I.Question Presented

Whether unregulated holdover tenants may invoke the protection of the Martin Act to avoid eviction by the sponsor of a non-eviction condominium conversion plan, which has been accepted for filing by the Attorney General?

II.Introduction

A.Parties

Petitioner-landlord, 322 West 57th Owner LLC ("petitioner"), is the owner of a residential building located at 322 West 57th Street (known as "the Sheffield"), New York, New York ("the building") and is the sponsor of a condominium conversion plan of the Sheffield.

Respondents are tenants residing at the Sheffield, who are holding over beyond the time of their expired unregulated leases. Twenty-three (23) distinct holdover proceedings brought by petitioner are currently pending against respondents, with the proceedings against respondent Penhurst Productions, Inc. ("Penhurst"), having the lowest index number.^[FN1] Because all respondents are in substantially similar circumstances, all parties have stipulated to be bound by the court's decision on the case against Penhurst, including the motion to dismiss on Martin Act grounds.

[*2]B.Factual Background

Petitioner, as sponsor, is attempting to convert the Sheffield from rental to condominium ownership. In June 2005 petitioner submitted a proposed offering plan ("the plan") to the New York State Department of Law for review by the New York State Attorney General ("Attorney General"), and provided the tenants of the Sheffield with copies of the plan. All respondents reside in unregulated apartments; their leases have now expired and have not been renewed.

The circumstances of all respondents are similar to those of Penhurst and Rovelli. The initial residential lease of respondent Penhurst ran from August 9, 1997 through August 31, 1999 at a rent of $3,575, with the president and sole shareholder residing in the apartment, and was repeatedly renewed until the most recent renewal lease expired on February 28, 2006. Respondent Rovelli's initial lease ran from August 9, 1997 through August 31, 1999 at a rent of $2,610, and was successively renewed until the most recent renewal lease expired on February 28, 2006. Petitioner

has not accepted rent from any of the respondents since the expiration of their most recent renewal leases (which would have created a month-to-month tenancy).

On June 22, 2006, the petitioner's condominium conversion plan was accepted for filing by the Attorney General. Subsequent to the submission of the plan, and prior to its acceptance by the Attorney General, the petitioner served notice on the respondents that it would not be renewing their leases. When the respondents did not vacate, petitioner commenced these summary holdover proceedings in Housing Court.

Respondents contest petitioner's efforts to recover possession of their apartments. Respondents Penhurst and Rovelli have stated that they "have been eagerly awaiting the filed offering plan" so that they could have "the opportunity to purchase the apartment[s]."^[FN2]

C.Procedural History

These 23 holdover proceedings were commenced on or after March 2006, by petitioner against respondents. All are what are commonly known as "no cause" holdover proceedings, based only upon the expiration of respondents' leases and petitioner's claims that their apartments are not subject to rent control or rent stabilization. Petitioner does not alleged that respondents have breached any obligations of their leaseholds, seeks a final judgment awarding it possession of the respondents' apartments and an award of use and occupancy.

Respondents allege as a defense and counterclaim that the proceedings should be dismissed pursuant to General Business Law (GBL) § 352-eeee et seq. (the "Martin Act") because respondents are protected from eviction pursuant to that section as the Attorney General has accepted petitioner's condominium conversion plan for filing.^[FN3] These proceedings were referred to Housing Part H for [*3]trial.^[FN4]

At this point, no final judgments of possession nor warrants of eviction have been issued and respondents remain in possession of their apartments.^[FN5]

III.The Martin Act

A.General Legislative Purpose

The Martin Act, GBL § 352-eeee et seq., is intended to regulate the process of conversion of rental buildings to cooperative or condominium ownership. The statute was designed to promote the conversion of these rental buildings in an orderly manner while at the same time protecting affected tenants against the forced dislocations which might result from these conversions, particularly in the City of New York where there is a shortage of housing in general, and affordable housing, in particular (Legislative Finding, L 1982, ch 555, § 1). However, affordable housing was not the only consideration behind the legislation; the Legislature was also cognizant of the disruptive effects of conversions on the life and welfare of all tenants who may become displaced in the process (id.). The legislative history of the Martin Act supports an expansive view of the statute, particularly as it relates to the protection of existing tenants in buildings undergoing a conversion plan.^[FN6]

