ORDER. The New York City Loft Board ("Loft Board") accepts the Report and Recommendation of Deputy General Counsel Martha Cruz dated March 19, 2010.

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1 ORDER NEW YORK CITY LOFT BOARD In the Matter of the Application of 315 BERRY STREET CORP. Loft Board Order No Docket No.: LE-0557 RE: Berry Street Brooklyn, New York IMD No.: ORDER The New York City Loft Board ("Loft Board") accepts the Report and Recommendation of Deputy General Counsel Martha Cruz dated March 19, The post-legalization rent adjustments for Interim Multiple Dwelling ("IMD") units 4NW, 5S, 7S, 7N in the building located at Berry Street, Brooklyn, New York ("Building") are set forth in the attached Report and Recommendation. The initial legal regulated rents for the IMD units are: Unit4NW: Unit 5S: Unit 7N: Unit 7S: $ $ 1, $ 1, $ 1, The initial rent term for unit 4NW is May 1, 2010 though April 30, The initial rent term for units 5S, 7N and 7S is from March 1, 2009 through February 28, A post-legalization rent adjustment is not necessary for IMD units 4N, 4S, 5N, 6N and 6S because sales of rights were executed for these units pursuant to MUltiple Dwelling Law 286 (12). The owner of the Building, 315 Berry Street Corporation ("Owner"), is directed to register units 4NW, 5S, 7N and 7S with the New York State Division of Housing and Community Renewal 1 and the New York City Department of Housing Preservation and Development. Further, the Owner is directed to provide the residential occupant(s) of these units with residential leases subject to the provisions regarding evictions and regulations of rent set forth in the Emergency Tenant Protection Act of 1974, pursuant to the terms set forth in the Report and Recommendation. Effective thirty-five days from the date of the mailing of this Order, this Building is no longer an IMD and is no longer under the jurisdiction of the Loft Board. DATED: April 15, 2010 I As a point ofinformation, the Owner must register the building with New York City Department of Housing Preservation and Development, under Multiple Dwelling Law 325, before the building can be registered with the Division of Housing and Community Renewal.

2 DATE LOFT BOARD ORDER MAILED: APR j R~bert D. LiMand" Chairperson Members concurring: Barowitz, Bolden-Rivera, Delaney, Chairperson LiMandri, Mayer, Shelton, Spadafora (7)

3 NEW YORK CITY LOFT BOARD In the Matter ofthe Application of 315 BERRY STREET CORP. REPORT AND RECOMMENDATION Docket No. LE-0557 RE: Berry Street New York, New York IMD No MARTHA CRUZ, DEPUTY GENERAL COUNSEL BACKGROUND On September 17,2008, a final certificate of occupancy was issued for the building located at 315 Berry Street, Brooklyn, New York ("Building"), under certificate number F. Pursuant to Title 29 of the Rules of the City of New York ("RCNY") 2-01 (i)(1), the owner of the Building, 315 Berry Street Corporation ("Owner"), was then eligible to apply for rent adjustments based on the costs of code compliance and Rent Guidelines Board ("RGB") increases. On February 12, 2009, the Owner filed a Notice of RGB Increase Filing form ("RGB Notice") seeking RGB increases for units 4NW, 5S, 7N and 7S. On April 27, 2009, the Owner waived its right to seek rent adjustments for the costs of code-compliance. The Loft Board docketed the RGB Notice as LE ANALYSIS According to Loft Board records, the Building was originally registered on January 31, 1983 listing eight units: two units on the fourth floor, two on the fifth, two on the sixth and two units on the seventh floor. On September 19, 1983, the registration listed the eight units as 4N; 4S; 5N; 5S; 6N; 6S; 7N and 7S. In 1996, the Loft Board found unit 4NW to be covered under Article 7-C of the Multiple Dwelling Law. See, Matter ofjemison, Loft Board Order 1942 (March 28, 1996). A final certificate of occupancy has been issued for the Building which lists these units as "Class A Apartments," thus the Owner is in compliance with Multiple Dwelling Law ("MDL") 284(1). See, Application of Teliman Holding Corp., Loft Board Order No (Jan. 9, 1997); Application of Halebid Corp., Loft Board Order No. 585 (Apr. 30, 1987). Loft Board records show that sales of rights agreements pursuant to MDL 286(12) were executed on: 1) July 21, 1986 for unit 5N between the Owner and former occupants, Kathy Moss, Kevin Decker & David Hill; 2) October 27, 1987 for unit 4S between the Owner and former occupants Kim Tyler and Charles Hanley; 3) May 1, 1998 for unit 6S between the Owner and former occupant, Peter Pryor;

