§ 2-10 Sales of Rights.
RCNY § 2-10
(a)Right to sell and the limitations on an Occupant's right to sell.
(1)The Right to Sell. The residential Occupant of an IMD unit may sell the rights afforded such Occupant pursuant to Art. 7-C, to the Owner of the IMD or the Owner's authorized representative, including a net lessee, in accordance with the terms of MDL § 286(12) and these rules. A sale pursuant to MDL § 286(12), after the effective date of the relevant provision of MDL § 281, as provided in 29 RCNY § 2-10(a)(2) below, constitutes a sale to the Owner of all of the Tenant's rights in the unit.
(2)Limitations.
(i)No sale or agreement made before the following dates in which an Occupant purported to waive rights under the Art. 7-C will be given any force or effect: (A) June 21, 1982 for units subject to Art. 7-C pursuant to MDL § 281(1), (B) July 27, 1987 for units subject to Art. 7-C solely pursuant to MDL § 281(4), or (C) June 21, 2010 for units covered under MDL § 281(5), or (D) June 25, 2019 for units covered by MDL § 281(6) that became subject to Art. 7-C pursuant to Chapter 41 of the Laws of 2019.
(ii)For any sale made pursuant to MDL § 286(12), the unit subject to a sale of rights may not be the subject of another sale pursuant to MDL § 286(12); nor may such unit be the subject of a subsequent sale of improvements pursuant to MDL § 286(6).
(b)Filing requirement for sales which occur on or after the effective date of these Rules.
(3)The Loft Board's approved form must be signed by the Owner or its authorized representative and the Occupant or an Occupant's authorized representative who sold rights to the unit. Except for sales between the Owner or its representative and a representative of a deceased Occupant's estate, the Occupant must be residing in the unit at the time of the sale. Sales occurring after an Occupant has vacated the unit are invalid.
(4)Except as provided in subdivision (c) below, failure by the Owner or Responsible Party to file a sales record form within thirty (30) days of the date of the sale may subject the Owner to a civil penalty as determined by the Loft Board in 29 RCNY § 2-11.1.
(c)Filing requirement for sales which occurred before the effective date of these rules.
(d)Effect of sales.
(iii)Prior to approval by the Loft Board, in accordance with 29 RCNY § 2-10(d)(1)(ii), the owner remains subject to all the requirements of Article 7-C, these rules, and orders of the Loft Board, including the legalization requirements of MDL § 284.
(iv)When the conversion of a unit to a non-residential conforming use reduces the number of IMD units below three or two, as provided by MDL § 281(5), the IMD status for the building and for the remaining IMD units in the building, and the protections provided in Article 7-C to the protected occupants will not be eliminated.
(v)Notwithstanding the provisions of 29 RCNY § 2-01(l), if conversion of a unit to a non-residential conforming use increases the costs of legalization under MDL § 284 for the remaining IMD units, the additional increased costs must be paid by the owner and may not be passed through to the remaining residential occupants pursuant to Article 7-C and these Rules.
(e)[Reserved.] (f) Abandonment of IMD unit.
(5)In determining whether abandonment has occurred as a result of the death of an IMD occupant as set forth in subparagraph (ii) of paragraph (2) above, proof of the occupant's death must be made by the presentation of a death certificate, or any other trustworthy evidence. The heir, beneficiary, administrator, or executor of the occupant's estate, as applicable, is an affected party in a case where an owner seeks an abandonment finding based on the death of an IMD occupant.
(6)If the owner's application alleging abandonment is granted by the Loft Board and if the unit is to be used for non-residential purposes, the owner or its authorized representative must comply with 29 RCNY § 2-10(d)(1).
(7)(i) Upon compliance with these specified provisions of 29 RCNY § 2-10(d)(1) with regard to units determined to be abandoned and used for non-residential purposes, the legal effect of the Loft Board's determination of abandonment is the same as that of a sale of rights as provided in 29 RCNY § 2-10(d).
(8)If an IMD unit becomes vacant without a prior sale of rights or improvements and subparagraph (i) of paragraph (7) does not apply, and the owner fails to meet either the criteria set forth in 29 RCNY § 2-10(f)(7)(ii)(A) or the criteria set forth in 29 RCNY § 2-10(f)(7)(ii)(B), the unit must remain residential and the owner is not permitted to re-rent the unit at a market rate to the incoming tenant. Additionally, the owner must provide any incoming tenant(s) with written notice that the rent for the IMD unit may increase to a market rate if and when the owner complies with the criteria set forth in 29 RCNY § 2-10(f)(7)(ii)(A) or 29 RCNY § 2-10(f)(7)(ii)(B). The written notice to an incoming tenant or tenants must include a copy of this subdivision (f) and a copy of the Loft Board order granting the abandonment application, if any. If an owner re-rents the unit at a market rate in violation of this provision, the incoming tenant(s) may challenge such rent by filing an application alleging a rent overcharge with the Loft Board.
(9)Paragraphs (3) and (8), and the amendments to paragraph (7) of this subdivision (f), made effective on October 8, 2006 apply only to those IMD units for which applications alleging abandonment are filed after April 8, 2007. (Amended City Record 3/1/2023, eff. 3/31/2023)
