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Illegal Loft Tenants Entitled to Remain Rent-Free
With the enormous demand for residential space in Manhattan, and the corresponding decline in demand for commercial space over the last half century, many New York landlords have rented commercial lofts for residential purposes, without bringing those lofts into compliance with the standards the city mandates for residential space. In 1982, the state legislature enacted the Loft Law to assist loft landlords in obtaining residential certificates of occupancy, but the statute has been successful only in part. What rights, then do landlords and tenants have with respect to those lofts that remain illegally occupied? The Court of Appeals addressed that question in Chazon, LLC v. Maugenest, NYLJ 6/8/12, p. 24, col. 5, and held that the clear language of Multiple Dwelling Law section 302(1) provides that landlords may recover neither rent nor possession from residential tenants remaining in illegal lofts.
The Statutory Scheme
Multiple Dwelling Law section 301(1) prohibits occupation of multiple dwellings without a residential certificate of occupancy. Section 302(1) provides that if a dwelling is occupied in violation of section 301, “[n]o rent shall be recovered by the owner of such premises ' and no action or special proceeding shall be maintained therefor, or for possession of said premises for nonpayment of such rent.” These provisions, which were in place before enactment of the Loft Law, make residential occupation of premises lacking a residential certificate of occupancy entirely illegal.
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