BBWG News

Lofts Legalization Labyrinth

Nov 12, 2019

The recent amendment to the Loft Law (Article 7-C of the Multiple Dwelling Law) on June 25, 2019 (the “2019 Amendment”) significantly expanded applicability of the law to potentially hundreds more buildings throughout the City, without lessening the extensive obligations placed on owners during the arduous legalization process regulated by the New York City Loft Board (the “Loft Board”). These changes significantly limit the options of how an owner can develop a property, and increases exponentially the costs of conversion.

Controversially, the 2019 Amendment created further legalization difficulties for owners. For example, the statute now covers units that do not have a window, are located in a basement, or are located in a building that contains a use set forth in use groups 15-17 in the Zoning Resolution (all of which were previously defined as inherently incompatible with residential use).

Loft Law tenants have the right to participate in the legalization process (known as the Narrative Statement Process), which is mediated by the Loft Board, and can object to an owner’s plans if they can show that the legalization plan unreasonably interferes with the use and enjoyment of their space, including commercial use in the building. The parties, with their respective architects and attorneys, attend the Narrative Statement conferences at the Loft Board, which could, without proper representation to navigate the process, take years.

The Loft Law entitles owners to collect rent from loft tenants so long as they are in compliance with the code compliance deadlines. Minimal rent increases are only permitted upon achieving certain benchmarks of the legalization process. Thus, loft tenants are incentivized to delay owners in the Narrative Statement and legalization process.

Additionally, the conversion of all loft buildings has been placed on hold at the New York City Department of Buildings (“DOB”) and require Loft Board approval prior to any work being performed, even in commercial units. Accordingly, it is necessary to have an attorney and architect experienced in Loft Law practice to advise you on your legal rights, obligations, and avenues to develop your property efficiently and avoid years of delay without income.

Loft Law is a very complex body of law that requires expertise in not only Loft Law, but also zoning law, landlord/tenant law, and rent regulation.

BBWG has over 30 years’ experience of proven excellence in all of these areas of law and can help clients achieve their goals effectively and cost-effectively.

Our team is continuing to expand. Lisa Gallaudet, having specialized in Loft Law for the past nine years, is the lead partner and head of the practice, overseeing all Loft Law matters for the Firm. Joseph Burden has practiced Loft Law for nearly forty years and has been at the forefront of the Loft Law since its inception. In response to the expansion of our Loft Law practice, this past spring, BBWG welcomed Michael Bobick as an associate. Prior to joining BBWG, Michael was an attorney at the Loft Board for nearly five years, managing the legalization conferences, and also working directly with DOB in the creation of the Loft/DOB Guidelines for Legalization, which are expected to be published later this year. Michael’s integral knowledge of the legalization of lofts is invaluable. We at BBWG stand ready to assist clients in all Loft Law matters.

By Lisa Gallaudet
Lisa Gallaudet can be reached at lgallaudet@bbwg.com

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