[*4]B.Anatomy of a Conversion Plan

A conversion plan has three main steps: (1) First, the sponsor must submit a plan for filing with the Attorney General and distribute the plan to tenants (GBL § 352-eeee [2] [f]; see also GBL § 352-e [1] ); if, following a review, the Attorney General accepts the plan for filing, the sponsor can then enter into purchase contracts for the dwelling units (GBL § 352-eeee [2] [c] [i]; see also GBL

§ 352-e [1], [2]); (3) when the sponsor has obtained the requisite number of contracts, the plan can be declared effective by the Attorney General (GBL § 352-eeee [1] [b], [c]; [2] [c] [i]).

Petitioner has elected to file a non-eviction plan.^[FN7] Tenants in occupancy on the date the Attorney General accepts a non-eviction plan for filing are entitled to receive a purchase offer from the sponsor in a non-discriminatory manner (GBL § 352-eeee [2] [c] [i]).^[FN8] The sponsor must obtain written purchase agreements for 15% of the dwelling units from "bona fide tenants in occupancy" or from "bona fide purchasers who represent that they intend . . . [to] occupy the dwelling unit when [*5]it becomes vacant" before a "non-eviction plan" may be declared effective (id.).^[FN9]

The sponsor of a non-eviction plan is permanently barred from evicting "non-purchasing tenants" based on "expiration of tenancy"^[FN10] and from subjecting such tenants to unconscionable rent increases (GBL § 352-eeee [2] [c] [ii], [iv]; see generally Langdale Owners Corp. v Lane, 166 Misc 2d 439, 441-443 [App Term, 2d Dept 1995]; Paikoff v. Harris, 185 Misc 2d 372, 377 [App Term, 2d Dept 1999]). A "non-purchasing tenant" is "[a] person who has not purchased under the plan and who is a tenant entitled to possession at the time the plan is declared effective" (GBL § 352-eeee [1] [e]).^[FN11]

Further, GBL § 352-eeee (4) prohibits "any person" from engaging in conduct which "substantially interferes with or disturbs the comfort, repose, peace or quiet of any tenant in his use or occupancy of his dwelling unit" (GBL § 352-eeee [4]).^[FN12]

C.Protections Afforded to Tenants in Non-Eviction Plans [*6]

The Martin Act provides a number of protections to existing tenants in buildings undergoing conversion under a non-eviction plan, including: (1) the right to purchase one's apartment or the shares allocated thereto (GBL § 353-eeee [2] [c] [i]); (2) the corresponding right to be free from eviction in the event one chooses not to purchase their dwelling or for any other reason applicable to "expiration of tenancy" (GBL § 353-eeee [2] [c] [ii]); and (3) protection from unconscionable rent increases, harassment, and other conduct which "substantially interferes" with the use and occupancy of one's dwelling (GBL § 353-eeee [2] [c] [iv]; [4]).

The right to purchase accrues or vests to tenants in occupancy at the time that the Attorney General "accepts" the sponsor's offering plan for the building at issue (GBL § 353-eeee [2] [c] [i]; Rubenstein v 160 West End Owners Corp., 74 NY2d 443, 445-446 [1989]; Weinstein v Hohenstein, 69 NY2d 1017, 1019 [1987], affg 122 AD2d 842, 844 [1st Dept 1986]; DeKovessey v Coronet Props. Co., 69 NY2d 448, 457 [1987]; Consolidated Edison v 10 West 66th Street Corp., 61 NY2d 341, 344-345 [1984]; Applebaum v Applebaum, 142 AD2d 300, 302 [1st Dept 1988]). Thus, the date for determining whether a party is a "tenant in occupancy" entitled to participate in cooperative conversion is the date the offering plan is accepted for filing by the Attorney General (Manolovici v 136 East 64th Street Assoc., 70 NY2d 785, 787 [1987]).^[FN13] At that point, the statute mandates that these tenants "shall" receive a good faith offer to purchase on a non-discriminatory basis (GBL § 352-eeee [1] [b]; [2] [c] [i]).

