The property at the heart of this dispute was leased to defendants Pearson Music and Sound Design by a commercial lease agreement in 2020. A year later, in August 2021, plaintiff, Wisdom Global Realty New York LLC, acquired the property and became the new lessor.

In 2020, defendant Chad Pearson (Pearson Music's guarantor) applied for coverage under the New York City Loft Law. In the Office of Administrative Trials and Hearings (OATH) Loft Law coverage proceeding, Administrative Law Judge (ALJ) Astrid Gloade recommended that Pearson be granted coverage as a protected loft tenant. (NYSCEF No. 68 at 18 [pdf pagination].)

On motion sequence 001, plaintiff moved to dismiss defendants' affirmative defenses and first counterclaim. This court granted the motion on the record after oral argument in February 2025. (See NYSCEF No. 49].)

After this court decided motion sequence 001, the Loft Board adopted ALJ Gloade's recommendation on March 20, 2025, and held that Pearson is a protected tenant and that the unit is an interim multiple dwelling.

On motion sequence 002, defendants now move to renew this court's decision on the first, fourth, and sixth affirmative defenses. Defendants also move to reargue this court's decision on the fourth, fifth, and sixth affirmative defenses and their first counterclaim. The motion is granted in part and denied in part.

On motion sequence 001, this court held that "absent the final determination from the Loft Board regarding Mr. Pearson's loft tenant status, this [c]ourt must dismiss the affirmative defense of res judicata." (NYSCEF No. 55 at 19 [transcript].)

Defendants now point to the newly issued Loft Board order, that determined that Mr. Pearson has loft-law protected status. (NYSCEF No. 57 at 5.) But regardless of the protected status, whether Pearson is protected is of no matter. The determination about protected status is not a final determination about whether defendants owe arrears to plaintiff—the purpose of this action. The branch of the motion to renew based on the res judicata defense is denied.

On the fourth affirmative defense, defendants assert that plaintiff has failed to state a cause of action. On motion sequence 001, plaintiff argued that it pleaded a viable cause of action because it "is pursuing a money judgment based on a contract violation of the commercial lease." (NYSCEF No. 55 at 20.) Defendants countered that "[p]laintiff lacks a proper certificate of occupancy to collect rent under Multiple Dwelling Law Section 301 and 302" and that those sections prohibit an owner from collecting rent if the building has no certificate of occupancy allowing for residential use. (Id. at 21.)

On motion sequence 001, this court concluded that §§ 301 and 302 did not apply because the building had not yet been determined to be a multiple dwelling. (NYSCEF No. 66 at 21 [transcript].) The Loft Board has since determined that the unit is a multiple dwelling. The question therefore becomes whether §§ 301 and 302 apply to occupancies and rent accrued before defendant's unit was determined to be an interim multiple dwelling (IMD) unit.

Defendants argue that absent a residential certificate of occupancy, an owner of an IMD may not charge its tenant rent. (See MDL §§ 301, 302.) Plaintiff contends that this rule applies only after the Loft Board has determined the unit is an IMD. On reply, defendants essentially argue that plaintiff may not charge rent so long as the unit is an IMD, even if the board has not officially determined that it is an IMD. The court agrees with defendants.

MDL § 301 provides that "[n]o 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." MDL § 302 provides that for the period in which MDL § 301 is violated, "[n]o rent shall be recovered by the owner of such premises for said period." If the outstanding noncompliance is a failure to obtain the residential certificate of occupancy, the owner may still collect rent. (County Dollar Corp. v Douglas, 160 AD2d 537, 538 [1st Dept 1990] ["While the statute allows owners to collect rent despite the lack of an appropriate certificate of occupancy, it specifically conditions that relief upon compliance by the owner with the Loft Law [MDL § 285]."].)

This court concludes that MDL §§ 301 and 302 do apply to the period before a unit is officially determined to be an interim multiple dwelling. The Multiple Dwelling Law does not provide that a unit is subject to the MDL only upon a Loft Board determination that the unit is an IMD. The statute suggests otherwise—that such a determination is a sufficient, but not a [*2]necessary, condition to bring that unit within the auspices of MDL. Indeed, provisions require owner to act merely upon tenant's application for coverage, for example to obtain an alteration permit. (See MDL § 284 [1] [vi].)

Nor does MDL § 285 (1) support plaintiff's position. That provision allows for an owner to collect rent if, aside from the certificate of occupancy, the owner is otherwise in compliance with the MDL. But plaintiff has not shown that it complied, or took steps to comply, with the MDL's requirements once plaintiff submitted the registration application in 2020. And tenant stopped paying rent only in 2021, after owner already incurred obligations under MDL which it was required to satisfy to collect rent.

The branch of defendants' motion to reargue the branch of plaintiff's motion to dismiss the fourth affirmative defense is granted. On reargument, the motion is denied. The fourth affirmative defense is reinstated.

