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DOWDALL LAW OFFICES A PROFESSIONAL CORPORATION ATTO R N EYS AT LAW City Council of the City of Santa Ana City of Santa Ana September 16, 2021 Page 43 dysfunctional, upon the shoulders of the victim seeking housing. And the amount of the transfer of value is significant.22 No one calls "key money" an "equity" interest of a residential tenant. The New York "Loft Law" ("Loft Law") prohibits the sale of the leasehold above market value of the tenant improvements. Local governments claim that mobilehome housing is unique, due to the tie-in between trailer and space. Trailers are allegedly trouble to move; site improvements have been made; relocation is difficult. What of a residential tenant's substantial improvements? The Loft Law is 23 a directly apposite situation. The loft tenant spends tens of thousands of dollars adding improvements to a mere leasehold. Then, the tenant may seek to assign the tenancy. The Loft Law allows for the recovery of the improvements, but not the value of the leasehold - that would be illegal. A `mobilehome' is no different from the `loft,' except that the loft improvements may never be removed (trailer tenants can move away with their investment). The purpose of the Loft Law is, inter alia, to protect against profiteering on under -market leaseholds. 24 Note that the only difference between "loft improvements" and "a mobilehome" is that the latter can be removed intacttheinvestment is preserved; the loft tenant has no choice. In Gavish v. Rapp, 127 Misc.2d 255, 259, 485 N.Y.S.2d 407,411 (N.Y.Sup.Ct.1984) ("Gavish"), the incumbent sought to assign her loft for $64,000.00 and procured a willing assignee. Gavish, 127 Misc.2d at 259, 485 N.Y.S.2d at 411. Landlord disputed the value, contending that it constituted "key money." 25 The court noted that the purpose of the law is defeated by providing the departing tenant with a profit, which is the property of the landlord. To say that an incoming tenant is prepared to pay the price does not establish the fair market value -there are tenants desperate for accommodation in a particular location who would pay virtually any demanded price regardless of value. 22 "The markups over the appraisal guide values of the coaches in these transactions average between 250% and 900%." Mason, Carl, & Quigley, John M. 23 Multiple Dwelling Law, article 7-C, §§ 280-287 (L 1982, ch 349, § 1, entitled "Legalization or Interim Multiple Dwellings." 24 Gavish v. Rapp 127 Mise.2d 255, 259, 485 N.Y.S.2d 407, 411 (N.Y.Sup.Ct.1984) ("The law, however, was not designed to permit an outdoing tenant to make a killing by demanding whatever the traffic would bear for "improvements' when what is really being sold is the key... "). 25 Id. ("that sum includes not only such items as may properly be categorized as `improvements, but the assignment of the leasehold as well (the equivalent of `key money') and the sale of movable personalty. The law permits the outgoing tenant to sell only the `improvements' for an amount equal to their fair market value"). -43-