Closely akin to the right to purchase is the tenant's right to be protected from eviction. GBL § 353-eeee (2) (c) (ii) provides unequivocally that "[n]o eviction proceedings will be commenced at any time against non-purchasing tenants for failure to purchase or any other reason applicable to expiration of tenancy" except in the case of "non-payment of rent, illegal use or occupancy of the premises, refusal of reasonable access to the owner or a similar breach" (id. [emphasis added]). A "non-purchasing tenant" is defined as "a tenant entitled to possession at the time the plan is declared effective" (GBL § 352-eeee [1] [e] [emphasis added]). Accordingly, petitioner argues that respondents are not protected from eviction because the offering plan has not yet been declared effective. Such an interpretation is inconsistent with the Martin Act's purpose.

In interpreting a statute, the purpose of the act and the objectives to be accomplished must be considered (People of the State of New York v Cypress Hills Cemetery, 208 AD2d 247, 251 [2d Dept 1995]). In effectuating that objective, the courts are first bound to ascertain the legislative intent from the literal reading of the words of the statute (McKinney's Cons Laws of NY, Book 1, Statutes §§ 92 [b], 94; Patrolmen's Benevolent Assn. v City of New York, 41 NY2d 205, 208 [1976]). Where the legislative intent is clear and unambiguous from the language of the statute, the words used should be construed so as to give effect to their plain meaning (Matter of State of New York v Ford Motor Co., 74 NY2d 495, 500 [1989]) and resort to extrinsic evidence, such as the legislative history of the statute, is inappropriate (McKinney's Cons Laws of NY, Book 1, Statutes § 120; Giblin [*7]v Nassau County Med. Center, 61 NY2d 67, 74 [1984]). However, there are limits to literalism; "'in the exposition of a statute, the intention of the lawmaker will prevail over the literal sense of the terms; and its reason and intention will prevail over the strict letter'" (Sanders v Winship, 57 NY2d 391, 396 quoting Kent's Comm [13th ed], at 462 [1982]). The Court of Appeals has held that although a statute is clear and unambiguous on its face, "the absence of ambiguity facially is never conclusive. Sound principles of statutory interpretation generally require examination of a statute's legislative history and context to determine its meaning and scope" (Uniformed Firefighters Assn. v Beekman, 52 NY2d 463, 471 [1981]; New York State Bankers Assn. v Albright, 38 NY2d 430, 434 [1975]). As such, where extensive legislative history would show that the literal reading proposed would frustrate the statutory purpose, one may look to the presumed lawful intent of the Legislature (Commissioner of Social Services v Jessie B, 111 Misc 2d 617, 620 [Fam Ct, NY County 1981]). Additionally, not all statutory language must in all circumstances be literally or mechanically applied, when such application would cause an anachronistic or absurd result contrary to the contextual purpose of the enactment (Doctors Council v New York City Employee's Retirement System, 71 NY2d 669, 675 [1988]; All State Insurance Co. v Libow, 106 AD2d 110, 114 [2d Dept 1984], affd 65 NY2d 807 [1985]). Applying these principles to the relevant sections of the Martin Act, the prohibition against evictions contained in GBL § 353-eeee (2) (c) (ii) must apply to tenants in occupancy at the date of the offering plan's acceptance.

