A Chelsea landlord is suing tenants of a loft apartment in his building because, their lawyer says, they have been withholding rent on their High Line-adjacent apartment since 2012.
The owner of a West 26th Street building that butts up against the elevated park alleges in a lawsuit that Karen Nourse and Zachary Bennett actually stopped paying rent on their $4,754-a month pad in 2010, the New York Post reports. The couple, independent filmmakers with two children, have lived in the building between 10th and 11th avenues since 1998, according to their lawyer, Margaret Sandercock. They stopped paying rent not because they are entitled opportunists, but because the landlord has failed to complete a city-approved loft conversion process, Sandercock said.
Regarding the Post's story, Sandercock said the paper's editors "are trying to make my clients look like really privileged affluent people, which they really aren't."
She explained, "Before that building could be protected as residential housing, they lived there. They are filmmakers and they wanted space that they could live and sometimes shoot in, or at least have a base of operations for their filmmaking activities." She added that, to whatever extent the apartment is nice, it's no thanks to the landlord, tie-maker and real estate investor Walter Schik.
"This is by no means luxury New York City housing. It's raw space. Whatever amenities are in their loft Zachary and Karen provided them themselves. It was really quite a leap of faith when they started to live there, because their tenancy was not protected."
Sandercock specializes in steering apartments in formerly industrial buildings through the loft law legalization process—in 2012, a high court ruled that her client in a similar case was in the right to withhold rent for six years. Nourse and Bennett are family friends of Sandercock's, so when city legislators passed a new loft law in 2010, making a new batch of illicit apartments eligible to be formally recognized, she reached out to the couple.
"They had been talking about how scary it was to be parents and have housing that you weren't necessarily supposed to be living in," she said. "They were excited, because this meant that their housing could be legalized, and they couldn’t be thrown out."
The couple and residents of two other apartments in the building applied for loft status in late 2010, Sandercock said. Schik registered the building with the Loft Board in 2012, and after a contentious legal back-and-forth, the Loft Board affirmed Nourse and Bennett's right to be in the apartment in 2014, city records show. In the meantime, Nourse and Bennett began withholding rent and the neighbors moved out, Sandercock said, one having been denied loft status.
Sandercock alleges that Schik has made no moves to do the fire- and safety-related construction required to obtain a certificate of occupancy and complete the loft legalization process. Under New York law, tenants can withhold rent when their buildings lack a certificate of occupancy, and when loft landlords are going through the conversion process, the city will typically only vacate the premises if there is some imminent danger, like the risk of a building collapsing. Once the conversion process is complete, tenants like Nourse and Bennett are entitled to rent-stabilized leases.
The beginning of the family's battle to lock in their tenancy coincided with the 2009 completion of the High Line, which has made formerly industrial Chelsea an international destination, and contributed to a massive surge in rents, 10 times the average increase for Manhattan as a whole. The average rent for a non-doorman two-bedroom in the neighborhood in November was $4,950, according to MNS.
Sandercock said her clients haven't been served with the lawsuit, but that Schik's lawyer has been threatening to sue them for years. Based on the Post's reporting, it seems that the landlord's legal argument hinges on the part of the loft law that defines eligible buildings as having three or more residential units. Sandercock counters that a chunk of northwest Chelsea that includes the building has a different definition—two or more residential units. The law also specifically states that "A reduction in the number of occupied residential units in a building after [the loft qualification period] shall not eliminate the protections...for any remaining residential occupants."
Bennett and Nourse aren't putting rent into an escrow account that Sandercock is managing, but they're aware that if the legal fight doesn't go their way they could be on the hook for hundreds of thousands of dollars, she said. At the end of the day, she said, they don't want to leave, and they would be happy to pay rent again once the required work is done.
"They’ve been there almost 20 years. It’s the only home they’ve ever known," she said. "If the owner was to get the certificate of occupancy there would be no problem with the rent being paid."
Schik and his lawyer did not respond to comment requests.