Matter of 1314 Development, LLC

6

Matter of 1314 Development, LLC.

OATH Index No. 1804/07 (June 21, 2007)

[Loft Bd. Dkt. No. LB-0164; 18-20 E. 14th Street, New York, N.Y.]

The owner filed an application seeking a finding of abandonment for one unit of the subject building. ALJ denied the application because the owner did not name all of the affected parties and failed to present enough evidence to establish that the unit has been abandoned.

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NEW YORK CITY OFFICE OF

ADMINISTRATIVE TRIALS AND HEARINGS

In the Matter of

1314 DEVELOPMENT, LLC.

Applicant

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REPORT AND RECOMMENDATION

KARA J. MILLER, Administrative Law Judge

This is an abandonment application brought by petitioner, 1314 Development, LLC., the owner of the interim multiple dwelling at 18-20 E. 14th Street, New York, New York (“the building”), pursuant to section 282 of the Multiple Dwelling Law, and section 2-10(f) of the Loft Board’s Rules. Petitioner seeks a declaration that the third floor unit of the building has been abandoned.

The application was filed with the Loft Board on September 25, 2006, and served upon the listed parties by mail on January 24, 2007. No answers were filed. The Loft Board referred the matter to this tribunal for a hearing and report. A combined notice of trial and notice of default was served on all listed parties on April 4, 2007. The notice of default informed those who failed to answer the application that they would be barred from participating in the proceeding unless they moved to vacate their default within 30 days. The combined notice was served by mail to former covered occupant, Ceil Meredith and current occupant, Damien Reidel. No party moved to vacate the default and no one appeared at the hearing other than petitioner’s attorney and petitioner’s witness, Gina Vigna. Accordingly, the hearing was held as an inquest on May 15, 2007, at which time the record was closed.

For the reasons set forth below, the application should be denied.

ANALYSIS

On July 15, 1983, Ceil Meredith, a residential occupant of the third floor unit of the building, filed an application seeking coverage under the Loft Law. Ms. Meredith stated in the application that she had been a residential tenant of the third floor unit since May 1975 (Pet. Ex. H). The application was granted on October 24, 1984. The Loft Board deemed the premises at 20 East 14th Street an interim multiple dwelling (“IMD”), and the third floor unit a covered unit. Matter of Meredith, Loft Bd. Order No. 127 (Oct. 24, 1984).

In the present proceeding, petitioner seeks a finding of abandonment for the third floor unit of the building. It acquired ownership of the building by deed dated June 2, 1998. Petitioner claimed that the third floor was vacant at the time of purchase, and that records from the prior owner did not reveal the whereabouts of a prior third floor tenant (Tr. 4, 7; Pet. Ex. A). Gina Vigna, the building manager, testified that petitioner has no record of anyone living in the third floor unit prior to May 2000 (Tr. 10).

Controlling on the issue of abandonment is section 2-10(f) of the Loft Board rules which reads, in pertinent part, as follows:

(f) Abandonment of IMD unit. (1) An owner or its authorized representative may apply to the Loft Board for a determination that the occupant of an IMD unit has abandoned the unit and no sale of rights pursuant to Multiple Dwelling Law

§ 286(12) or sale of fixtures pursuant to Multiple Dwelling Law § 286(6) has been executed, provided there has been no finding of harassment as to any occupant(s) of the unit which has not been terminated pursuant to § 2-02(d)(2) of the Board’s Harassment Regulations.

29 RCNY § 2-10(f) (Lexis 2007).

Under the Loft Board’s rules, abandonment is defined as “the voluntary relinquishment of possession of a unit and all rights relating to a unit with the intention of never resuming possession or reclaiming the rights surrendered.” 29 RCNY 2-10(f)(2). One factor used to determine whether the unit has been abandoned is the length of time that the unit has been vacant. Other factors include whether: rent was owed at the time of alleged abandonment; the occupant’s lease had expired; the occupant provided notice of an intent to vacate; the unit

contained improvements; the Loft Board made any harassment findings; violations or notices to appear pursuant to Loft Board Minimum Housing Maintenance Standards were issued; the owner made affirmative efforts to locate the occupant to attempt to purchase rights or improvements; and inspection of the unit indicates that it is presently vacant. See 29 RCNY 2-10(f)(3)[1]; Matter of Windsor Construction Assoc., OATH Index No. 310/07 (Dec. 12, 2006); Matter of Henry Street Realty, LLC, OATH Index No. 550/05, at 3 (Dec. 20, 2004), adopted, Loft Bd. Order No. 2890 (Jan. 20, 2005).

Petitioner maintained that the third floor unit was vacant when it acquired the building in 1998. In preparation for this proceeding, petitioner hired Rebus International, a private investigator, to locate Ms. Meredith (Tr. 4; Pet Ex. I). Rebus’ search uncovered six addresses for Ceil M. Meredith, four in New York and two in New Jersey (Pet. Ex. I.). Petitioner sent general inquiry letters to each address in an attempt to contact Ms. Meredith, all to no avail (Pet. Ex. E). Petitioner submitted copies of the returned envelopes from the four New York addresses (Pet. Ex. D), and represented that it had received no response from the two New Jersey addresses.

In addition, petitioner reviewed the Loft Board files for this building and represented that no purchase or sale of rights or fixtures were indicated. Furthermore, there was no evidence that Ms. Meredith had made any improvements to the subject unit. Petitioner contended that no harassment application is currently pending and that it was unaware of harassment findings regarding Ms. Meredith or any subsequent tenants in the building (Tr. 11; Abandonment Application at 3).

