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Judge Revokes Fraudulent Loft Certificate of Occupancy

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Judge Revokes Fraudulent Loft Certificate of Occupancy

Postby consigliere » Sat Apr 13, 2002 6:02 pm

This story, Judge Rejects Rent Hikes Based on Work Not Done, by Daniel Wise, appears in the April 15th online edition of the New York Law Journal:
 
 
Susan Byrne and William A. Connors, the residents of a loft on West 21st Street, were caught in a bureaucratic twilight zone.
 
The couple's landlord had obtained a certificate of occupancy from the New York City Department of Buildings, claiming that work required to bring the building into code compliance had been completed. The landlord's architect had certified that the building at 5 West 21st Street met the safety and fire requirements of the city loft law. A city building inspector, who was subsequently indicted and pleaded guilty to issuing a false inspection report at a different building, found that all the work necessary for the issuance of certificate of occupancy had been completed. But, in fact, the work had not been done the City Buildings Department would later acknowledge.
 
Nonetheless, the landlord, Daniel Pelli, was awarded a 6 percent rent increase effective May 1998 based upon the architect's certification, and in May 2000 the couple was required to sign a new lease under the city rent stabilization program providing for an additional 2 percent rent increase.
 
Once the certificate of occupancy had been issued, the city loft board said it was powerless to bar a rent increase. Then the City Board of Standards and Appeals, which has the power to review the Buildings Department's issuance of a certificate of occupancy, refused to take action as long as Mr. Pelli was willing to complete the repair work.
   
However, State Supreme Court Justice Herman Cahn cut through the red tape and voided the certificate of occupancy, finding it "uncontested" that the renovations required to legalize the building "had not been done."
 
Moreover, Justice Cahn observed in Byrne v. The Board of Standards and Appeals, 11535/01, that allowing the certificate of occupancy to stand on the strength of a landlord's promise to complete repair work in the future "would reward possible wrongdoing."
 
The ruling gives Ms. Byrne and Mr. Connors the legal basis upon which to force a rollback of the rent increases granted to Mr. Pelli according to their lawyer, Paul Gulielmetti of Gulielmetti & Gesmer.
   
Mr. Pelli, a lawyer who represented himself, said he is weighing an appeal, but criticized Justice Cahn's ruling as "wrest[ing] discretion from the Board of Standards and Appeals," the agency "best able to understand and resolve these situations."
 
The core question raised by the couple's suit to void the certificate of occupancy was whether the Board of Standards and Appeals could keep in place the certificate of occupancy even though required repairs had not been completed.
 
Although the Department of Buildings had since acknowledged that the required work had not been done, Justice Cahn wrote, the Board of Standards and Appeals had nonetheless concluded that the certificate of occupancy should remain in effect as long as Mr. Pelli "was willing to correct the problems."
 
That approach, Justice Cahn concluded, "distorts the purpose of a certificate of occupancy, and creates a situation where an owner has a great motivation to file whatever papers are necessary to obtain a certificate of occupancy, regardless of their accuracy . . . ."
 
Assistant Corporation Counsel Sheryl Kamholz represented the Board of Standards and Appeals. Mr. Pelli appeared pro se as a third-party intervenor. Jennifer A. Covell, also of Gulielmetti & Gesmer, joined in the representation of Ms. Byrne and Mr. Connors.
 
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Re: Judge Revokes Fraudulent Loft Certificate of Occupancy

Postby dakellner@kcdlaw.com » Tue Apr 16, 2002 11:28 am

Thanks for the post. This is a useful decision.

But look at what the tenant had to go through to pull off this successful challenge to the certificate of occupancy: first, arguing with the Department of Buildings, then an application to the Board of Standards and Appeals, and then an article 78 proceeding in Supreme Court. Mr. Pelli, the tenant, deserves a lot of credit for perseverance.
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