BBG News

Significant Win for IMD Owners: Defeating a Loft Law Coverage Application

May 20, 2024

In a significant win for IMD (Interim Multiple Dwelling) owners, our Firm successfully defeated a Loft Law coverage application where the applicant failed to demonstrate that his unit had sufficient residential indicia to warrant Loft Law protection. This outcome is noteworthy as it is rare for Loft applications to be denied in today’s landscape. ***

Understanding Loft Law

For those unfamiliar with Loft Law, it provides a form of rent regulation while also requiring owners to obtain new and final residential certificates of occupancy. To be covered under the Loft Law, tenants must prove, inter alia, that the building was occupied for residential purposes as the residence or home of any three or more families living independently from one another for a period of twelve consecutive months during a specific window period—in this case, from January 1, 2015, through December 31, 2016. Upon legalization, tenants become rent-stabilized tenants.

The Case at Hand

In this particular case, the applicant sought Loft Law coverage for three units: the 3rd, 4th, and 5th floors of the building. Although we did not dispute the residential occupancy of the 3rd floor, we contested the residential occupancy of the 4th and 5th floors. The applicant testified that he resided on the 4th floor in 2015 and moved to the 5th floor on January 1, 2016.

Key Evidence and Findings

The building had a vacate order for the 5th floor starting midway into 2014. Through records obtained from the Department of Buildings (DOB), we demonstrated that the vacate order was not lifted until June 23, 2016. As a condition of removing the vacate order, the DOB required the 5th floor to be converted back to commercial use, which involved the removal of all residential fixtures and the creation of a white box commercial space, as this was the pre-existing legal use.

While a vacate order is not an automatic bar to Loft Law coverage, the evidence in this case clearly demonstrated that the unit lacked essential residential features such as a kitchen and a bathroom during the window period. Furthermore, the applicant failed to prove that he moved into the 5th floor on January 1, 2016. The OATH judge found the applicant’s testimony to be not credible, especially considering other evidence and witness testimonies indicating that the applicant did not live there during the period in question. Notably, the applicant himself admitted that he did not install a kitchen or bathroom until after the vacate order was lifted.

The Three-Family Rule

An essential aspect of this case was the three-family rule. We argued that since the applicant resided on the 4th floor in 2015 and the 5th floor in 2016, he did not satisfy the requirement of “three or more families living independently from one another.” The OATH judge ruled:

“However, I did not find credible petitioner’s claim that he occupied the fifth-floor unit for 12 months in 2016. But even if it were credible, petitioner’s claim must fail because as a matter of law, petitioner cannot count twice as a residential occupant of two different units for the purpose of coverage. By the plain language of the statute, petitioner as one person cannot be multiple separate families under the Loft Law, which considers a family to be ‘either a person occupying a dwelling and maintaining a household…or two or more persons occupying a dwelling, living together and maintaining a common household.'”


While Loft Law applications are rarely denied, this victory highlights the importance of rigorous evidence and thorough legal arguments in defending the rights of IMD owners. This decision reinforces the need for applicants to meet all statutory requirements and demonstrates that not all claims for Loft Law coverage will automatically succeed.  To read a copy of the entire decision, click here: 22-2965 – Matter of Cohen – RR May 20_24(4544787.1).

***Note, this is a Report and Recommendation issued by the Administrative Law Judge at the Office of Administrative Trials and Hearings. This is not a final agency determination.  The Loft Board may accept, reject, defer or modify the disposition recommended by the OATH Judge.

About Our Loft Law Practice Group

Our Loft Law practice group provides comprehensive legal counsel on all aspects of Loft Law, with a focus on coverage, protection, and legalization. Our experienced team navigates projects from the initial stages of legalization to obtaining a residential certificate of occupancy, guiding clients through the intricate processes of the New York City Loft Board. We regularly represent clients before the NYC Loft Board, the Department of Buildings, and other regulatory agencies. Our services include due diligence for the purchase and sale of Loft Law buildings, assessments of Loft Law coverage and protection issues, Loft Board enforcement, and drafting agreements pursuant to Multiple Dwelling Law §§ 286(6) and (12). We also handle the Narrative Statement Process, obtain Letters of No Objection, and manage trials, appeals, and agreements related to access and protection for legalization purposes.

Contact Us

For more information about this decision and how it may impact your own case(s), please do not hesitate to contact us.


Written by:  Michael Bobick, Partner, Loft Law

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