ORDER

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

BYG REALTY CORP.

ORDER

Loft Board Order No.: 4598

Docket No.: R-0350

RE: 979-987 Dean Street Brooklyn, New York

IMD No. None

Challenged Order No. 4533 (Docket No. TR-1148)

The New York City Loft Board ("Loft Board") accepts the Report and Recommendation of Michael M. Bobick, Assistant General Counsel, dated January 5, 2017 ("Report") .

On June 16, 2016, the Loft Board issued Loft Board Order No. 4533 ("Order") which found: 1) that 969-975, 979-987 Dean Street and 1070-1078 Pacific Street in Brooklyn, New York ("Buildings") constitute a horizontal multiple dwelling ("HMD"); 2) the Buildings contain three interim multiple dwelling ("IMD") units: the ground floor of 969-975 Dean Street, the first and second floors of 979-987 Dean Street and the second floor of 979-987 Dean Street (collectively "Units"); 3) that the rooftop space on 1070-1078 Pacific Street, also known as 979B Dean Street, is part of ground floor unit of 969-975 Dean Street and is considered one unit; and 4) Ms. Nicola Lopez, Mr. Kellam Clark and Mr. Nathan Ismael Randal-Weeks are the protected occupants of their respective units. Pursuant to a notice of default dated February 24, 2014, the Office of Administrative Trials and Hearings declared BYG Realty Corp. ("Owner"), the owner of the Buildings, in default.

On July 22, 2016, Owner filed a reconsideration application ("Reconsideration") seeking review of the Order.

Pursuant to Title 29 of the Rules of the City of New York § 1-06(i)(3), following the issuance of a Loft Board order, an affected party who has not moved to vacate a default determination in the underlying proceeding must demonstrate that (i) extraordinary circumstances existed for its failure to timely file an answer and (ii) there is a substantial likelihood of success on the merits of the defense in order to vacate its default. For the reasons explained in the Report, Owner failed to meet this requirement.

Accordingly, the Reconsideration is denied. All of the provisions of the Order remain in full force and effect.

The Loft Board directs Owner to register the Buildings, Units and protected occupants as follows:

BuildinQ Unit Protected Occupant 969-975 Dean Street Ground floor of (including the rooftop space Nicola Lopez

on 1070-1078 Pacific Street also known as 979B Dean Street)

979-987 Dean Street First and second floors Kellam R. Clark 979-987 Dean Street Second floor Nathan Ismael Randal-Weeks

Owner is directed to file a registration application consistent with the above and to pay the applicable registration fees within thirty (30) days of the mailing date of this Order.

If Owner fails to register within 30 days of the mailing, the Loft Board directs the staff to:

issue an IMD number for the Buildings; register the Units as IMD units and Ms. Lopez, Mr. Clark and Mr. Randal-Weeks as protected occupants of their respective units; and . collect applicable registration fees and late fees.

DATED: January 19, 2017

Renaldo Hylton Chairperson

Board Members Concurring: Carver, Roche, Hernandez, Delaney, Schachter, Shelton, Hylton

Board Members Absent: Barowitz, Bolden-Rivera

DATE LOFT BOARD ORDER MAILED: JAN 2 7 2011

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

BYG REALTY CORP.

Michael M. Bobick, Assistant General Counsel

REPORT AND RECOMMENDATION

Docket No. R-0350

RE: 979-987 Dean Street Brooklyn, New York

IMD No. None

Challenged Order No. 4533 (Docket No. TR-1148)

On July 22,2016, BYG Realty Corp. ("Owner"), the owner of the group of buildings identified on the underlying coverage application as 979 Dean Street, 981 Dean Street, 983A Dean Street and 979B Dean Street, also known as 1070-1078 Pacific Street, Brooklyn, New York, filed a reconsideration application ("Reconsideration") seeking review of Loft Board Order No. 4533 ("Order"), dated June 16, 2016.

On September 19, 2016, Nicola Lopez, Gandalf Gavan Riecks, Kellam Clark, Elmore Richmond and Nathan Ismael Randal-Weeks ("Tenants") filed an answer in opposition. On October 12, 2016, Owner filed a reply to Tenants' answer. On October 19, 2016, Tenants' filed a response to Owner's reply.

BACKGROUND

On June 16, 2016, the Loft Board issued the Order, which found: 1) that 969-975,979-987 and 1070-1078 Pacific Street ("Buildings") constitute a horizontal multiple dwelling ("HMD"); 2) the Buildings contain three interim multiple dwelling ("IMD") units: the ground floor of 969-975 Dean Street, the first and second floors of 979-987 Dean Street and the second floor of 979-987 Dean Street; 3) that the rooftop space on 1 070-1 078 Pacific Street, also known as 979B Dean Street, is part of the Lopez Unit and is considered one unit; and 4) Ms. Lopez, Mr. Clark and Mr. Randal-Weeks are the protected occupants of their respective units.

