§ 2-07 Sales of Improvements.
RCNY § 2-07
(a)Definitions. For the purposes of this section, the following definitions apply unless context clearly indicates otherwise.
(1)Fair market value means: (i) A bona fide offer by a prospective incoming tenant to purchase improvements made or purchased by an outgoing Tenant qualified for protection under Art. 7-C is presumed to represent the fair market value of the improvements.
(ii)The presumption in (i) above may be rebutted if the Owner or Responsible Party challenges the value in accordance with 29 RCNY § 2-07(g), in which case the fair market value will be determined by the Loft Board in accordance with 29 RCNY § 2-07(g).
(iii)If no such offer is made or available, the value shall be established by agreement of the parties or pursuant to an Application to the Loft Board, which shall determine the value in accordance with the criteria and procedures set forth in this rule.
(2)Improvements means the fixtures, alterations and development of an IMD unit which were made or purchased by a residential Tenant who is qualified for protection under Art. 7-C.
(i)Fixtures are appendages permanently fixed or attached to real property, including, but not limited to, the following: kitchen installations, such as stoves, sinks, counters, and built-in cabinets; bathroom installations, such as sinks, toilets, bathtubs, and showers; other installations, such as partitions, ceilings, windows, and floors, including tiling; built-in shelves; plumbing and utility risers; electrical work; heating units; and hot water heaters.
(3)Unit, as referred to in this section, means: (i) A Residential Unit in an IMD Building, as defined by MDL § 281 and these rules, which is registered with the Loft Board or granted coverage by the Loft Board or a court of competent jurisdiction; or (ii) For the purposes of sales of improvements governed by this section only, a unit formerly registered as an IMD unit, but which has subsequently been legalized and removed from the Loft Board's jurisdiction.
(b)Applicability. This section applies to sales which occur on or after March 23, 1985, except that the definition of the term "fair market value," provided in subdivision (a) of this section, applies only to sales of improvements where a Disclosure Form has been filed with the Loft Board on or after February 16, 1996.
(c)Procedure for sales of improvements to prospective incoming tenant.
(d)Owner's or Responsible Party's response to offer and prospective incoming tenant.
(iv)If the Owner's or Responsible Party's challenge is based on the unsuitability of the prospective tenant, the Owner or Responsible Party may only initiate an action based on that ground in a court of competent jurisdiction. If an action is brought pursuant to this subparagraph, the Owner or Responsible Party must inform the Loft Board in writing within twenty (20) days after service of the Disclosure Form or delivery of the additional information requested, if any.
(4)Owner's or Responsible Party's purchase of improvements.
(e)Reserved.
(f)Notice between parties: form and time requirements.
(5)Communications by the Loft Board pursuant to this section will be sent by regular mail to the addresses indicated in paragraph (2) above.
(g)Applications challenging proposed sale of improvements.
(v)The outgoing Tenant's answer must include three (3) available dates and times during regular Business Hours within ten (10) days of the date of filing of the answer with the Loft Board during which the improvements will be available to be inspected by a Loft Board-appointed appraiser in accordance with subparagraph (vi).
(vi)The appraiser shall be appointed by the Loft Board, must be suitably qualified in valuing improvements and must be a Registered Architect, a Professional Engineer or a New York State Certified General Real Estate Appraiser.
(vii)The Board shall also notify the Owner or Responsible Party, outgoing Tenant and prospective incoming tenant of an inspection date at one of the times designated by the outgoing Tenant, or at another time fixed by the Board if none of the proposed dates is mutually convenient. Following the inspection, a copy of the appraiser's findings will be mailed to the three parties. A conference or hearing date must be scheduled no fewer than eight (8) days nor more than fifteen (15) days from the mailing of the notice of conference or hearing or, if applicable, the filing of the appraiser's report. There may be no more than one (1) adjournment per party, limited to seven (7) days, for good cause shown. Except as provided in these rules, the requirements of the Loft Board's rules regarding Applications apply.
(viii)If a challenge Application results in an order by the Loft Board determining that the offer constitutes fair market value, the Owner or Responsible Party may exercise the right to purchase improvements at that price. If the Loft Board determines that the offer does not constitute fair market value, in accordance with 29 RCNY § 2-07(g)(2), the Owner or Responsible Party may exercise the right to purchase the improvements at the price determined to constitute fair market value. The Owner or Responsible Party must notify the outgoing Tenant within ten (10) days of service of the Loft Board's order determining fair market value of the Owner's or Responsible Party's intent to purchase at such price less half the cost of the appraisal and must consummate the purchase within ten (10) days of the Owner's or Responsible Party's notice to the outgoing Tenant, except that where the fair market value determination is less than the price offered by the outgoing Tenant, the outgoing Tenant may decline to sell the improvements. The Loft Board's order determining fair market value constitutes the price at which the outgoing Tenant must first offer to sell the previously offered improvements to the Owner or Responsible Party for a period of two (2) years from the date of the Loft Board order.
(ix)If the Owner or Responsible Party elects not to purchase the improvements at the Loft Board-determined fair market value, the outgoing Tenant may sell to the prospective incoming tenant, without challenge by the Owner or Responsible Party to the fair market value of the offer. The Owner's or Responsible Party's failure to consummate a purchase, following notice of intent to purchase, within the period prescribed above, is deemed an election not to purchase.
(h)Deadline Extensions on consent and change of address. Deadlines set in this rule may be modified, Applications may be withdrawn, and disputes may be resolved, by written agreement of the parties, subject to Loft Board written approval. Parties may change their address upon service of written notice to the Loft Board and the other Affected Parties, as defined in 29 RCNY § 2-07(g)(3) above. Notice is effective upon personal delivery or five (5) days following service by mail.
(j)Effect of sale: filling the sale record with the Loft Board.