Defendants argue that plaintiff sought to dismiss only the portion of the fifth affirmative defense for laches and not for waiver and estoppel. According to defendants, plaintiff did not address waiver and estoppel in its opening papers, but only in its reply papers. (NYSCEF No. 57 at 11.) Defendants contend that they had no opportunity to argue on those issues. Plaintiff argues that its notice of motion stated that plaintiff sought to dismiss the entire defense, regardless what plaintiff addressed in its memorandum of law. (NYSCEF No. 61 at 12.) The court agrees with defendants.

In its memorandum of law on mot seq 001, plaintiff did not submit arguments about whether waiver and estoppel defenses should be dismissed. It focused solely on the laches defense. (NYSCEF No. 20 at 17-18 [plaintiff's memo of law mot seq 001].) Plaintiff provided no basis in its opening papers to dismiss those defenses. Defendants thus did not make arguments on those defenses. (NYSCEF No. 38 at 10 [defendants' memo in opposition mot seq 001].) The court also notes that plaintiff offers no substantive argument on this motion for why those defenses should be dismissed.

The branch of defendants' motion to reargue the branch of the motion to dismiss the waiver and estoppel defenses is granted. On reargument, the motion to dismiss those defenses is denied without prejudice, and those defenses are reinstated.

On motion sequence 001, this court held that the Loft Board does not have primary jurisdiction because its focus is on rent adjustment not claims for "retrospective rent and use and occupancy." (NYCEF No. 66 at 24 [oral argument transcript].) Defendants now argue that this court improperly decided to determine the merits of this defense under CPLR 3212 and that because the issues in this action focus on tenant's status as a Loft Law tenant, this action would be better brought before the Loft Board. (NYSCEF No. 57 at 12.) Plaintiff argues that tenant's Loft Law status is not the subject of this action; rather, this action, according to plaintiff, is about defendants' contractual obligation to pay rent. (NYSCEF No. 61 at 12-13.)

The court agrees with plaintiff. Although the Loft Board's determination that tenant is protected under the Loft Law is highly relevant—such that defendants use the MDL as an [*3]affirmative defense— plaintiff brings this action for nonpayment of rent. Defendants offer no authority that the Loft Board has primary jurisdiction over breach-of-contract cases when those cases relate to MDL issues already resolved by the Loft Board, such as the question of Pearson's coverage. (Cf. Brown v Decker Assoc. LLC, 2016 NY Slip Op 51087(U), *1 [Sup Ct, NY County 2016] [holding that Loft Board has primary jurisdiction to hear a claim for Loft Law coverage].)

The branch of defendants' motion to renew/reargue dismissal of their sixth affirmative defense is denied.

Defendants allege that "(i) the Plaintiff failed, on several occasions, to provide heat, and (ii) this failure was intended to cause the Defendants to vacate the Premises and, or, waive their rights under the Loft Law." (NYSCEF No. 57 at 13.) This court dismissed that counterclaim. This court found that email correspondence showed that although there were heating issues with defendants' apartment, the correspondence did not support defendants' claim that "[p]laintifff refused to provide heat to their—to its unit only or their unit only. On each occasion, Plaintiff properly addressed the heating issues in Defendants' unit and provided explanations." (NYSCEF No. 66 at 27 [oral argument transcript.) The court further noted that "[a]t times [plaintiff temporarily halted the heating service or emergency repairs, but that is permitted by Article 26 of the lease." (Id.) This court thus concluded that defendants had not shown that plaintiff "intentional or willfully failed to provide heat to [d]efendants' unit." (Id.)

Defendants argue that this court improperly dismissed the claim on the merits although defendants were not yet required to prove their claim. (NYSCEF No. 57. at 14.) Plaintiff contends that the court did not improperly weigh the evidence but instead found that "Defendants' alleged facts were inherently implausible." (NYSCEF No. 61 at 13-14.)

The court agrees with plaintiff. Defendants' allegations on this counterclaim were conclusory or speculative. (See NYSCEF No. 5 at ¶¶90-91 [counterclaim allegations "upon information and belief"]; NYSCEF No. 24 at 4 [Pearson's affidavit on mot seq 001].) This court concluded, based on the emails before it, that plaintiff provided evidence refuting defendants' contention that plaintiff intended to harass them. The branch of defendants' motion to reargue dismissal of their first counterclaim is denied.

Accordingly, it is

ORDERED that the branch of defendants' motion seeking to renew this court's February 2025 order is granted with respect to the disposition of the first and fourth affirmative defenses, and is denied with respect to the sixth affirmative defense; and it is further

ORDERED that the branch of defendants' motion seeking to reargue this court's February 2025 order is granted with respect to the disposition of the fourth affirmative defense and the waiver and estoppel aspects of the fifth affirmative defense, and is denied with respect to the disposition of the sixth affirmative defense and the first counterclaim; and it is further

ORDERED that on renewal, this court adheres to the dismissal of the first affirmative defense, and the court reinstates the fourth affirmative defense; and it is further

ORDERED that on reargument, this court reinstates the fourth affirmative defense and the waiver and estoppel aspects of the fifth affirmative defense; and it is further

ORDERED that the parties shall appear before the court for a telephonic preliminary conference on Tuesday, September 12, 2025.