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New York City Loft Board
What Owners Should Know

The Loft Law imposes specific obligations on all IMD owners. The most important of these obligations is the requirement that the owner meet certain statutory deadlines in converting the IMD building to legal residential premises. Additionally, the Loft Law confers certain benefits on IMD owners, such as the right to receive statutory rent increases as each code compliance deadline is reached, and the right to recoup certain costs incurred as a result of the legal conversion of the building.
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 1 month from 7-B compliance, whichever is later).

Code Compliance Deadlines under § 281(5) of the Multiple Dwelling Law as a result of the 2010 amendments to the Loft Law

  • File an Alteration Application by March 21, 2011
  • Obtain a Permit by June 21, 2011
  •  Achieve Article 7-B Compliance by 18 months after getting an approved alteration permit, and
  • Obtain a Certificate of Occupancy by December 21, 2012.

Code Compliance Deadlines under § 281(5) of the Multiple Dwelling Law as a result of the 2013 amendments to the Loft Law

  • File an Alteration Application by June 11, 2014
  • Obtain a Permit by September 11, 2014
  •  Achieve Article 7-B Compliance by 18 months after getting an approved alteration permit, and
  • Obtain a Certificate of Occupancy by March 11, 2016

Extension of time to comply with the Code Compliance Deadlines
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. Owners should note that a tenant's refusal to provide an owner access to perform legalization work in an IMD unit will not constitute an appropriate basis for granting an extension for complying with the legalization deadlines where the owner has failed to initiate an access application against the tenant to gain access. Section 2-01(a)(6)(b) of the Loft Board's rules governs the procedures for extension applications.

Rent Increases
The Loft Law authorizes an owner to collect rent and to sue tenants in a court of competent jurisdiction for the non-payment of rent. In addition, the Loft Law allows an owner to increase an IMD tenant's rent by 3% upon the owner's filing of an alteration application, by 3% upon the owner's obtaining an alteration permit, and by another 4% upon the owner's achievement of Article 7-B compliance. Once an owner obtains a certificate of occupancy for the IMD building, the owner may apply for rent adjustments based on the costs incurred for legalizing the building.

Rent Adjustments
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. Failure to do so results in the owner being deemed to have waived the right to the code compliance rent adjustment.

Rent adjustments based on legalizing an IMD building (code compliance costs) fall into two categories: (1) prospective increases and (2) retroactive increases. Prospective increases are calculated by dividing the total allowable costs of code compliance for each IMD unit and dividing that sum over a period of 120 or 180 months, depending on whether the owner is seeking reimbursement for the financing of the construction work.

Code compliance rent adjustments are retroactive to the first day of the month following the date of the issuance of the final certificate of occupancy for the building. The retroactive apportionment takes effect on the first rent payment date that occurs at least ten days after the Loft Board has mailed a final rent adjustment order to the owner and the affected residential occupants. To determine the total amount of retroactive code compliance costs the owner may recoup, the Loft Board multiplies the amount of the prospective code compliance increase by the number of months in the applicable retroactive period. This sum may be paid in one lump payment, or it may be paid monthly, at the tenant's election. If the tenant elects to pay the retroactive amount on a monthly basis, the amount of each monthly payment is calculated at a rate equal to 20 percent of the base rent.

The Loft Law requires every IMD tenant, upon appropriate notice regarding the timing and scope of the work to be performed, to provide the owner reasonable access to their units so that the work necessary for legalization of the unit can be carried out.

Access also must be provided, again upon appropriate notice, to allow inspections and surveys of an IMD unit, as may be required for the purpose of legalization.
Upon the failure of an IMD occupant to provide such access, the owner may apply to the Loft Board for an order directing the tenant to give the owner reasonable access to the unit. Access applications will be processed via expedited procedures. The failure of a tenant to comply with a Loft Board order regarding access shall be grounds for eviction of that occupant in a proceeding brought before a court of competent jurisdiction.
The Loft Board rules governing access issues are set forth in § 2-01(g) of the Loft Board rules.

Annual Registration of IMD
Owners of IMD buildings are required to register their buildings by June 30th of each year that it is covered under Article 7-C of the Multiple Dwelling Law, until the building is removed from the Loft Board’s jurisdiction.  Registration fees are $500 per residential IMD unit.  If an owner fails to submit the annual renewal registration application and fee by July 31st, the Loft Board will assess the owner a late filing fee of $25 for the month of July for each residential IMD unit.  Thereafter, the Loft Board will assess the owner an additional late filing fee of $5 per residential  IMD unit until the date when the application is submitted and the fee is paid.

2-11(b)(1)(i) to Increase the Registration Fee

Related Forms
Access Application
Certification of Article 7-B Compliance
Extension of Code Compliance Deadlines Application
Legalization Process - Guide to Owners

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