In the Matter of the Application of ACKERMAN HOLDING CO. LLC.
Order
NEW YORK CITY
LOFT BOARD
In the Matter of the Application ofACKERMAN HOLDING CO. LLC. / Loft Board Order No. 3031
Docket No. LE-0452
RE: 118-120 Duane Street
New York, New YorkIMD No. 10013
ORDER
The New York City Loft Board (“Loft Board”) accepts the Report and Recommendation of Director of Hearings Martha Cruz dated March 14, 2006. The post-legalization rent adjustment for the Interim Multiple Dwelling (“IMD”) units at 118-120 Duane Street, New York, New York is set forth in the attached Report and Recommendation. The initial legal regulated rents for the IMD units are:
Unit #2SE:$672.59
Unit #2SW:$716.68
Unit #3SE:$783.02
Unit #3W:$395.18
Unit #5F (a.k.a. #5N):$878.92
Unit #5SE:$723.82
Unit #5SW:$723.82
The initial term of the rent for units #2SE, #2SW, #5F, #5SE and #5SW is September 1, 2005 through August 31, 2007. The initial term of the rent for units #3SE and #3W is September 1, 2005 through August 31, 2006. The initial rent for unit #2F[1] does not have to be set because this unit was the subject of a sale of rights agreement pursuant to Multiple Dwelling Law §286(12). Thus, pursuant to Title 29 of the Rules of the City of New York (“RCNY”) § 2-10(c)(2) and § 2-10(f)(5), unit #2F is no longer subject to rent regulation.
The Owner of the building is directed to register units #2SE, #2SW, #5F, #5SE, #5SW, #3SE and #3W with the New York State Division of Housing and Community Renewal.[2] Further, the Owner is directed to provide the occupants of units #2SE, #2SW, #5F, #5SE, #5SW, #3SE and #3W, with a residential lease subject to the provision regarding evictions and regulations of rent set forth in the Emergency Tenant Protection Act of 1974, pursuant to the terms set forth in the Report and Recommendation.
Effective thirty-five days from the date of the mailing of this Order, this building is no longer an interim multiple dwelling and is no longer under the jurisdiction of the New York City Loft Board.
DATED: March 16, 2006
Marc Rauch
Chairperson
DATE LOFT ORDER MAILED:
Members Concurring:Chairperson Rauch, Barowitz, Bolden-Rivera, Delaney, Lusskin, Jaffe, Orrantia (7)
NEW YORK CITY
LOFT BOARD
In the Matter of the Application ofACKERMAN HOLDING CO. LLC / Loft Board Order No.
Docket No. LE-0452
RE: 118-120 Duane Street
New York, New YorkIMD No. 10013
MARTHA CRUZ, DIRECTOR OF HEARINGS
BACKGROUND
On May 6, 2005, a final certificate of occupancy was issued for 118 Duane Street, New York, New York under certificate number 100458103F by the New York City Department of Buildings. Pursuant to Title 29 of the Rules of the City of New York (“RCNY”) §2-01(i)(1), the owner of the building, Ackerman Holding Co., LLC. (“Owner”), was then eligible to apply for rent adjustments based on the costs of compliance and rent guidelines board increases. On August 15, 2005, the Owner filed an application seeking rent guidelines board increases. On February 6, 2006 the Owner also filed an application seeking rent adjustments based on the code compliance costs.
On February 27, 2006, the parties filed with the Loft Board a stipulation of settlement resolving both applications.
ANALYSIS
According to Loft Board records, the Owner registered the building on December 22, 1982 indicating that the building contained eight residential units: three units on the second floor, two units on the third floor and three units on the fifth floor. The units were identified as #2F[3], #2SE, #2SW, #3SE, #3W, #5F, #5SE and #5SW. The certificate of occupancy lists these same units as residential dwellings.
Loft Board records also indicate that the Owner purchased the rights to unit #2F on November 7, 1986 from former tenants Gladys S. Tietz Mercier and David Mercier. Therefore, pursuant to Multiple Dwelling Law §286(12), unit #2F is no longer subject to rent regulation.
