§ 2-09 Privity, Subletting and Recovery of Subdivided Unit.
RCNY § 2-09
(a)Prime Lessee or Sublessor not in residence. The Loft Board may find a Prime Lessee or a Sublessor, either of whom does not residentially occupy an IMD unit, to be a Protected Occupant only if the individual proves that such unit is the individual's primary residence. If the individual fails to prove that such unit is a primary residence, any rights of such individual to recover the unit are extinguished.
(1)The Prime Lessee or Sublessor must exercise, in a court of competent jurisdiction, his or her right to recover the unit upon the expiration or termination of a sublease under the terms of which the Prime Lessee or Sublessor is the immediate overtenant, provided that the sublease was in effect on: (i) September 25, 1983, for a unit covered under MDL § 281(1); (ii) November 22, 1992, for a unit covered under MDL § 281(4); or (iii) September 11, 2013, for an IMD unit covered by MDL § 281(5) that became subject to Art. 7-C pursuant to Chapter 135 or 147 of the Laws of 2010.
(iv)June 25, 2019, for an IMD unit covered by MDL § 281(5) or 281(6) that became subject to Art. 7-C pursuant to Chapter 41 of the Laws of 2019.
(2)Where the sublease was no longer in effect on the relevant date above, the Prime Lessee or Sublessor must exercise, in a court of competent jurisdiction, his or her right to recover the unit on or before: (i) December 24, 1983, for IMD units that are subject to Art. 7-C by reason of MDL § 281(1); or (ii) February 21, 1993, for IMD units that are subject to Art. 7-C solely by reason of MDL § 281(4).
(iii)If the IMD unit became subject to Art. 7-C pursuant to Chapter 135 or 147 of the Laws of 2010, and the sublease is no longer in effect, the Prime Lessee or Sublessor must exercise the right to recover the unit on or before December 10, 2013, or if the unit is not subject to Art. 7-C on September 11, 2013, ninety (90) days following the finding of coverage by a Loft Board order, a finding of coverage by a court of competent jurisdiction, or the issuance of an IMD registration number after filing of a registration Application, whichever is earlier.
(b)Where a Prime Lessee is in possession of a portion of the space which he or she leased from the Landlord, such Prime Lessee is entitled to remain in possession, and is qualified for protection under Art. 7-C, only with respect to the portion of such space which he or she occupied as a Residential Unit, including any portion thereof used for home occupations or as the working portion of a joint-living-working quarters for artists. The Prime Lessee is not entitled to claim any of the remaining portion of the leased space as primary residence against the Occupant of any other Residential Unit within such space, except to the extent provided for in 29 RCNY § 2-09(c)(5) below, and subject to the provisions of 29 RCNY §§ 2-08(s)(4) and 2-09(a). The current residential Occupants of the remaining unit(s) created through subdivision are qualified for protection under Art. 7-C with regard to their respective Residential Unit(s) covered by Art. 7-C, except as provided in 29 RCNY §§ 2-08(s)(4) and 2-09(a) of these rules.
(c)Rights, obligations and legal relationships among the parties.
(i)Privity between residential Occupant and Prime Lessee. The residential Occupant qualified for protection under Art. 7-C, if other than the Prime Lessee, is deemed to be in Privity with the Prime Lessee, if either: (A) There is a lease or rental agreement in effect for the Residential Unit between the Prime Lessee and the residential Occupant; or (B) There is a lease or rental agreement in effect for the Residential Unit or the space in which it is located, between the Landlord and the Prime Lessee. No lease or rental agreement between the Prime Lessee and the residential Occupant has any force or effect beyond the term of the lease or rental agreement between the Prime Lessee and the Landlord, except as provided in 29 RCNY § 2-09(c)(6) or (c)(7).
(ii)Privity between Landlord and Prime Lessee. The Prime Lessee and the Landlord are deemed to be in Privity when there is a lease or rental agreement in effect between them.
(3)Services.
(4)Subletting rights of Occupants qualified for protection under Art. 7-C.
(5)Prime Lessee's right to recover subdivided space.
