In this case, the Surrogate’s Court was asked to determine the applicability of the Loft Law in a case where a landlord sought to recover back rent and where the decedent’s estate sought to recover the value of fixtures added to the premises by the decedent.
Under New York law, a loft is a raw, open space that was originally commercial space and not suitable for purposes. However, it became common for owners to rent the space for residential use. The Loft Law was enacted in the 1980s to encourage landlords to legalize the illegal residential units and bring them within the regulatory system that governs residential rentals. One part of the Loft Law applied to fixtures that residents added to their units in order to make the unit habitable and compliant with the residential unit regulatory system.
Decedent died testate on August 30, 2003. He was survived by his two daughters. On January 8, 2004, his daughter, Lorraine, was appointed to serve as his executrix. According to the will, the decedent’s daughters were entitled to his residuary estate which had a value of less than $50,000.
At the time of his death, the decedent live in an apartment building located at 500 Broadway in New York City. Until about two year prior to the decedent’s death, the apartment building was an “interim multiple dwelling” within the meaning of the Loft Law. On July 24, 2001, an order of the Loft Board upgraded the building to the status of a multiple dwelling subject to rent stabilization (Administrative Code of City of NY § 26-501 et seq.). As a result of a dispute between the tenants and the landlord about the new rent stabilization leases, there was no lease in effect for the decedent’s apartment at the time of his death and the decedent had not paid rent for some time.
The petitioner in this case was the landlord. The landlord sought payment of $21,000 from the decedent’s estate. The executrix responded by denying the landlord’s allegations. She also asserted affirmative defenses that the estate had a right to setoffs for the value of fixtures and as well as for the amount of decedent’s security deposit. The landlord responded by requesting summary judgement seeking dismissal of the defenses and asking that the court to fix the amount of the rent arrears.
The landlord requests that the Surrogate’s Court issue a summary judgement in his favor for the $21,000 in rent. However, the court concluded that there are outstanding evidentiary issues that would preclude summary judgement. For example, if there is in fact an arrears, the evidence submitted by the petitioner is unclear as to what the amount would be. The petitioner submitted different amounts and the amounts he submitted are inconsistent with the amount fixed by the Loft Board.
The executrix’s position with respect to the fixtures is based on a provision of the Loft Law that gives a residential tenant the right to install figures that would make the premises habitable and to recover the fair market value of those figures when they cease to be a tenant. Multiple Dwelling Law § 286(6)
The landlord argued that the provision of the Loft Law allowing recovery for the fair market value of fixtures does not apply this this case because it is not the tenant who is attempting to recover the fair market value, but the executrix. The executrix is not a residential tenant. The court sided with the executrix and concluded that the executrix’s affirmative defense based on a right of setoff for the value of fixtures installed by decedent states a claim.