Q The building where I live, a former hotel, was converted to a condo about four years ago. There are nine hotel-stabilized tenants remaining as renters within the condo. Management says that our hotel-stabilized units have been “condominiumized” but we pay our rent to __X__ hotel association (the sponsor) and three staff members, who provide some of our services, belong to the hotel workers union. Our rents are set each year by a hotel order issued by the Rent Guidelines Board.

In 1985, the Tenants Association, which I head, executed an agreement with a former hotel owner, which listed all the services to which, in Rider A, we were and would continue to be entitled. The attorney for the hotel asked me to draw up the list, “so that every future owner,” he said, “will know what services he has to provide you.” In other words, according to management's attorney, our agreement would be in full force and effect forever. Six of the remaining hotel-stabilized tenants are covered by this agreement. The condo's sponsor incorporated our agreement into the next to last version of their offering plan.

Two important services, which are at issue, are listed in Rider A:

Laundry room (with two washing machines and two dryers) available to tenants from 8:00 a.m. to closing hour of the Tenant Lounge.

5. Terrace for exclusive use of tenants and their guests...the entire fourth floor terrace (was) set aside for the use of the tenants...

In the final version of the Offering Plan, which was approved by the Attorney General, the Sponsor omitted the Tenants Association Agreement, so that the AG could not tell that the washers and dryers as well as the fourth floor terrace are exclusively for the tenants' use. Nevertheless, the Sponsor was obviously aware of those provisions and we expected them to honor our contract.

Some months after the AG approved the Plan, I saw a real estate broker showing our terrace to a client through a corridor window. When I wrote to the management, I asked them to tell their real estate brokers that the terrace and the washer-dryers are not (it appears “not” in this sentence is a typo) for the exclusive use of the tenants and therefore could not be available to condo owners.

The Sponsor's VP replied saying:

“...we outlined in the offering the fact that such unit occupied by a resident (was) condominiumized. Each 4th floor unit was allocated a portion of the terrace and other common elements unique to that floor, such that when these units are eventually sold, the new owners would benefit from access to the terrace and washer/dryers. The tenant lounge was not included in any allocation and is for the exclusive use of the residents [as also provided in Rider A].”

He went on to say that any objections should have been sent to the AG during the filing period, and since that didn't happen during the period, the AG “approved our plan as submitted.” They would continue, he added, to have their real estate brokers promise the use of the tenants' terrace and laundry room to prospective condo buyers. That, of course, is a breach of our agreement.

Suffice it to say, it never occurred to us that management would try to abrogate any of the provisions of Rider A, which a succession of owners had adhered to for more than 20 years, and which management had acknowledged by incorporating our agreement into their offering plan only a few months prior to preparing the final version of the Offering Plan.

What we need to know is whether the Tenants Association agreement, giving us exclusive use to the two washers/dryers and terrace (in perpetuity) prevails, as a legally binding agreement, or whether the (almost 700-page) Offering Plan nullifies and supersedes those provisions of Rider A?

—Legally Binding

A “It appears from the writer’s question that the building was initially a rent-stabilized building that had a non-eviction plan to convert it to a hotel with the rent-stabilized tenants remaining in the building and most recently the building was converted again through a non-eviction plan to a condominium building. The agreement that is described between the sponsor and Tenant’s Association provides the stabilized tenants with sole access to the 4th floor terrace and laundry room,” says attorney Pierre Debbas of the Manhattan law firm of Romer Debbas LLP.

“However, the sponsor currently interprets the agreement to say “we outlined in the offering (plan) the fact that such unit occupied by a resident (was) condominiumized. Each 4th floor unit was allocated a portion of the terrace and other common elements unique to that floor, such that when these units are eventually sold, the new owners would benefit from access to the terrace and washer/dryers.” It is difficult to assess the situation without reviewing the agreement, but it appears that the agreement may entitle the sponsor to provide access to the 4th floor terrace and laundry room to unit owners (and not only to stabilized tenants) if the units on the 4th floor have been converted to condominiums and are not occupied by stabilized tenants or in the event of a conversion of the building from a hotel to a condominium. It would be helpful to know where the six remaining stabilized tenants covered by this agreement are located in the building. “In the event that the agreement does not provide for the sponsor’s rights outlined above, then the sponsor is in violation of its duties under the agreement. The sponsor acknowledges the validity of the agreement and a duty to abide by the agreement through including the agreement in the next to last version of the Offering Plan. More likely than not, the condominium unit owners will reference the Offering Plan in any disputes over access to the 4th floor terrace and laundry room and will have precedent. The rent stabilized tenants should file a complaint with the Attorney General outlining the sponsor’s failure to include the agreement in the Offering Plan and force the sponsor to amend the Offering Plan to include this agreement. The fact that the Offering Plan has already been filed does not preclude the stabilized tenants from filing a complaint with the Attorney General and requesting that an amendment to the Offering Plan be required.”