The Martin Act is intended to protect tenants in occupancy from eviction "during the process of conversion" (Legislative Finding, L 1982, ch 555, § 1). A reading of GBL § 353-eeee (2) (c) (ii) and § 352-eeee (1) (e) to imply that tenants in occupancy may be evicted from their dwellings after the date of acceptance and prior to the effective date, but are protected from eviction afterward, is neither logical nor consistent with the legislative intent of the Martin Act. It defies logic to suggest that tenants who possess the right to purchase their apartments, upon the acceptance of the plan, may at the same time be evicted from their apartments, cutting off their right to purchase. Such a result is inconsistent with and would frustrate the legislative purpose an intent of the Act.

Respondents also claim protection from eviction under GBL § 353-eeee (4) which prohibits "any person" from engaging in "any course of conduct . . . which substantially interferes with or disturbs the comfort, repose, peace or quiet of any tenant in his use or occupancy of his dwelling unit" (GBL § 352-eeee [4] [emphasis added]). GBL § 352-eeee (4), which protects tenants subject to a conversion plan from harassing conduct such as interference with essential services, is sufficiently broad to also provide protection from evictions.

As previously stated, where the legislative intent is clear and unambiguous from the language of the statute, the words used should be construed so as to give effect to their plain meaning (Matter of State of New York v Ford Motor Co., 74 NY2d at 500). Certainly, removing or attempting to remove a tenant from his apartment constitutes conduct which "substantially interferes with . . . his use or occupancy of his dwelling unit" within the plain meaning and language of GBL § 352-eeee (4).^[FN14] Such an interpretation is supported by the legislative intent underlying the Martin Act to [*8]restrict evictions and dislocations of affected tenants residing in buildings subject to a plan of conversion (see Legislative Finding, L 1982, ch 555, § 1).

Thus, two provisions of the Martin Act, GBL § 352-eeee (2) (c) (i), (ii) and § 352-eeee (4), protect tenants in occupancy in a building undergoing conversion, upon acceptance of the offering plan, from eviction or removal absent some good cause shown, such as nonpayment of rent or similar breach.

IV.Respondents Fall Within the Class of Individuals Protected by The Martin Act

A."Tenants In Occupancy" Are Protected by the Martin Act

The rights and protections afforded under the Martin Act accrue at the time the plan is accepted for filing to those individuals deemed "tenants in occupancy," a term which is not otherwise defined in the statute (see GBL § 353-eeee [2] [c] [i]; Weinstein v Hohenstein, 69 NY2d at 1017 [1987]; DeKovessey v Coronet Props. Co., 69 NY2d at 457).

The Court of Appeals has held that the "tenant in occupancy" must be "in actual possession and occupying the unit at the time the conversion plan is accepted for filing [the critical date'] in order to qualify at all" (DeKovessey, supra ), but has also found "tenant in occupancy" status where the [rent regulated] apartment in question was not actually used as the primary residence (see Manolovici v 136 E. 64th St. Assocs., 70 NY2d 785, 515 NE2d 1212, 521 NYS2d 414 [1987]; Burns [*9]v 500 E. 83rd St. Corp., 59 NY2d 784, 451 NE2d 475, 464 NYS2d 728 [1983]). The lynchpin of the analysis is whether the tenant has "maintained a sufficient nexus with the apartment as of the critical date to qualify as a tenant in occupancy" (Manolovici, 70 NY2d at 787; Lieberman v Henry Norman Realty, 186 AD2d 790, 792, 589 NYS2d 88 [1992]).

(Steier v. Schreiber, 25 AD3d 519, 521-522 [1st Dept 2006], lv to appeal denied 6 NY3d 714

[2006]).

