Updated MDL: Should I Stay (longer than 30 days) or Should I Go?

Last year, New York State updated its Multiple Dwelling Law (“MDL”) to address a loophole exposed by Single Room Occupancy operators.  The law originally said that Class A multiple dwellings were “occupied, as a rule, for permanent residence purposes”.  The SRO operators won a legal challenge that hinged on the phrase “as a rule” – whereby they argued, and the court agreed, that the proper interpretation of this phrase meant that up to 49% of a building could be for transient purposes and still meet the intent of the law.

The line between permanent and transient uses is 30 days.  Essentially, if someone rents a room for 30 days or more, it’s a residential use.  If they rent for less than 30 days, it’s a transient (or hotel) use.

The State and the City were very unhappy with the outcome of the lawsuit and saw a need to act to prevent these transient uses from operating in residential zoning districts, where they would otherwise be illegal.  So the updated language has removed the phrase “as a rule”.

But that is not all the update did.  The amendments to the MDL also inserted several new sections that have created an avenue for some transient uses to become legal.  The MDL now allows for hotels that have been in existence since 1961 to continue to exist – in fact, if the building meets all of the law’s (and DOB’s) requirements, the building will be able to update its Certificate of Occupancy to reflect its transient nature and therefore become legal and grandfathered.  To qualify, the hotels must have been erected as hotels, with a continued transient use since their construction.  They must also meet strict building code measures.  They must also NOT have been SRO’s or old law or new law tenements.

After close investigation, it has become clear to us that this path to legalization is very narrow and will only apply to a couple dozen (at most) buildings in the City.

These new updates to the law went into effect last week.  Buildings have 180 days to register with DOB.  The City is now in a position to enforce the law – which means many transient uses in residential districts could be shut down.

We have counseled several clients on the potential impacts of the law and how best to navigate it.  Should you have any questions, we are happy to help.