Unit #2SE
On February 22, 2006, the Owner and Jim Farmer, the occupant of unit #2SE, executed a stipulation of settlement in which the parties agreed that the base rent for unit #2SE was $637.53. See, Stipulation of Settlement ¶1. Mr. Farmer elected to be governed by rent guidelines board (“RGB”) increases applicable to two-year leases. Thus, the initial legal regulated rent for this unit is $672.59. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005 to August 31, 2007. (See, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $210.36 were to be paid on March 1, 2006, (see, stipulation of settlement ¶4), and Mr. Farmer agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #2SE beginning March 1, 2006. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006, assuming the Loft Board accepts this recommendation at its March 16, 2006, meeting, and assuming the final order is mailed to the affected parties on or before March 26, 2006. See 29 RCNY §2-01(k)(1) (rent adjustments shall take effect “on the first rent payment date that occurs at least 10 days after the Loft Board has mailed a final rent adjustment order to the owner and affected residential occupants”).
Unit #2SW
On February 22, 2006, the Owner and Alan Peters, the occupant of unit #2SW, executed a stipulation of settlement in which the parties agreed that the base rent for unit #2SW was $679.32. (See, Stipulation of Settlement ¶1.) Mr. Peters agreed to be governed by the RGB increases applicable to two-year leases. Thus, the initial legal regulated rent for this unit is $716.68. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005, to August 31, 2007 (see, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $224.16 were to be paid on March 1, 2006 (see, stipulation of settlement ¶4), and Mr. Peters agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #2SW beginning March 1, 2006. See, stipulation of settlement ¶3. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006. See 29 RCNY §2-01(k)(1).
Unit #3SE
On February 22, 2006, the Owner and Gail Swithenbank, the occupant of unit #3SE, executed a stipulation of settlement in which the parties agreed that the base rent for unit #3SE was $763.92. (See, Stipulation of Settlement ¶1.) Gail Swithenbank agreed to be governed by the RGB increases applicable to one-year leases. Thus, the initial legal regulated rent for this unit is $783.02. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005, to August 31, 2006 (see, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $114.60 were to be paid on March 1, 2006 (see, stipulation of settlement ¶4), and Gail Swithenbank agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #3SE beginning March 1, 2006. See, stipulation of settlement ¶3. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006. See 29 RCNY §2-01(k)(1).
Unit #3W
On February 22, 2006, the Owner and Bernard and Constance Chodosh, the occupants of unit #3W, executed a stipulation of settlement in which the parties agreed that the base rent for unit #3W was $385.55. (See, Stipulation of Settlement ¶1.) The tenants agreed to be governed by the RGB increases applicable to one-year leases. Thus, the initial legal regulated rent for this unit is $395.18. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005, to August 31, 2006 (see, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $57.84 were to be paid on March 1, 2006 (see, stipulation of settlement ¶4), and Bernard and Constance Chodosh agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #3W beginning March 1, 2006. See, stipulation of settlement ¶3. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006. See 29 RCNY §2-01(k)(1).
Unit 5F a.k.a. Unit 5N
On February 22, 2006, the Owner and Jacqueline and Victor Gourevitch, the occupants of unit #5F[2], executed a stipulation of settlement in which the parties agreed that the base rent for unit #5F was $833.10. (See, Stipulation of Settlement ¶1.) The tenants agreed to be governed by the RGB increases applicable to two-year leases. Thus, the initial legal regulated rent for this unit is $878.92. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005, to August 31, 2007 (see, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $274.92 were to be paid on March 1, 2006 (see, stipulation of settlement ¶4), and Mr. And Mrs. Gourevitch agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #5F beginning March 1, 2006. See, stipulation of settlement ¶3. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006. See 29 RCNY §2-01(k)(1).
Unit #5SE
On February 22, 2006, the Owner and Ted Thai and Amy Berman, the occupants of unit #5SE, executed a stipulation of settlement in which the parties agreed that the base rent for unit #5SE was $686.09. (See, Stipulation of Settlement ¶1.) The tenants agreed to be governed by the RGB increases applicable to two-year leases. Thus, the initial legal regulated rent for this unit is $723.82. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005, to August 31, 2007 (see, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $227.40 were to be paid on March 1, 2006 (see, stipulation of settlement ¶4), and the tenants agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #5SE beginning March 1, 2006. See, stipulation of settlement ¶3. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006. See 29 RCNY §2-01(k)(1).
Unit #5SW
On February 22, 2006, the Owner and Terry Krueger, the occupant of unit #5SW, executed a stipulation of settlement in which the parties agreed that the base rent for unit #5SW was $686.09. (See, Stipulation of Settlement ¶1.) Mr. Krueger agreed to be governed by the RGB increases applicable to two-year leases. Thus, the initial legal regulated rent for this unit is $723.82. Further, in accordance with the settlement agreement, the term for this initial rent is September 1, 2005, to August 31, 2007 (see, stipulation of settlement ¶2).
