The above two summary proceedings were tried together. The proof showed the following: petitioners acquired the building (146 Chambers Street) in 1977 and leased the entire second floor to respondents E. Jan Kounitz and Deborah Klein for a four-year period commencing May 1, 1977 at a base rental of $350 per month, and the entire fourth floor to Dean Aronson for a four-year term beginning June 1,1977 at a base rental of $315 per month; *744each lease provided (i) that the premises would be used for an “artist’s studio or any legal usage”, (ii) that the tenant would “make all repairs and maintain” the premises and was taking the unit “as is”, (iii) any fixtures and partitions, etc., installed by the tenant would become the landlord’s property upon installation, and (iv) that the tenant would pay (as additional rent) a portion of increases in the real estate tax and a “fair share” of the gas bill; the parties understood that the tenants would reside in the premises and make alterations within the unit to make the premises suitable for habitation; at the time of the execution of the lease each of the floors was merely open space without fixtures or partitions; the tenants installed kitchen and bathroom facilities, erected partitions, did plumbing and electrical work, replaced windows, painted and plastered, and in general made such improvements as they desired in their respective lofts; the building is an interim multiple dwelling (IMD) and respondents are covered under article 7-C of the Multiple Dwelling Law (the Loft Law); respondents are now the only occupants of the building other than a store on the ground floor; and petitioner, prior to commencement of the lease term, constructed an enclosed stairwell and public halls from space that had been part of the large open space and replaced missing floorboards and glass in the windows.