(v)Factors to consider when Prime Lessee seeks to recover subdivided space. Where the Prime Lessee is the residential Occupant of a portion of subdivided space that the Prime Lessee uses as his or her primary residence, and which the Prime Lessee has rented directly from the Landlord, the Prime Lessee is entitled to recover as part of his or her primary residence, a Residential Unit, located within the leased space, even if the space is occupied by another Person or Persons, if the Prime Lessee can establish that: (A) There was an express written agreement between the Prime Lessee and the Occupant of such space, other than the mere expiration of the lease, entitling the Prime Lessee to recover such space, and that the Prime Lessee has not taken actions inconsistent with exercising the option entitling the Prime Lessee to recover such space; (B) The Prime Lessee has occupied the entire demised premises as his or her own primary residence for at least one year before the subdivision and subletting of the unit; (C) The Prime Lessee has a compelling need to recover such space; and (D) The Prime Lessee has not been found to have harassed any residential Occupants.
(vi)Space recovered pursuant to this paragraph (5) is deemed part of the Prime Lessee's residential IMD unit, and in no event may the Prime Lessee relet any recovered space for any purpose whatsoever, except that the Prime Lessee has the same rights to sublet the entire residential IMD unit as provided in 29 RCNY § 2-09(c)(4) above, provided, however, that no such sublet is permitted for the first two (2) years after recovery. The Prime Lessee retains the right to make a claim to recover space pursuant to this provision, before the Loft Board, where there is a lease or rental agreement in effect between the Prime Lessee and the Landlord, or, where a lease or rental agreement is no longer in effect, on or before: (A) July 5, 1988 for an IMD unit subject to Art. 7-C by reason of MDL § 281(1); (B) January 22, 1993 for an IMD unit subject to Art. 7-C solely by reason of MDL § 281(4); or (C) November 12, 2013, or if the unit is not subject to Art. 7-C on the effective date of this amended rule, sixty (60) days after the finding of coverage by a Loft Board order, a finding of coverage by a court of competent jurisdiction or the issuance of an IMD registration number after the filing of registration Application by the Owner or Responsible Party, whichever is earlier, for IMD units subject to Art. 7-C by reason of MDL § 281(5); or (D) May 30, 2023, sixty (60) days after the effective date of this amended rule, or if the unit is not subject to Art. 7-C on the effective date of this amended rule, sixty (60) days following the finding of coverage by a Loft Board order, a finding of coverage by a court of competent jurisdiction, or issuance of an IMD registration number after the filing of a registration Application by the Owner or Responsible Party, whichever is earlier, for IMD units subject to Art. 7-C by reason of MDL § 281(6).
(6)Rent.
(7)Prime Lessee's or Sublessor's right to compensation for costs incurred in developing Residential Units.
(vii)(A) Compensation by the Owner or Responsible Party. A residential Occupant may offer the Landlord an opportunity to compensate the Prime Lessee or Sublessor for costs incurred for improvements made or purchased in developing a residential IMD unit. The compensation to be paid by the Landlord is the amount determined by agreement of the Prime Lessee or Sublessor, as applicable, and the residential Occupant, pursuant to subparagraph (7)(ii) above, or as determined by the Loft Board pursuant to subparagraph (7)(v) above. If the Landlord chooses to pay this compensation to the Prime Lessee or Sublessor, the residential Occupant remains the Occupant qualified for Art. 7-C protection, except that the residential Occupant will have no right to sell such improvements purchased by the Landlord pursuant to § 286(6) of the MDL. Compensation of the Prime Lessee or Sublessor by the Landlord does not affect the rent due from the residential Occupant; (B) if the Landlord compensates the Prime Lessee or Sublessor pursuant to (A) above, the Prime Lessee or Sublessor will have no right to recover the unit for his or her own personal use pursuant to 29 RCNY § 2-09(a) and (c)(5). When the residential Occupant vacates the unit, the Landlord is entitled to lease the unit at market rent, absent a finding by the Loft Board of Harassment by the Landlord of Occupants; (C) if the Landlord declines the opportunity to compensate the Prime Lessee or Sublessor, the residential Occupant remains responsible for the compensation payment established pursuant to subparagraphs (ii) or (v) above.
(8)Residential Occupant's right to sale of improvements pursuant to MDL § 286(6). In accordance with MDL § 286(6) and the Loft Board rules, a residential Occupant is entitled to sell all improvements to the unit made or purchased by the residential Occupant: (i) Upon filing an agreement with the Loft Board pursuant to 29 RCNY § 2-09(c)(7)(ii), or (ii) Following a Loft Board determination of an Application filed pursuant to 29 RCNY § 2-09(c)(7)(iii), or (iii) Upon the expiration of the deadline for filing an Application, if none has been filed. (Amended City Record 3/1/2023, eff. 3/31/2023)