In the Reconsideration , Owner seeks review of the Order pursuant to Title 29 of the Rules of the City of New York ("29 RCNY") § 1-07(a)(2). Owner fails to mention its default in its Reconsideration, even though the Office of Administrative Trials and Hearings ("OATH") declared Owner in default pursuant to a combined notice of conference and default issued and served on February 24,2014.

Owner was given every opportunity to participate in the underlying coverage application. Owner failed to file an answer to Tenants' first coverage application. After OATH served the notice of default on Owner on February 24,2014, Owner failed to file a motion to vacate its default. When Tenants' amended their coverage application, Owner again failed to file an answer. On April 18, 2014, OATH served a notice of trial on Owner, scheduling a trial for July 10, 2014. Prior to the July 10, 2014 trial date, Judge Spooner adjourned the trial date to give Owner an opportunity to vacate its default and discuss the application with Gerard Proefriedt, an attorney who had previously represented Owner in an unrelated matter. See, Notice of Trial at p. 2, Oct. 14,2014. In an email dated August 14, 2014, Judge Spooner stated that Mr. Proefriedt agreed to file a notice of appearance as well as a motion to vacate the default. See, Email from Judge Spooner, Aug . 14,2014. However, Owner never moved to vacate its default. Another conference was scheduled for October 14, 2014. On October 14,2014, Owner failed to appear.

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Therefore, OATH issued a second notice of trial, scheduling a trial for December 15, 2014. On October 14,2014, Mr. Proefriedt informed OATH that he had not been retained as attorney. See, Email from Proefriedt, Oct. 14,2014. On December 15, 2014 a trial was held, in which Tenants' appeared, but Owner did not. The trial went forward as an inquest. On April 30, 2015, Judge Spooner issued his Report and Recommendation. Again, Owner failed to move to vacate its default as allowed by 29 RCNY § 1-06(1)(2).

The Loft Board issued Order No. 4533 based on the Report and Recommendation on June 16, 2016.

ANALYSIS

Pursuant to 29 RCNY § 1-06(i)(3), an application for reconsideration in a case where a respondent has failed to move to vacate a default pursuant to 29 RCNY § 1-06(i)(2), must establish (i) extraordinary circumstances for its failure to timely file an answer and (ii) a substantial likelihood of success on the merits. See a/so, Matter of Formichella, Loft Board Order No. 1940 (Mar. 28, 1996) (,,[W]here the original determination resulted from a default, the application will only be granted if the aggrieved party establishes extraordinary circumstances for its failure to file an answer and a substantial likelihood of success on the merits"). Owner fails to do so here.

In its Reconsideration, Owner fails to mention its default, let alone provide a reason, an explanation or an extraordinary circumstance for its failure to answer the Tenants' underlying coverage application. Specifically, Owner seeks reconsideration pursuant to 29 RCNY § 1-07(a)(2) based on an alleged errors of law.

Owner's assertion that a defaulting party may seek reconsideration of a Loft Board determination upon a showing of one or more of the four circumstances set forth in 29 RCNY § 1-07(a)(2) without moving to vacate its default is contrary to the plain language of the Loft Board's rules. Section 1-06(i)(1), states that "[i]f an affected party fails to file an answer to any application within the applicable time period .. . the party will be in default and will be barred from filing an answer or offering any evidence in its defense. The affected party's defensive case will not be heard as a result of its failure to file an answer." Section 1-06(i)(2) further states "[w]here the affected party fails to file an answer and no timely motion to vacate the default determination has been received ... , the case will proceed and any party in default will not be permitted to file an answer or present its defensive case." Even the notice of default gave Owner notice that the failure to "file a motion for relief from default will preclude that party from filing an answer and from participating in the proceedings on the application." See, Combined Notice, Feb. 24, 2014. Here, Owner's Reconsideration attempts to present its defensive case without first establishing an extraordinary circumstance for its failure to file an answer and a substantial likelihood of success on the merits; a course of action that is contrary to the Loft Board's default provisions contained in 29 RCNY § 1-06(i).

As Owner failed to establish an extraordinary circumstance for its failure to file an answer and a substantial likelihood of success on the merits, Owner remains barred from presenting its defensive case and from seeking reconsideration based on the four circumstances set forth in 29 RCNY § 1-07(a)(2). To allow Owner to seek reconsideration of the Order without first establishing an extraordinary circumstance for its failure to file an answer and a substantial likelihood of success on the merits, even though Owner had every opportunity to be heard in the underlying proceeding, would render the default provisions of 29 RCNY § 1-06 meaningless. It would also prejudice the parties diligently pursuing their rights under the law.

RECOMMENDATION

For the reasons stated above, I recommend that the instant application docketed as R-0350, challenging Loft Board Order No. 4533 (Jun. 16,2016), be denied.

DATED: January 5, 2017

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Michael M. Bobick Assistant General Counsel

NOTICE

A party aggrieved by a determination of the Loft Board may file an application for reconsideration of the determination. Under 29 RCNY § 1-07(b), an aggrieved party must serve the reconsideration application on the affected parties to th e 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 Loft Board 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 (ii i) 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.