtenants commercial leases because, although it turned out on cross-examination that Uhr admitted to using a residential lease for one unit in his building, the building had only a commercial certificate of occupancy. The court accepts that testimony because Uhr did not care much about the leases. They forbade residential use and subletting, but Uhr allowed both.

The third suggestion is that when Uhr bought out the rights to Unit 4N, he filed with the Loft Board a declaration that he intended to convert the unit to commercial space. Relevant, however, is what he did, not what he wanted to do in 1991 about one unit.

That leads to the fourth suggestion. Respondents introduced into evidence Loft Board Building Detail Report forms that show that Units 4N and 6N are listed as "BUYC." Unit 4S is listed as "BUYR." Although respondents offered no testimony about what these designations mean, respondents' counsel represents that the "C" in "BUYC" stands for "commercial" and means that petitioner purchased the rights to use Units 4N and 6N commercially and that the "R" in "BUYR" stands for "residential" and means that petitioner purchased the rights to use Unit 4S to use it residentially. The court accepts counsel's representation. Even so, an intent to convert is different from actually converting. And it is possible, of course, that the Loft Board simply made a mistake in its designations.

CONCLUSION

The one issue before the court on summary judgment is whether respondents converted their units to residential use after petitioner bought out the Loft Law rights to the then-residential units. The court finds no concrete evidence that respondents engaged in any conversion. The units were residential before respondents improved them, and they remained so after respondents improved them. The court finds that no commercial tenant occupied any unit from the time the bought-out tenants vacated and the time respondents and their overtenants moved in. Respondents are thus not entitled to rent regulation under Rent Stabilization Code (9 NYCRR 2520.11 [q]) and the Loft Board Rules (29 RCNY § 10 [c] [2]). Summary judgment is therefore granted to petitioner.

Three issues remain: attorney fees, use and occupancy, and any stay before the warrant may execute. The parties are requested to address these issues.

This is the court's order and opinion.

Dated:January 23, 2003

H.C.J. Footnotes

Footnote 1: During oral argument, petitioner offered to supplement its papers with Loft Board materials. Petitioner's counsel later told the court that the Loft Board materials had not yet arrived and might never arrive. The court therefore decides the case without them.