DECISION & ORDER In this nonprimary residence holdover proceeding, Respondents Jonathan Lewis and Catherine Mahoney s/h/a “Jane Doe,” move for an order pursuant to CPLR R. 3211(a)(7), dismissing the petition for failure to state a cause of action. Petitioner opposes the motion in its entirety. Relevant Factual and Procedural Background It is undisputed by the parties that the subject premises, located at 83 Meserole Street, Unit 85, Brooklyn, NY, is an interim multiple dwelling that was registered with the New York City Loft Board (“Loft Board”) and is covered under Article 7-C of the Multiple Dwelling Law (“the Loft Law”). It is further undisputed that Respondent Lewis was at one time a protected occupant of the subject premises and that he installed many of the fixtures in the instant unit himself. Arguments Respondents, in their motion, contend that on May 24, 2019, Lewis, after duly notifying Petitioner of his intent to sell his rights and fixtures to the subject premises and after Petitioner failed to object to the sale within the prescribed timeframe, proceeded to sell his rights and fixtures to Mahoney. Respondents further contend that, having sold his rights and fixtures to Mahoney, Lewis no longer has any rights or obligations as an occupant qualified for protection under the Loft Law, including maintaining the premises as his primary residence. Thus, Respondents conclude that dismissal of the instant proceeding is warranted as a matter of law. In opposition, Petitioner contends that Lewis lacked standing to sell his rights and fixtures because at the time of the sale, he did not occupy the premises as his primary residence. Specifically, Petitioner, relying on Loft Board decisions, contends that only a primary resident can sell his/her rights and fixtures with regard to an interim multiple dwelling. Petitioner appears to argue that the Court should give deference to Loft Board decisions rather than to the Appellate Division, First Department case cited by Respondents, which found that “[n]othing in section 286 (6) of the Multiple Dwelling Law suggests that it was intended to apply only to an outgoing tenant who occupies a loft unit as a primary residence” (577 Broadway Real Estate Partners v. Giacinto, 182 AD2d 374, 375 [1st Dep't 1992]). Discussion In considering a motion to dismiss pursuant to CPLR R. 3211 (a)(7), “the court should accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (Tirpack v. 125 N. 10, LLC, 130 AD3d 917, 918 [2d Dep't 2015]). However, “it is well settled that bare legal conclusions and factual claims which are flatly contradicted by the evidence are not presumed to be true on a motion to dismiss for failure to state a cause of action. When the moving party offers evidentiary material, the court is required to determine whether the proponent of the pleading has a cause of action, not whether [it] has stated one” (Meyer v. Guinta, 262 AD2d 463, 464 [2d Dep't 1999] citing Doria v. Masucci, 230 AD2d 764 [2d Dep't 1996] ["this entails an inquiry into whether or not a material fact claimed by the pleader is a fact at all and whether a significant dispute exists regarding it"]). Multiple Dwelling Law §286 provides, in pertinent part, that “[n]otwithstanding any provision of law to the contrary, a residential tenant qualified for protection pursuant to this chapter may sell any improvements to the unit made or purchased by him to an incoming tenant provided, however, that the tenant shall first offer the improvements to the owner for an amount equal to their fair market value.” In 577 Broadway Real Estate Partners v. Giacinto (supra) the Appellate Division rejected the argument that an outgoing tenant who sells improvements in accordance with MDL §286 (6) must maintain the loft unit as his or her primary residence at the time of sale. Similarly, this Court need not make any finding with regard to whether Lewis was or was not a primary resident at the time of the sale of his rights and fixtures to Mahoney. Such a finding is unnecessary because, even if Lewis did not occupy the subject apartment as his primary residence at the time of the sale, he was entitled to sell his rights and fixtures to the subject premises. Having failed to object to the sale of Lewis’ rights and fixtures within the prescribed timeframe, Petitioner cannot now use this nonprimary residence holdover proceeding as an attempt to litigate the validity of the sale of Lewis’ rights and fixtures with regard to the subject premises. Rather, an administrative proceeding before the Loft Board is the appropriate avenue for such a challenge. Indeed, Petitioner in its papers indicates that it filed such a challenge (see Petitioner’s Affirmation in Opposition, Exhibit A), and Respondents in their Reply attach the Loft Board’s August 15, 2019 decision, which rejected Petitioner’s application to invalidate the Sale of Improvements for the subject unit (see Respondents’ Reply, Exhibit A). Contrary to Petitioner’s assertions, the Court is under no obligation to defer to Loft Board decisions in matters of statutory interpretation. Specifically, the Court of Appeals, in Matter of Bikman v. New York City Loft Board (14 NY3d 377 [2010]), found that “the Loft Board’s interpretations of Multiple Dwelling Law §286 (6) is not entitled to deference as the issue is solely a matter of statutory interpretation (Matter of Bikman v. New York City Loft Bd., 14 NY3d at 381 citing 577 Broadway Real Estate Partners, 182 AD2d 374 [1st Dep't 1992]). Further, the Court of Appeals noted that “[i]n construing this statute, we look to its legislative intent and conclude that section 286 (6) was enacted to prevent an owner from receiving unearned enrichment, thereby depriving compensation to the tenants who paid for the improvements” (id). Accordingly, it is ORDERED that this nonprimary residence holdover proceeding is dismissed pursuant to CPLR R. 3211 (a)(7). Dated: October 1, 2019