According to the settlement agreement, retroactive RGB increases totaling $226.38 were to be paid on March 1, 2006 (see, stipulation of settlement ¶4), and Mr. Krueger agreed to pay $109 a month for 120 months as the code compliance costs rent adjustment for unit #5SW beginning March 1, 2006. See, stipulation of settlement ¶3. However, because this date has passed, these rent adjustments shall take effect on April 1, 2006. See 29 RCNY §2-01(k)(1).
ITEMS OF GENERAL APPLICABILITY
The Owner must register the building as a multiple dwelling with the New York City Department of Housing Preservation and Development (HPD) and must register the third, fourth and fifth floor units with the New York State Division of Housing and Community Renewal (DHCR) as rent stabilized units. See, 29 RCNY §2-01(m); see also, MDL §286(3).
The Owner must offer the affected units leases subject to the provisions of the Emergency Tenant Protection Act of 1974 and the Rent Stabilization Law and Code. See, MDL §286(3) and 29 RCNY §2-01(m). The monthly rent for the lease shall be the initial legal regulated rent set forth above.
RECOMMENDATION
I recommend that the Loft Board grant the instant application under the terms provided in this report. In addition, I recommend that Ackerman Holding Co. LLC., the owner of the subject building, be directed to register units #2SE, #2SW, #3SE, #3W, #5F, #5SE and #5SW with the New York State Division of Housing and Community Renewal.
______
Martha Cruz
Director of Hearings
DATED:March 14, 2006
11) Ackerman Holding Co. LLC, 118-120 Duane Street, LE-0452
Opinion of Chuck DeLaney:
As the tenant representative on the Loft Board, I concur with this opinion and order.
I congratulate both the owner and tenants for completing the work necessary to legalize this building in conformity with the Loft Law and the Loft Board’s rules. As more and more buildings reach legalization, two points are worth calling to the attention of both owners and tenants in those buildings that have completed the legalization process and received final rent orders:
1. Loft Board legalization orders are filled with a lot of figures regarding rent increases under RGB guidelines and, where the owner seeks them, increases both prospective and retroactive related to allowable code compliance pass along amounts.
Both owner and tenants should check all the figures in this order carefully to make sure that they are accurate. Any discrepancy should be called to the Loft Board’s attention immediately, and could require an application for reconsideration, which must be filed within 30 days for the mailing date of this order. Check all figures carefully.
2. Loft Board legalization orders now contain the following sentence: “Effective the date of this order, this building is no longer an IMD Building, and is no longer under the jurisdiction of the Loft Board.”
This assertion raises several questions that are significant for both owners and tenants:
Are the rights conferred by the Loft Law regarding the sale of fixtures and rights set forth in MDL 286.6 and 286.12 affected by this order? If those rights survive, what agency adjudicates those rights? Who has jurisdiction?
Owners are urged to register with HPD and DHCR. Not all owners follow the Board’s advice. Where should tenants register concerns regarding either the City’s Housing Maintenance Standards or the Board’s Minimum Housing Maintenance Standards if the owner does not move forward promptly with HPD and DHCR registration?
It might make sense for both the owner and the tenants to seek legal advice regarding any changes in the rights and responsibilities that apply to the parties with regard to this building in the future. These rights and responsibilities should be spelled out in large measure by the lease that is offered to tenants after legalization, however there are sometimes issues that come into dispute with regard to that lease. Where should those disputes be resolved?
There may be issues that need to be addressed either by the Loft Board or DHCR, or both, in order to make all aspects of this transition clear to all parties in buildings that complete the legalization process. As of this time, it is my view that these issues have not been fully addressed in situations such as this where the building has been given a final rent order in what we call an “LE” case.
1
[1] Unit 2F is also known as Second Floor North.
[2] As a point of information, the Owner must register the building with New York City Department of Housing Preservation and Development, under Multiple Dwelling Law §325, before the building can be registered with the Division of Housing and Community Renewal.
1 Unit 2F is also known as Second Floor North.
[2] According to Loft Board records, Jacqueline Gourevitch and Victor Gourevitch live in unit #5F. However, the stipulation of settlement identifies their unit as #5N. For the purposes of this report and recommendation, the unit will be identified as unit #5F.