In the absence of a precise statutory definition, the issue of who is a "tenant in occupancy" under the Martin Act often turns upon an analysis of whether an individual has a sufficient connection with the apartment to qualify as a "tenant in occupancy" within the meaning of GBL § 352-eeee (see Manolovici v 136 East 64th Street Assoc., 70 NY2d at 787 [divorcing husband had coequal right with his wife to purchase shares as "tenants in occupancy" since he maintained sufficient nexus with rent stabilized apartment, which was actually being used to raise and shelter his family, on "critical date" of acceptance of plan by Attorney General]); Steier v Schreiber, 25 AD3d at 521-522 ["where there are adverse claims to the status of tenant in occupancy, resolution of the issue should turn on a practical analysis of the relationship of the competing parties to the demised property, not necessarily on whose name happens to appear on the lease"] citing McSpadden v Dawson, 117 AD2d 453, 457 [1st Dept 1986]; Lack v Daven Realty Corp., 144 AD2d 236 [1st Dept 1988] [individual who never physically occupied subject apartment and was not named lessee could be "tenant in occupancy" under GBL § 352-eeee]; see also Baron v Sherwood, 124 AD2d 527, 528 [1st Dept 1986]).

Primarily, tenants in occupancy must be in actual possession and occupying the unit at the time the plan is accepted for filing to quality (Consolidated Edison v 10 West 66th Street Corp., 61 NY2d at 344-345; accord Rubenstein v 160 West End Owners Corp., 74 NY2d at 445-446 [where deceased tenant of record died before apartment was offered for sale under subsequently accepted cooperative conversion plan, decedent's estate utilizing apartment for storage of decedent's personal property was not tenant in occupancy entitled to purchase shares allocated to decedent's dwelling; such result would be inconsistent with legislative intent]; DeKovessey v Coronet Props. Co., 69 NY2d at 457 [although decedent was "tenant in occupancy" at time conversion plan was accepted for filing by Attorney General and would have had right to purchase apartment shares, decedent's estate did not acquire right to do so where tenant had not exercised the right before death; such result would frustrate legislative intent of protecting "tenants in occupancy" from dislocation and unjust eviction]).

B.Respondents Are "Tenants In Occupancy" Entitled to Protection

The court must consider whether respondents, as "holdover tenants" whose leases the petitioner has declined to renew, are precluded from invoking the protections of GBL § 352-eeee (2) (c) and (4). It is undisputed that the petitioner has not accepted rent from respondents, which would have created month-to-month tenancies. Petitioner thus argues that it had the right to refuse to renew the respondents' leases, inasmuch as they are unregulated tenants, and is therefore entitled to remove them from occupancy of the subject apartments. While this may be true with respect to [*10]holdover proceedings generally, a much broader standard is applied to tenants under conversion plans (see Libani v Concorde & CIE, 269 AD2d 213 [1st Dept 2000] [landlord may not evict plaintiff tenants on grounds that lease had expired since GBL § 352-eeee (2) (c) (ii), incorporated into offering plan as a matter of law, in non-eviction plans, prohibits eviction proceedings against nonpurchasing tenants for failure to purchase or expiration of tenancy]; Bruenn v Cole, 165 AD2d 443 [1st Dept 1991] [long-term occupant of apartment, rather than named tenant, was entitled to purchase shares allocated to apartment pursuant to cooperative conversion under circumstances where tenant did not exercise dominion and control over premises, and landlord-tenant relationship existed between occupant and partnership which acted as landlord immediately prior to cooperative conversion]; Lack v Daven Realty Corp., 144 AD2d 236 [whether plaintiff, who never physically occupied subject apartment but who was the assignee of named lessee, had sufficient connection to apartment to be "tenant in occupancy" within meaning of GBL § 352-eeee was an open question that required trial]).

An individual accorded the status of "tenant in occupancy" and hence entitled to purchase the shares allocated to an apartment under a conversion plan need not be a lessee (Steier v. Schreiber, 25 AD3d at 522, lv to appeal denied 6 NY3d 714 [status of tenant in occupancy depends on the relationship of the party to the demised premises, not necessarily on whose name happens to appear on the lease]; see also Libani v Concorde & CIE, 269 AD2d 213; Bruenn v Cole, 165 AD2d 443; Lack v Daven Realty Corp., 144 AD2d 236).

