Apartment Became Subject to Deregulation After J-51 Tax Benefits Ended

Landlord applied to the DHCR for high-rent/high-income deregulation of tenant’s rent-stabilized apartment. Tenant claimed that he wasn’t subject to high-rent/high-income deregulation because the building previously received J-51 tax benefits. The DHCR ruled for landlord and deregulated the apartment. Tenant appealed and lost. The court and appeals court found that the DHCR correctly determined that the apartment continued to be subject to high-rent/high-income deregulation after the expiration of J-51 tax benefits because the building was already rent stabilized before receipt of the J-51 benefits. Landlord wasn’t required to serve a J-51 rider on tenant with leases to trigger reversion of his rent-stabilized apartment to the original rent-regulation scheme that it was governed by. When J-51 expires, applicable statutes expressly provide for different treatment of apartments that were regulated before the receipt of J-51 tax benefits and those that became rent stabilized solely because of the J-51 benefits.

Bramwell v. DHCR: 2017 NY Slip Op 01276, 2017 WL 628284 (App. Div. 1 Dept.; 2/16/17; Friedman, JP, Mazzarelli, Andrias, Feinman, Gesmer, JJ)