Confusion existed in the closely held Limited Liability Corporation. In 2005, two tenants from 13 E. 17th Street filed a complaint with the Loft Board, claiming the building’s owner failed to install sprinklers as required and requesting fines. The tenants named Nathan Silverstein as the owner.

In Silverstein’s first letter to the Loft Board, he listed the correct owner as “13 E. 17 LLC,” but all remaining documents, including his formal response to the tenants’ charges, contained only Silverstein’s name. Silverstein then personally appeared at the OATH hearing.

OATH ALJ John B. Spooner recommended $7,000 in personal penalties against Silverstein, and the Loft Board agreed.

Silverstein applied for reconsideration, arguing that the LLC was the correct building owner and due process required that the penalties be overturned. The Loft Board’s Executive Director Dianne E. Dixon disagreed and recommended denial. Recognizing that Silverstein transferred the property to the LLC in 1999, Dixon claimed that Silverstein personally qualified as an owner under the City’s Multiple Dwelling Law since he was directly or indirectly in control of the dwelling. Dixon’s recommendation pointed to Silverstein’s direct negotiations with the tenants, his name on permit applications, and the fact that he personally appeared at the earlier OATH hearing.

The Loft Board upheld the personal penalties against Silverstein, ruling that allowing him to hide behind the LLC would thwart the Multiple Dwelling Law and the legalization process.

Nathan Silverstein, Loft Bd. Order No. 3100 (Jan. 24, 2007). CITYADMIN