The fact that a holdover proceeding has been commenced against an individual to recover possession does not prevent the occupant from being accorded the status of "tenant in occupancy" and hence entitled to purchase the shares allocated to the premises under a conversion plan (see Steier v. Schreiber, 25 AD3d at 522 [although holdover proceeding had been commenced against plaintiff prior to conversion of subject premises, plaintiff, who had been the roommate of occupant-lessee, was the "tenant in occupancy" of a rent-stabilized apartment, based on her ongoing occupation of the apartment as her primary residence, and was entitled to purchase pursuant to condominium conversion plan]).^[FN15]

A number of recent court decisions have considered a tenant's statutory right to purchase an apartment on conversion where the tenant is allegedly in default under the lease or the owner otherwise has the right to terminate the leasehold. "The courts have uniformly held that if such action has not been taken and a favorable [judicial] determination received as of the date the offering plan is accepted for filing (and the leasehold thus expired) then the tenant qualifies as a 'tenant in occupancy' and is granted the exclusive right to purchase" (Di Lorenzo, NY Condo. and Coop. Law, 2d ed § 6.6 [1995], citing Hanson v 136 East 64th Street Assoc., 118 AD2d 486 [1st Dept 1986]; Lizby Assoc. v Baron, 130 Misc 2d 834, 835 [Sup Ct, NY County 1985]; 58 West 58th Street Tenant [*11]Assoc. v 58 West 58th Street Assoc., 126 Misc 2d 500 [Sup Ct, NY County 1984]; see also Steier v. Schreiber, 25 AD3d 519, lv to appeal denied 6 NY3d 714; Libani v Concorde & CIE, 269 AD2d 213; Eight Cooper Equities v Abrams, 143 Misc 2d 52, 54 [Sup Ct, NY County 1989]).

"[W]here a summary proceeding to recover possession of real property has been instituted, the landlord-tenant relationship may only be terminated by actual surrender of the premises" or by "issuance of a warrant of eviction" (Eight Cooper Equities v Abrams, 143 Misc 2d at 54 [citations omitted] [under Martin Act warehousing provisions, tenants or subtenants are counted as "bona fide" tenants for purposes of GBL § 352-eeee (2) (e), although summary proceedings had been commenced against them, until such time as there has been a final judgment and warrant of eviction issued]; cited with approval by Webb v Barskey, 9 Misc 3d 138[A], 2005 NY Slip Op 51748[U] [App Term, 2d Dept 2005]; see 1 Dolan, Rasch's Landlord and Tenant—Summary Proceedings §§ 10:8-10:9, at 453-454 [4th ed]).

Thus, the critical factor in determining the status of the respondents herein as of the date of acceptance of the plan by the Attorney General, is whether a final judgment and warrant of eviction has been issued, since "as a matter of law, the landlord-tenant relationship [is] not extinguished until the issuance of the warrant" (Eight Cooper Equities, 143 Misc 2d at 55, 56). In the absence of a judicial determination of the propriety of the landlord's rejection of the tenancy or subtenancy, the legality of the tenancy in question "must be presumed" (id. at 56).

Here, all respondents were bona fide tenants with existing leases at the time the proposed offering plan was submitted to the Attorney General and distributed to tenants in June 2005, and at no time was it alleged that respondents had breached the obligations under their leaseholds. Subsequent to the submission, and prior to the acceptance of, the plan by the Attorney General, the petitioner notified respondents that it would not be renewing their leases, and commenced these summary holdover proceedings to recover possession of the subject apartments. During the pendency of these proceedings, on June 22, 2006, the Attorney General accepted the offering plan. There has been neither the surrender of the premises by the respondents, nor has a final judgment of possession or a warrant of eviction been issued (see Eight Cooper Equities v Abrams, 143 Misc 2d 52). In the absence of a final judicial determination of the propriety of the petitioner-landlord's refusal to renew the respondents' leases, the legality of their tenancies in question must be presumed (id.). Accordingly, respondents herein are "tenants in occupancy" of the subject premises and are entitled to the protections of the Martin Act (GBL § 352-eeee [2] [c] [i], [ii]; [4]; see Eight Cooper Equities v Abrams, 143 Misc 2d 52).

