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New York City Loft Board
Loft Board Units

Legalization Unit

The Legalization Unit tracks the progress of the construction work required for the conversion of IMD buildings from commercial/manufacturing to residential spaces and mediates disputes between landlords and tenants concerning renovation plans. The unit oversees the Narrative Statement process, investigates and monitors owners' progress during the work phase of a building's legalization, and processes requests for Loft Board certification and Letters of No Objection.

Code Compliance Deadlines under §§ 281(1) and 281(4) of the Multiple Dwelling Law
Owners are required to complete the work phase of the legalization process according to the following timetable:

  • File an Alteration Application by September 1, 1999
  • Obtain a Permit by March 1, 2000
  • Achieve Article 7-B Compliance by June 1, 2012 (or 12 months after getting a building permit, whichever is later), and
  • Obtain a Certificate of Occupancy by July 2, 2012 (or 12 months from 7-B compliance, whichever is later).

Code Compliance Deadlines under § 281(5) of the Multiple Dwelling Law

  • File an Alteration Application by March 21, 2011
  • Obtain a Permit by June 21, 2011
  • Achieve Article 7-B Compliance by December 12, 2011 (or 12 months after getting a building permit, whichever is later), and
  • Obtain a Certificate of Occupancy by June 21, 2013 (or 12 months from 7-B compliance, whichever is later).

Extension of time to comply with the legalization timetable
An owner may apply to the Loft Board for an extension of time to comply with each of the above legalization timetable deadlines. The Loft Board will grant an extension only where an owner has demonstrated that the need for an extension arises from conditions or circumstances beyond the owner's control. Section 2-01(a)(6)(b) of the Loft Board's rules governs the procedures for extension applications.

FAQs
Will an owner be reimbursed for the costs of legalizing an IMD building?
Protected residential tenants in IMD units are required to compensate owners for the necessary and reasonable costs of legalizing their own residential units and the common areas of the building. The compensation takes the form of rent increases payable over 10 or 15 years (depending on whether the owner is seeking to be reimbursed for the costs of financing the legalization work).
 
An owner may file for rent adjustments based on the costs of code compliance when the building is certified to be in compliance with Multiple Dwelling Law ("MDL") Article 7-B, when a residential certificate of occupancy has been issued, or both. Under § 2-01(i)(2)(ii) of the Loft Board's rules, the owner must file for such rent adjustments within nine months after obtaining a residential certificate of occupancy, or February 1, 2000, whichever is later. Failure to do so results in the owner being deemed to have waived the right to the code compliance rent adjustment.
 
All necessary and reasonable costs of bringing an IMD building into compliance with MDL Article 7-B may be passed along to tenants in accordance with the Loft Board's schedule of costs (see § 2-01(p) of the Loft Board's rules). The schedule is indexed annually to more accurately reflect current costs. A rent adjustment for an item not contained in the schedule will not be permitted unless an owner can demonstrate that the item is necessary and reasonable for legalizing the building.
 
An owner seeking rent adjustments based on the costs of code compliance must file an application containing, among other things, copies of paid bills, canceled checks, or receipts for work performed, and copies of construction contracts.

The owner has the choice of having the Loft Board audit the application or having it pre-certified by a CPA and an architect or engineer. In either case, every expense of legalization for which reimbursement is sought must be substantiated. The residential IMD tenants are given the opportunity to respond to the owner's application. The Loft Board makes the final determination, setting the code compliance rent adjustments in a final order.

How does an owner get Loft Board certification?
Loft Board certification is available to an owner when (1) the legalization plans have been finalized, (2) the owner has verified that there have been no changes to the plans that was last presented in the narrative statement process and (3) the owner has filed with the Loft Board a cleared objection sheet from the New York City Department of Buildings ("DOB").

Legalization plans may be finalized by agreement between the parties, or where there is no agreement on the legalization plans, by determination of the Loft Board.  Generally, where the parties are unable to agree on the plans to be used for converting the building to legal residential use, the Loft Board will give the tenants forty-five days to file alternate plans with the DOB, or to file an unreasonable interference claim in which the tenants assert that the owner's plans would unreasonably interfere with the tenants' use of the premises. 

If the forty-five days expire and the tenants have not filed alternate plans and have not filed an unreasonable interference claim, then the owner's plans will be deemed the final plans and, provided the owner has complied with (2) and (3) above, Loft Board certification will be issued.
 
If an "unreasonable interference claim" has been filed, the matter will be adjudicated and the Loft Board will issue a decision on the claim.  If the decision is to uphold the claim, the owner will be directed to change the legalization plans accordingly and the amended plans will be the final plans.  If the decision is to deny the claim, then the owner's plans will be deemed the final plans. Similarly, if the tenants have filed alternate plans with the DOB and those plans are approved by the DOB, the Loft Board may initiate a proceeding to determine which set of plans should be deemed the final plans.  The issue in the proceeding is whether the owner's plans would unreasonably interfere with the tenants' use of the premises and the outcome of the case would follow the same course as a tenant-initiated unreasonable interference case.

How does an owner get a Letter of No Objection from the Loft Board?
Letters of No Objection are required for all work in IMD buildings.  The New York City Department of Buildings requires a Loft Board "Letter of No Objection" for all proposed work in IMD buildings, whether the owner or a tenant proposes the work. To get the letter from the Loft Board, an owner must be in compliance with all Loft Board rules. Specifically, (1) the IMD registration must be current, (2) all fines must be paid (or an agreement for payment must have been executed and the owner must be in compliance with the agreement), and (3) the owner must demonstrate that all reasonable and necessary steps are being taken to legalize the IMD units in the building. In addition, if the building already has a final certificate of occupancy, the owner must submit all necessary filings to have the building removed from the Loft Board's jurisdiction before a Letter of No Objection will be issued.

Related Forms
Certification of Article 7-B Compliance
Request for Narrative Statement Certification
Waiver of Loft Board's Narrative Statement Process
Extension Application

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