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Nur Ashki Jerrahi Community v. New York City Loft Board

November 19, 2008


The opinion of the court was delivered by: Edward H. Lehner, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Before me is an application by petitioner to annul the order issued by respondent New York City Loft Board (the "Loft Board") dated February 21, 2008 (the "Order") approving the report ofthe New York City Administrative Law Judge ("ALJ") dated August 11, 2006 finding petitioner liable to its tenant Patricia Thornley for a rent overcharge of $62,880.80.

The subject premises is an apartment in a loft building located at 5-7 White Street in Manhattan (the "Building"), which is subject to the Loft Law (Multiple Dwelling Law, Article 7-C), and is registered as an Interim Multiple Dwelling. The Building has not as yet been legalized for residential occupancy and thus, although Ms. Thornley occupies her unit for residential purposes, the apartment is not now subject to the Rent Stabilization Law ("RSL").

Ms. Thornley, who entered into occupancy in 1990, claims that she has been overcharged in her rent since the commencement of her occupancy. She maintains that the rental paid by the prior occupant of $770 per month is the maximum amount she could be charged. The ALJ agreed and concluded, on an application for summary judgment, that for the period from March 2002 until October 2005 all rent paid in excess of said sum was an overcharge to be repaid by the current owner of the Building. In so finding, the ALJ applied 29 RCNY § 1.06.1(c), adopted by the Loft Board, which provides:

An application for rent overcharges shall be filed within four yeas of such overcharge. Overcharges shall not be awarded for the period prior to the date of filing of a coverage or registration application, nor for more than four years before the date on which the application for overcharge was filed.

Petitioner contends, among other defenses, that under CPLR 213-a the entire claim is time-barred in that the first overcharge occurred more than 15 years prior to the 2006 application to the Loft Board. Said section reads as follows:

An action on a residential rent overcharge shall be commenced within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the action is commenced. This section shall preclude examination of the rental history of the housing accommodation prior to the four-year period immediately preceding the commencement of the action.

Ms. Thornley's counsel acknowledged that if the apartment were subject to the RSL the entire claim would be time-barred (tr. pp. 25-29), but asserts that under the aforesaid Loft Board regulation the overcharge may be recovered for the four years immediately preceding the filing of the complaint with respect thereto.

A similar claim was made before me by the loft tenants in the case of Mozes v. Shanaman (2004 WL 5487924). In accord with cases involving tenants subject to the RSL, whose claims were held to be time-barred when the first overcharge was imposed more than four years prior to the filing of a complaint [Brinckerhoff v. New York State Division of Housing and Community Renewal, 275 AD2d 622 (1st Dept. 2000); Myers v. Frankel, 292 AD2d 575 (2nd Dept. 2002)], I dismissed the actions concluding:

Hence, these actions first commenced eight to ten years after the first alleged overcharge are barred by the period of limitations set forth in CPLR 213-a. The fact that none of the above-cited cases involved loft space is of no significance as, while the law and regulations with respect to the occupancy of such space are different from that governing premises subject to the RSL, § 213-a applies to all rent overcharge claims of "residential" tenants and plaintiffs do not dispute that they occupy their premises for residential purposes.

This determination was affirmed [21 AD3d 854 (1st Dept. 2005), lv. to ap. den. 6 NY3d 715 (2006)], the court holding that since "the first overcharges alleged ... occurred no later than 1996, these actions commenced in 2003 are time-barred (CPLR 213-a)." See also, Stoltz v. Gilbert, 13 Misc 3d 137(A), 2006 WL 3386562 (App. Term, 1st Dept.).

While the wording of the Loft Board regulation quoted above is slightly different from CPLR 213-a, clearly a City regulation cannot alter a limitation period set forth in a statewide statute. See in general, Albany Area Builders Association v. Town of Guilderland, 74 NY2d 372 (1989); New York City Health and Hospitals Corporation v. Council of the City of New York, 303 AD2d 69 (1st Dept. 2003). Hence, the governing period of limitations in that set forth in § 213-a.

In light of the foregoing, it is clear that the overcharge claim is time-barred. However, Ms. Thornley asserts that the court cannot consider the issue since it was not raised before the ALJ on her summary judgment motion. While she is correct that the holding in Mozes v. Shanaman, supra, and similar holdings under the RSL were not argued before the ALJ, the issue was raised before the Loft ...

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