C.The Legislature Intended to Protect Respondents

The conclusion that respondents are "tenants in occupancy" and entitled to the protections of the Martin Act finds support in the relevant legislative history to the Act.

As stated in Paikoff v Harris (185 Misc 2d 372), in construing provisions of General Business Law § 352-eeee, "[A] proper construction of the statute must be based upon an understanding of the protection that the Legislature intended to provide. It is a familiar principle that in construing a statute a court 'should consider the mischief sought to be remedied ... and ... should construe the act in question so as to suppress the evil and advance the remedy' (McKinney's Cons [*12]Laws of NY, Book 1, Statutes § 95; see, e.g., T.D. v New York State Off. of Mental Health, 228 AD2d 95, 106; Lincoln First Bank v Rupert, 60 AD2d 193, 197)" (id. at 376). When the legislative history is ameliorative in nature, the statute should be liberally construed so as to give effect to its beneficial purpose (People v Lexington Sixty-First Assoc., 38 NY2d 588, 595 [1976]; Paikoff v Harris, 185 Misc 2d at 376).

The legislative history of the Martin Act, GBL § 352-eeee et seq., supports an expansive interpretation of the statute, consistent with its articulated goal of "protecting tenants in possession who do not desire or who are unable to purchase the units in which they reside from being coerced into vacating such units by reason of deterioration of services or otherwise . . . restricting rents and evictions during the process of conversion . . . and other disruptive practices affecting all tenants during the conversion process which threaten the public health, safety and general welfare; and . . . prevent[ing] uncertainty, hardship and dislocation in connection with the conversion process . . . ." (Legislative Finding, L 1982, ch 555, § 1 [emphasis added]).

The interests of owner and tenant in a cooperative conversion are often divergent. The owner often has a financial incentive to "warehouse" apartments and to evict existing tenants in pursuit of the greater profits to be realized by selling units at prevailing market rates instead of selling to tenants at insider prices, while tenants, facing the prospect of dispossession and relocation, are often in a position of relatively little bargaining power (see Lizby Assoc. v Baron, 130 Misc 2d at 835). It is against this financial incentive to displace the nonpurchasing tenant that the Legislature sought to protect. Further, there is a public interest in avoiding such dislocations, and statutes promoting a public interest are to be liberally construed (see Forest Vistas Co. v Abrams, 103 AD2d 730 [1st Dept 1984], affd 64 NY2d 928 [1985]; Paikoff v Harris, 185 Misc 2d at 377).^[FN16]

Consequently, the finding that respondents are "tenants in occupancy" and entitled to the protections of the Martin Act is fully consistent with the letter and spirit of the relevant legislative history accompanying the Act itself. The situation faced by respondents herein is precisely the type of circumstance that the legislators wished to protect against in enacting the revisions to GBL § [*13]352-eeee in 1982.^[FN17] Respondents fall squarely within the class of persons protected from eviction as "tenants in occupancy" by both the plain language and the articulated legislative intent of the Martin Act, GBL § 352-eeee (2) (c) (ii) and § 352-eeee (4) (see Libani v Concorde & CIE, 269 AD2d 213; Eight Cooper Equities v Abrams, 143 Misc 2d 52, 54).

V.Dismissal of the Housing Court Proceedings Are Warranted

The rights afforded by the Martin Act accrued to respondents at the time the plan was accepted for filing. In the instant matter, it is undisputed that this triggering event took place on June 22, 2006. Having found respondents to be "tenants in occupancy," they are entitled to the protections of the Martin Act governing non-eviction plans in these holdover proceedings.

The Martin Act gives respondents the right to be free from eviction in the event they choose not to purchase their dwellings or for any other reason applicable to "expiration of tenancy" (GBL § 353-eeee [2] [c] [i], [ii]). The 23 proceedings herein are "no cause" holdover proceedings, based only upon the expiration of respondents' leases and petitioner's claims that their apartments are not subject to rent control or rent stabilization. Thus, the respondents may invoke the protections of § 353-eeee (2) (c) (ii) inasmuch as these proceedings are brought on account of the expiration of their tenancies.