4 4) February 23, 1989 for unit 6N between the Owner and former occupant Kenneth McKay; and 5) January 31, 1991 for unit 4N between the Owner and former occupants Paul H. Tucker and Lisa Dorsey Tucker. Loft Board records also show that a sale of improvements agreement was executed on July 21, 1986 for unit 5N between the Owner and former occupants, Kathy Moss, Kevin Decker and David Hill, pursuant to MDL 286(6). Consequently, pursuant to MDL 286 (12), the above-listed IMD units are not subject to rent regulation. Pursuant to 29 RCNY 2-01 (i)(1)(i), the amount of each RGB increase shall be equal to the percentage increase applicable to one or two-year leases as established by the Rent Guidelines Board on the date the application is submitted to the applicable tenant, and on each anniversary thereafter. In this case, the Owner filed the RGB Notice on February 12, The rent increase percentage applicable to one-year leases on February 12, 2009 was 3.5% and for two-year leases 6.5%. Additionally, pursuant to 29 RCNY 2-01 (i)(1 )(i), the applicable rent increase becomes effective the first day of the first month following the day the owner files the RGB application with the Loft Board. Unit4NW According to the RGB Notice, the maximum permissible rent for unit 4NW was $ On February 20,2009, Noah Jemison, the occupant of unit 4NW, disputed the rent amount on the RGB Notice and elected to be governed by RGB increases applicable to two-year leases. On June 9, 2009, the Owner's attorney filed a response to the Mr. Jemison's dispute stating the base rent listed on the RGB Notice was correct. On November 23, 2009, a conference was held at the Loft Board in which the Owner and Noah Jemison agreed to a rent level of $ The parties also agreed that the period of this rent level would begin the month immediately following the final rent order. Therefore, the rent level begins on May 1, 2010 through April 30, 2012 and should be deemed the initial legal regulated rent. Unit 55 According to the RGB Notice, the maximum permissible rent for unit 58 was $1, In a letter dated March 13,2009, Dana Kane, the occupant of unit 58, disputed this amount. In a letter dated March 30, 2009, the Owner's counsel agreed that the maximum permissible rent for the unit is $1, including the RGB increases, but also added that this amount did not include heat charges agreed to in a prior stipulation. The Loft Board staff telephoned Ms. Kane to discuss whether she had an objection to the Owner's response. 8he stated that she did not have any objections to the Owner's March 30 th letter. Pursuant to 29 RCNY 2-01 (i)(1 )(i), the base rent for unit 58 as of March 1, 2009, is $1, The period of this rent level is March 1, 2009 through February 28, 2011 and should be deemed the initial legal regulated rent. 2 This amount does not include a heat charge of$150 a month that Ms. Kane agreed to pay in a separate agreement.

5 Unit 7N In the RGB Filing, the Owner alleged that the maximum permissible rent for unit 7N is $1, In a letter dated March 10,2009, Nade Haley, the occupant of unit 7N, answered the RGB Notice, disputed the maximum permissible rent and elected to be governed by RGB increases applicable to two-year leases. In her response, Nade Haley stated that the maximum permissible rent is $1, On June 8, 2009, the Owner's attorney accepted $1, as the base rent for the unit, provided Ms. Haley agreed to add certain language concerning the unit's heating system to future leases of the unit. The following is a calculation of the rent for the unit applying the RGB increase applicable to two-year leases: DATE OF % INCREASE FOR 2 OLD INCREASE NEW BASE INCREASE YEAR LEASE RENT AMOUNT RENT 3/1/ /28/ % $1, $ $ 1, Pursuant to 29 RCNY 2-01 (i)(1 )(i), the base rent for unit 7N, as of March 1, 2009, is $1, The period of this rent level is March 1, 2009 through February 28, 2011 and should be deemed the initial legal regulated rent. Unit 7S In the RGB filing, the Owner listed the maximum permissible rent for unit 7S as $1, On March 23, 2009, Steve Silver, the occupant of unit 7S, disputed the new rent amount listed by the Owner after the RGB increases were applied. Mr. Silver elected to be governed by RGB increases applicable to two-year leases. On March 30, 2009, the Owner's attorney agreed that there was a mathematical error and accepted the amount put forth by Mr. Silver. The following is a calculation of the rent for the unit applying the RGB increase applicable to two-year leases: DATE OF % INCREASE FOR 2 OLD INCREASE NEW BASE INCREASE YEAR LEASE RENT AMOUNT RENT 3/1/ /28/ % $1, $ $ 1, Pursuant to 29 RCNY 2-01 (i)(1 )(i), the rent for unit 7S as of March 1, 2009, is $1, The period of this rent level is March 1, 2009 through February 28, 2011 and should be deemed the initial legal regulated rent. ITEMS OF GENERAL APPLICABILITY Provided the Loft Board accepts this recommendation at its April 15, 2010 meeting, and the final order is mailed to the affected parties after April 21, 2010, this rent adjustment shall take effect on June 1, The Owner must register the building as a multiple dwelling with the New York City Department of Housing Preservation and Development (HPD) and must register units 4NW, 5S, 7S and 7N with the New York State Division of Housing and Community Renewal as rent stabilized units. See, 29 RCNY 2-01(m); MOL 283(3). The Owner must offer the affected units leases subject to the provisions of the Emergency Tenant Protection Act of 1974 and the Rent Stabilization Law and Code. See, MDL

