DECISION/ORDER This nonpayment proceeding was tried before me on June 14, 2018 and November 1, 2018. Both parties were represented by counsel. Both attorneys submitted post-trial memos of exceptional quality, for which I thank them. Petitioner seeks a judgment for $14,022.01 in rent due through November 2018 and for possession. Respondent seeks a dismissal of the entire rent claim on the merits under Section 302 of the Multiple Dwelling Law.The apartment at issue is a rent stabilized loft on the second floor of 116 Duane Street, in the Tribeca neighborhood of Manhattan. Respondent is 77 years old and has lived in the apartment since 1976.In September 2016 the Trinity Boxing Club opened on the first floor of the building, immediately below the respondent’s apartment. The boxing club has an almost-full-sized boxing ring, as well as eight to ten heavy boxing bags of various weights and sizes. On weekdays the club is usually open from 6:00 a.m. to 9:00 p.m. The Saturday hours are shorter, and the club is only occasionally open on Sunday for private lessons given by the owner. There are, on an average day, about 10 students each morning and about 20 students each evening. Students in training punch the heavy bags, work with an instructor wearing pads, and spar in the ring.The certificate of occupancy for the building indicates that it is located in a C6 zoning district, and that the first floor may be used as a store, within Use Group 6. The boxing club is a physical culture establishment as that term is defined by Zoning Resolution Section 12-10, and is in Use Group 9.According to trial testimony by Loreal Monroe, General Counsel to the New York City Board of Standards and Appeals, New York City’s Zoning Resolution provides that a physical culture establishment must obtain a special permit from the Board of Standards and Appeals. To get such a permit, the operator of the club would have to file an application and then go through a notice and community hearing process. Among the issues that are considered in the approval process are the impact on residential tenants and others in the community. Although a permit can be granted for a building zoned as the building here is, no application for a permit has ever been filed for the Trinity Boxing Club at this location.An inspector from the New York City Department of Buildings testified at the trial that operation of the boxing club, under Use Group 9, in a space approved only for Use Group 6 violated the certificate of occupancy for the building. Section 28-118.3.1 of the New York City Administrative Code provides that no portion of a building may be altered to change from one use group to another without obtaining a new certificate of occupancy. Section 28-118.3.2 of the same law provides that no change may be made in any portion of a building that would bring it under a “special provision of this code or other applicable law or rules” unless the commissioner issues a new or amended certificate of occupancy. The inspector wrote two violations in March 2017 and another in September 2017, all for occupancy by the boxing club in violation of the certificate of occupancy and the Zoning Resolution.Section 301 of the Multiple Dwelling Law states, “No multiple dwelling shall be occupied in whole or in part until the issuance of a certificate by the department that said dwelling conforms in all respects to the requirements of this chapter, to the building code and rules, and to all other applicable law…” Section 302(l)(b) of the same law provides that if any dwelling is occupied in violation of Section 301 for any period, “no rent shall be recovered by the owner of such premises for said period, and no action or special proceeding shall be maintained therefor, or for possession for nonpayment of said rent.”In Chazon LLC v. Maugenest, 19 NY 3d 410 (2012), the Court of Appeals rejected a significant body of case law that had, over time, softened and limited the rent collection ban in Section 302(l)(b). The Court said, “in the absence of compliance [with Section 301] the law’s command is quite clear…[Judicially created exceptions] may make sense from a practical point of view. But we find nothing…to explain how they can be reconciled with the text of the statute. They simply cannot…” The Court went on to say that if the rent bar created an undesirable result, that was a matter for the legislature, not the courts.Since Chazon, the Appellate Terms in the First and Second Departments have clearly held that Section 302(l)(b) “prohibits said owner from recovering rent or maintaining a summary proceeding for any period the premises is occupied in violation of the certificate of occupancy.” 49 Bleecker Inc. v. Gatien, 51 Misc. 3d 152(A) (AT 1st Dept. 2016). See also GVS Properties LLC v. Vargas 59 Misc. 3d 128(A) (AT 1st Dept. 2018), 208 Himrod St. LLC v. Irizarry 42 Misc. 3d 145) A_ (AT 2nd Dept 2014).It is clear, both factually and legally, that the use of the first floor at 116 Duane Street as a boxing gym is inconsistent with the certificate of occupancy for the building. Under Chazon and the cases that followed, then, the rent collection bar of Section 301(b)(1) applies here.Petitioner argues that the rent collection bar does not apply when the nonconforming use that violates the certificate of occupancy is commercial rather than residential. Petitioner’s difficulty is that the cases it cites for this proposition do not support its argument. Most of petitioner’s cases are pre-Chazon decisions which hold simply that a use that does not conform to the certificate of occupancy does not affect the rental obligations of tenants living in “legal” units. See, e.g., 50 E. 78th Corp. v. Jire 191 Misc. Lexis 876 (AT 1st Dept. 1991), Washington Square Professional Bldg. Inc. v. Leader 68 Misc. 2d 72 (Civ. Ct. NY Co. 1971), Stanley Associates v. Marrero, 87 Misc. 2d 1011 (Civ. Ct. Queens Co. 1976), Shoretown Management v. Kahili, 1993 NY Misc. Lexis 673 (AT 1st Dept.).The trial court decision in Phillips & Huyler Assocs. V. Flynn 154 Misc. 2d 689 (Civ Ct. NY Co. 1992), aff’d 164 Misc. 2d 347 (AT 1st Dept. 1995), aff’d 225 AD 2d 475 (1st Dept. 1996), does stand for the proposition that a commercial tenant may not take advantage of the rent collection bar of Section 302(1)(b), because the Multiple Dwelling Law was intended for the protection of residential, and not commercial, tenants. The case does not, however, address the rights of residential tenants in a building in which the commercial space is occupied in violation of the certificate of occupancy. It therefore has no relevance to this case.For all of the foregoing reasons the proceeding is dismissed on the merits.On respondent’s second counterclaim, for an injunction, and pursuant to the New York City Civil Court Act Section 110(a)(4), it is herebyORDERED that petitioner shall correct the open violations placed in 2017 by the Department of Buildings on or before 2/15/19. Compliance may be achieved by ceasing the nonconforming use, or by obtaining the necessary permit and a new or amended certificate of occupancy. If compliance within the time frame provided is not possible, petitioner may move for an extension of time, on a showing of the timely and good faith steps it has taken to comply.Dated: 12/14/18
