It’s no secret that the Incompatible Use provisions of the 2010 Loft Law, originally intended to protect manufacturing, are sometimes used by building owners who want to keep their buildings residential but don’t want to grant their tenants Loft Law protections. Just contesting an application on the basis of Incompatible Use puts up a huge roadblock, and sometimes drives tenants out even though there is no actual danger.
One unfair and strange consequence of the way the rule was implemented in 2011 is that the burden of proof is put on tenants to prove that there is not a dangerous condition. Aside from the difficulty of proving a negative, this also puts a tremendous expense on the tenant – often reaching into tens of thousands of dollars in legal and engineering costs – just to counter a problem the owner claims but hasn’t proved.
We know of a number of buildings where tenants are unsure about applying because they suspect the cost of fighting an Incompatible Use claim may be too much for them. If an owner wants to disqualify a building, they should be compelled to show that there is an Incompatible Use, not the other way around.
Another way we have found the implementation of this law has unduly burdened tenants is in two phrases of 2-08(k): “has or should have … an environmental rating of ‘A’ or ‘B'”, and, “is or should be classified as a High-Hazard Group H occupancy” [emphasis added]. What should matter is if the actual activities and substances in the building are dangerous, not whether the business or building owner acquired permits for something they are not actually doing.
To take some examples we have seen: a factory has a Certificate of Occupancy for box manufacture, which could be incompatible, but now only assembles them: compatible. A garage has FDNY permits to keep large oil drums on the premises but actually stores them across the street. It is not what the business filed for permission to do, either in the past or in planning for the future, but what it is doing, that endangers residential tenants.
Or in other words, what matters is not if a certificate for process equipment “has” an environmental rating of “A” or “B”, but whether it “should have” that rating. It is not whether an occupancy “is” classified as High-Hazard Group H, it is whether it “should be”.
A building should not be deemed incompatible just because the Certificate of Occupancy or permits were over-filed or misfiled.