On February 15, 2022, the Court of Appeals issued a landmark decision in Aurora Associates LLC v. Locatelli, holding, inter alia, that an interim multiple dwelling (“IMD”) subject to a Loft Law sale of rights pursuant to Multiple Dwelling Law (“MDL”) § 286(12) is permanently exempt from all forms of rent regulation, including the rent stabilization provisions of the ETPA (absent narrow exceptions). The Aurora decision is a great win for owners of IMD buildings and now provides certainty that if a Loft Law-protected occupant agrees to sell its rights to the unit, the unit is deregulated, and the owner is free to use the unit as it sees fit – either as a commercial/manufacturing unit or as a residential apartment at free market rent.
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