To further substantiate that the third floor unit was abandoned, petitioner submitted a copy of former owner’s IMD Registration Renewal Application (“Renewal Application”) dated November 8, 1993. The Renewal Application states that the third floor unit was vacant on the filing date (Pet. Ex. F). In its response to the Renewal Application, the Loft Board noted that although the third floor unit was vacant, deregulation of the unit was not automatic (Pet. Ex. G). There was nothing in the record indicating that the former owner of the building filed for

abandonment of the subject unit. Relying on the above records, petitioner argued that the last covered tenant had not resided in the third floor unit since 1993 or earlier, at least fourteen years ago (Tr. 11).

I find that petitioner did not provide sufficient evidence as to the factors listed in 29 RCNY 2-10(f). It is the owner’s burden to prove abandonment by a preponderance of the evidence. See Windsor Construction Assoc., OATH 310/07, at 5; Matter of 70 W. 38th Street. Co., OATH Index No 933/00 (May 18, 2000), adopted, Loft Bd. Order No. 2533 (June 29, 2000). Here, there is no evidence as to the circumstances under which Ms. Meredith left the unit. Since petitioner waited eight years to apply for abandonment, evidence as to Ms. Meredith’s whereabouts was apparently difficult to obtain. Where an owner claims that an IMD occupant vacated before he or she purchased the building, it is important to the abandonment inquiry that the owner “describes his attempts to contact previous owners to obtain any relevant information concerning the circumstances surrounding the departure of the unit’s occupants.” Matter of 117 Hester Realty, LLC, Loft Bd. Order No 3139, at 2 (Jan. 18, 2007). Here, petitioner gave no indication that it actually contacted the previous owner or tenants of the building to retrieve information regarding prior IMD occupants. Furthermore, petitioner presented nothing to demonstrate whether Ms. Meredith had owed rent at the time she vacated the unit or that she had sent any notice of an intent to vacate.

Petitioner assumed that Ms. Meredith voluntarily gave up her rights to the unit without obtaining any evidence as to her departure. Petitioner also assumed that the third floor unit remained vacant since 1993 based on the former owner’s 1993 Renewal Application. However, there was no evidence as to who, if anyone, resided in the third floor unit between 1993 and 1998, when petitioner took over the building. To grant petitioner’s application based on missing information and speculation would create an assumption that abandonment occurred merely because there was an unexplained absence. Windsor Construction Assoc., OATH 310/07, at 5.

In addition to failing to prove that Ms. Meredith voluntarily vacated the unit and relinquished her rights, petitioner failed to provide notice to all affected parties as required under the Loft Law. Ms. Vigna testified that during petitioner's ownership of the building, the third floor unit has been occupied by four tenants - David Lane (May 1, 2000 - March 31, 2002), Robert Kropf (April 1, 2002 - May 31, 2002), Stuart Barry Smythe (July 8, 2002 - July 31,

2005), and Damien Reidel (August 1, 2005 - Present). All of these tenants lived in the building as residential tenants and had leased the unit directly from petitioner (Pet. Ex. K; Tr. 7, 10, 11).

Pursuant to 29 RCNY 1-06(a), an applicant is required to list, “to the best of his or her knowledge, all affected parties when filing his or her application.” For abandonment applications, affected parties include “the owner and such occupants as are necessary for a final resolution of the claims asserted in the application.” 29 RCNY 1-06(a) (LEXIS 2007); Matter of EPDI Associates, Loft Bd. Order No. 3189 (May 17, 2007); Matter of 43 Crosby Street, LLC, Loft Bd. Order No. 3124 (Nov. 16, 2006). In 43 Crosby Street, LLC, the owner applied for abandonment of two units and listed the original IMD occupants and the owner as the only affected parties. The Loft Board found the application defective because the owner did not list subsequent occupants of the units as affected parties, even though their identities were revealed in Loft Board records. Here, notice was given to the current tenant, Reidel, but petitioner failed to notify the previous three tenants, Mr. Lane, Mr. Kropf and Mr. Smythe. What makes this failure more egregious is that petitioner did not even have to search Loft Board records to discover this information since it was readily available in its own files. Petitioner was actually a party to the leases.

In conclusion, although petitioner has shown that the unit was vacant at some point in time and that there is no evidence of harassment, petitioner’s proof falls short of establishing that Ms. Meredith or any subsequent tenant surrendered their rights voluntarily. Matter of 117 Hester Realty, LLC, OATH Index. No. 2026/06 (Sept. 26, 2006), adopted, Loft Bd. Order No 3139 (Jan. 18, 2007) (Application not granted where former owners never alleged unit was abandoned, current owner waited four years to apply for abandonment and where no evidence established how many covered occupants resided in the unit or why occupants left ). Accordingly, I find petitioner failed to meet its burden.

FINDINGS AND CONCLUSIONS

1. Petitioner has not proven by a preponderance of the evidence that the third floor unit has been abandoned.

2. Petitioner failed to notify all affected parties when filing its abandonment application.

RECOMMENDATION

I recommend that the abandonment application be denied.

Kara J. Miller

Administrative Law Judge

June 21, 2007

SUBMITTED TO:

MARK RAUCH

Chairperson

APPEARANCES:

BELKIN BURDEN WENIG & GOLDMAN, LLP.

Attorneys for Petitioner

BY: AMANDA N. NELSON, ESQ.

No appearance for Respondent.

[1] 1Amendments to section 2-10(f) of Title 29 of the Rules of the City of New York were published on September 8, 2006, and went into effect on October 8, 2006. See NYC Charter 1043(e). The amended rule applies only to abandonment applications filed six months after the effective date. 29 RCNY 2-10(f)(9) (LEXIS 2007). Thus, the amendments do not apply to this application, filed in September of 2006.