Further, respondents are protected from any conduct which "substantially interferes" with their use and occupancy of the subject dwellings (GBL § 353-eeee [4]). Eviction or removal from their apartments constitutes a "substantial interference" with their use and occupancy of their dwelling units. Thus, tenants such as respondents may invoke GBL § 353-eeee (4) to protect them from eviction.

Where tenants are protected by the Martin Act, dismissal of Housing Court proceedings are warranted (Libani v Concorde & CIE, 269 AD2d 213 [landlord may not evict plaintiff tenants on grounds that lease had expired since GBL § 352-eeee (2) (c) (ii) prohibits eviction proceedings against nonpurchasing tenants for failure to purchase or expiration of tenancy]; Paikoff v. Harris, 178 Misc 2d 366, 372, 376, affd in part and mod in part 185 Misc 2d 372).

The Martin Act has been recognized as a defense to holdover proceedings (Paikoff v. Harris, 178 Misc 2d at 372, 376, affd in part and mod in part 185 Misc 2d 372 [in holdover proceedings based on expiration of tenancy, respondents were "non-purchasing tenants" under GBL § 352-eeee entitled to protection of Martin Act; landlord's petition dismissed]; see Geiser v Maran, 189 Misc 2d 442, 445 [App Term, 2nd Dept 2001] [Paikoff holding followed but distinguished on grounds that subject building was converted prior to effective date of Martin Act]; see, e.g. Pembroke Square Assoc. v Coppolla, 27 HCR 270A, NYLJ, May 5, 1999, at 32, col 6 [Civ Ct, Queens County][Martin [*14]Act defense considered but rejected on facts]; Parkchester Preserv. Co. v Hanks, 185 Misc 2d 786 [Civ Ct, Bronx County 2000] [holdover tenant was not protected as "non-purchasing tenant" under GBL § 352-eeee because tenant's leasehold began after effective date of plan, thus tenant had no right to continued occupancy]; Park West Village Assoc. v Nishoika, 187 Misc 2d 243 [App Term, 1st Dept 2000] [holdover tenant was not protected as "non-purchasing tenant" under GBL § 352-eeee because tenant did not lease the premises until approximately five years after conversion of the premises under the plan]).

As discussed, supra , the eviction or removal of a tenant in a building undergoing conversion, after acceptance of the plan, is prohibited by the terms of the Martin Act (GBL § 352-eeee [2] [c] [ii]; [4]), absent some good cause shown, such as nonpayment of rent or similar breach (see GBL § 352-eeee [2] [c] [i], [ii]). Respondents are the subjects of "no cause" evictions as their leases were not renewed through no fault or breach on their part; petitioner simply declined to renew their leases. Consequently, the Martin Act, GBL § 352-eeee (2) (c) (i), (ii) and § 352-eeee (4), is a valid defense to eviction proceedings in buildings undergoing conversion once the plan is accepted for filing (Libani v Concorde & CIE, 269 AD2d 213; Paikoff v. Harris, 178 Misc 2d 366, 372, 376, affd in part and mod in part 185 Misc 2d 372; see also Steier v. Schreiber, 25 AD3d 519, lv to appeal denied 6 NY3d 714; Geiser v Maran, 189 Misc 2d 442, 445; Eight Cooper Equities v Abrams, 143 Misc 2d 52, 54).

VI.Conclusions

In light of the Attorney General's acceptance of the non-eviction plan for the subject residential building, respondents are protected from "no cause" holdover eviction proceedings by the Martin Act (GBL § 352-eeee [2] [c] [ii], § 352-eeee [4]). Accordingly, the petitioner's holdover proceedings against respondents are dismissed.

This constitutes the decision and order of this court.

The clerk shall serve a copy of this decision and order upon all parties.

Dated: New York, NY

March 19, 2007___________________________

J.H.C.

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