6 286(3) and 29 RCNY 2-01 (m). The monthly rent for each lease should be the initial legal regulated rent set forth above. RECOMMENDATION Based on the foregoing, I recommend that the New York City Loft Board determine that the building located at Berry Street, Brooklyn, New York is in compliance with MOL 284(1) and is no longer an IMD. Additionally, I recommend that the Owner be directed to register the aforementioned unit with the New York State Division of Housing and Community Renewal. DATED: March 19, 2010

7 Opinions from April 15,2010 Loft Board meeting 5) 315 Berry Street Corp, 315 Berry Street, LE-0557 Opinion of Chuck DeLaney: As the tenant representative on the Loft Board, I concur with this opinion and order. I congratulate both the owner and tenants for completing the work necessary to legalize this building in conformity with the Loft Law and the Loft Board's rules. As more and more buildings reach legalization, two points are worth calling to the attention ofboth owners and tenants in those buildings that have completed the legalization process and received final rent orders: 1. Loft Board legalization orders are filled with a lot of figures and notes regarding rent increases under ROB guidelines and, where the owner seeks them, increases both prospective and retroactive related to allowable code compliance pass along amounts. Both owner and tenants should check all the figures and notes in this order carefully to make sure that they are accurate. Any discrepancy should be called to the Loft Board's attention immediately, and could require an application for reconsideration, which must be filed within 30 days for the mailing date ofthis order. Check all items carefully. 2. Loft Board legalization orders now contain the following sentence: "Effective the date ofthis order, this building is no longer an IMD Building, and is no longer under the jurisdiction ofthe Loft Board." This assertion raises several questions that are significant for both owners and tenants: Are the rights conferred by the Loft Law regarding the sale offixtures and rights set forth in MDL and affected by this order? Ifthose rights survive, what agency adjudicates those rights? Who has jurisdiction? Owners are urged to register with HPD and DHCR. Not all owners follow the Board's advice. Where should tenants register concerns regarding either the City's Housing Maintenance Standards or the Board's Minimum Housing Maintenance Standards ifthe owner does not move forward promptly with HPD and DHCR registration? It might make sense for both the owner and the tenants to seek legal advice regarding any changes in the rights and responsibilities that apply to the parties with regard to this building in the future. These rights and responsibilities should be spelled out in large

8 measure by the lease that is offered to tenants after legalization; however, there are sometimes issues that come into dispute with regard to that lease. Where should those disputes be resolved? There may be issues that need to be addressed either by the Loft Board or DHCR, or both, in order to make all aspects ofthis transition clear to all parties in buildings that complete the legalization process. As ofthis time, it is my view that these issues have not been fully addressed in situations such as this where the building has been given a final rent order in what we call an "LE" case.

9 NOTICE PLEASE TAKE NOTICE THAT THE LOFT BOARD'S RECONSIDERATION RULE, 29 RCNY 1-07, WAS SUBSTANTIALLY AMENDED EFFECTIVE AUGUST 14, A party aggrieved by a determination of the Loft Board may file an application for reconsideration of the determination. Under 29 RCNY 1-07(b), an aggrieved party must serve the reconsideration application on the affected parties to the prior proceeding. Service shall be made (a) by personal delivery, or (b) by certified or registered mail, return receipt requested, with an additional copy sent by regular mail. The aggrieved party must then file the application at the Loft Board's office along with proof of service and the required application fee. Under section 1-07(b), "[t]o be considered timely, a reconsideration application must be received by the Loft Board within 30 days of the date of mailing by the Loft Board of the determination sought to be reconsidered." Pursuant to 29 RCNY 1-07(d): A Loft Board determination pursuant to section 1-06 if these rules shall be the final agency determination for the purpose of judicial review, unless a timely application for reconsideration ofthe determination has been filed. In such case, (i) if the Loft Board modifies or revokes the underlying order, such revocation or modification shall be deemed the final agency determination from which judicial review may be sough; (ii) ifthe Loft Board denies the reconsideration application, the underlying order shall be deemed the final agency determination from which judicial review may be sought, and the date of the denial of the reconsideration application shall be deemed the date of the final agency determination; and (iii) if the Loft Board decides the reconsideration application by remanding the matter to the hearing officer for further proceedings, neither the underlying order nor the remand order shall constitute a final agency determination, and no judicial review may be sought until such time as the Loft Board issues a final agency determination following the remand. Updated 07108