NEW YORK CITY LOFT BOARD In the Matter of the Application of

CRYSTAL HEFFERNAN

ORDER

ORDER

Loft Board Order No. 5067

Docket No.: PO-0128

RE: 250 Moore Street Brooklyn, New York

IMD No.: 30041

On April 1, 2020, Crystal Heffernan, the residential tenant of Unit 408 in the building located at 250 Moore Street, Brooklyn, New York ("Building"), filed with the New York City Loft Board ("Loft Board") an application seeking protected occupancy status for herself pursuant to Article 7 -C of the Multiple Dwelling Law. The Loft Board staff docketed the protected occupancy application as PO-0128.

On May 5, 2020, MZBJ Holdings LLC ("Owner"), the owner of the Building, filed with the Loft Board an answer in opposition to the protected occupancy application.

The Loft Board staff transferred the case to the Office of Administrative Trials and Hearings ("OATH"), which assigned the matter to Administrative Law Judge Ingrid M. Addison for adjudication.

On June 1, 2020, Ms. Heffernan submitted an amended protected occupancy application to OATH. Owner subsequently submitted an answer in opposition to the amended protected occupancy application.

On June 24, 2021, Judge Addison informed the Loft Board staff that the parties had reached an agreement, which was commemorated in a stipulation of settlement dated May 21 , 2021. According to the stipulation of settlement, among other things, Ms. Heffernan withdrew her protected occupancy application with prejudice. Owner also recognized Ms. Heffernan as the protected occupant of Unit 408 under the Loft Law.

Ms. Heffernan's protected occupancy application is deemed to be resolved. The Loft Board neither accepts nor rejects the remaining terms of the stipulation of settlement.

The Loft Board directs its staff to update its records to reflect Ms. Heffernan as the protected occupant of Unit 408.

DATED: July 15, 2021

Renaldo Hylton Chairperson

Board Members Concurring: Roche, DeLaney, Roslund, Oddo, Rajan, Hylton

Board Members Absent: Barowitz, Hayashi, Hylton

DATE LOFT BOARD ORDER MAILED: JUN 2 3 2021

Opinion from the July 15. 2021 loft Board meeting:

#5, 250 Moore Street, PO-0128

Opinion of Chuck Delaney

As the tenant representative on the New York City loft Board, I voted in favor of the proposed order in

this case. However, I continue to have reservations about the loft Board's acceptance of stipulations in

cases such as this, where the loft Board staff adds what I consider to be a dodge: "Ms. Heffernan's

protected occupancy application is deemed to be resolved. The loft Board neither accepts nor rejects

the remaining terms of the stipulation settlement." [Emphasis added]

As I have expressed many times over the years, my view is that once a case is filed, any settlement by

stipulation should be limited to the issues at hand. In this case the facts seem to be straightforward.

Initially, the applicant filed a pro se application for protected occupancy, stating that she lived in the

unit, that the unit met the requirements for coverage in a building that was already covered by the loft

law. In its answer, the attorney for the owner notes that the tenant first took occupancy in 2013, and

states that it is incumbent on the applicant to demonstrate that she is protected in accord with the

provisions of RCNY 2-09(b)(3)(iii). In her reply, now represented by an attorney, the applicant simply

recites more facts: She had a one-year lease from July 2013 to June 2014 with a rent of $3100/month.

She entered into a second lease for the period from July 2015 to June 2017 for $3250 for the first year

and $3350 for the second. She did not file a separate application for a rent overcharge to my

knowledge.

In my view, the settlement should have focused on the narrow question of whether or not the applicant

was a protected occupant under the provisions of RCNY 2-09(b)(3)(iii).

Instead, the stipulation (which the loft Board conveniently "neither accepts nor rejects," acknowledges

that the applicant is the protected occupant. It then goes on:

Point 3: As consideration for entering into this Stipulation, Tenant waives any and all possible

overcharge through the date of this agreement.

Point 4: Tenant's protected occupancy and overcharge applications are withdrawn with prejudice.

Point 5: The parties agree that the lawful legal regulated rent for the Unit, inclusive of a 6% milestone

increase for filing an alteration application, is $2,400.00 per month

I am not sure there ever was an overcharge application. It is certainly not mentioned in the proposed

order. Usually when an applicant files a Protected Occupancy (PO) and an overcharge (TA) application,

they would normally be consolidated in a single proceeding.

So, the issue before OATH Judge Addison was whether the applicant meets the provisions of RCNY 2-

09(b)(3)(iii), nothing more.

Instead, by agreeing to list the applicant as the protected occupant the owner appears to have gotten

itself off the hook for thousands of dollars in rent overcharges. Also, is $2400 the correct "lawful legal

regulated rent for the unit" or is that a confection whipped up by the landlord? When the building

reaches code compliance and the Loft Board staff has to research the issue, it's possible that the actual

"lawful" rent is some other figure.

There have certainly been some more egregious stipulations that the Loft Board covers with the fig leaf

that it "neither accepts nor rejects the remaining terms of the stipulation of settlement." Indeed, there

have even been cases where the Loft Board rejects the stipulation outright as contrary to public policy.

However, this case has a cut-and-dried aspect this I find odious: I'll agree that you're the protected

occupant as long as you waive your right to contest the significant amount of money that I (probably

knowingly) overcharged you for the past seven or eight years.

In my view, the Loft Board should provide guidance to OATH judges to limit the nature of stipulations

that can be crafted to "settle" a case.

NOTICE

A party aggrieved by a determination of the Loft Board may file an application for recpnsideration 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 of the application shall be completed in accordance with 29 RCNY § 1-06. 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 complete reconsideration application must be received by the Loft Board within 30 calendar days after the mailing date of the determination sought to be reconsidered."

Pursuant to 29 RCNY §1-07(d):

A LoftBoard 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 of the 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 sought; (ii) if the Loft Board denies the reconsideration application, the underlying order shall be deemed the final agency determination; and (iii) if the Loft Board decided the reconsideration application by remanding the matter to the hearing officer for further proceeding, 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.