Apartment in Co-op Building Not Rent Stabilized

Landlord applied in 2012 for high-rent/high-income deregulation of tenant’s rent-stabilized apartment. The DRA ruled against landlord because the building was receiving J-51 tax benefits at the relevant time and therefore wasn’t eligible for high-rent deregulation. Landlord appealed and pointed out that, at the time the building received J-51 benefits, it was owned and operated as a cooperative. So the building was exempt from rent stabilization coverage that otherwise would result from receipt of J-51 benefits. The DHCR agreed and reopened the case for processing of landlord’s application. The building first became rent stabilized under the 421-a tax benefit program in the mid-1970s. The 421-a benefits expired in the mid-1980s. High-rent/high-income deregulation was then available to the building under Real Property Tax Law Section 421-a(2)(f)(i). The building also converted to cooperative ownership in 1982. By the time landlord obtained J-51 tax benefits in 2005, the building was already a co-op and therefore exempt from rent stabilization requirements resulting from J-51.

Ogden Cap Properties LLC: DHCR Adm. Rev. Docket No. CS410047RO (6/22/15) [9-pg. doc.]