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Re: New Rulings On Tenants Of Sponsor - continued

Posted by Mark Smith on May 31, 1999 at 02:49:49:

In Reply to: New Rulings On Tenants Of Sponsor - N.Y. Times posted by Mark Smith on May 31, 1999 at 02:44:18:

Joel E. Miller, a Queens lawyer who specializes in co-ops and condominiums, said that most co-op and condominium lawyers believe that Judge Finkelstein's decision was flawed because it was based on an erroneous interpretation of a critical term in the law.

Under the Martin Act, Mr. Miller said, tenants who rent apartments from a "purchaser under the plan" subsequent to a conversion are not entitled to protected status. In practice, he said, that has generally been interpreted to mean that tenants occupying their apartments at the time of conversion are protected by the Martin Act, while those who rent subsequent to the conversion are not, regardless of who they rent from.

Mr. Miller explained, however, that what Judge Finkelstein did in his decision was to declare that a sponsor who is, in legal terminology, a "holder of unsold shares" was not a "purchaser under the plan." The judge then concluded, Mr. Miller said, that tenants who rent from sponsors even those who rent after the conversion are protected by the Martin Act because they are not renting from a "purchaser under the plan."

Housing Court judges in two recent cases, however, declined to adopt Judge Finkelstein's interpretation of the law.

In a decision issued last month in a case known as Pembroke Square Associates v. Coppola, Judge Ellis Franke of the Housing Court in Queens ruled that a sponsor could indeed be considered a "purchaser under the plan" because of the way that phrase is defined in the law itself.

"That definition only requires that the 'purchaser' be one who owns the shares to the apartment," Judge Franke wrote in his decision.
Accordingly, he ruled, a tenant who rents from a sponsor subsequent to conversion is not protected by the Martin Act.

A similar conclusion was reached by Judge Bruce M. Kramer in Manhattan in a decision issued on May 12. In that case, Judge Kramer pointed out that there was no evidence of any legislative intent to provide Martin Act

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