Apartment Deregulated Under High-Rent/High-Income Provisions

Landlord applied for high-rent/high-income deregulation of tenants' rent-stabilized apartment in 2016. The DRA ruled for landlord after the Department of Taxation and Finance (DTF) verified that the household income for the apartment was $200,000 or more in both 2014 and 2015. The rent was $2,700 or more.

Tenants appealed and lost. The apartment was subject to rent stabilization before 2003 when the building began receiving J-51 tax benefits that ran until 2014. So the unit was eligible for luxury deregulation. Based on the Court of Appeals decision in Roberts v. Tishman Speyer Properties (2010), the apartment wasn't eligible for high-rent/high-income deregulation while the building received J-51 benefits. But the apartment became eligible when the benefits expired in 2014.

Tenants claimed that landlord's improper annual rent registrations listing the apartment as exempt from rent stabilization barred high-rent/high-income deregulation. But landlord's exempt registrations occurred before the Roberts decision when it was the DHCR's prior interpretation of the law that landlord could deregulate while receiving J-51 benefits. Landlord re-registered the apartment as rent stabilized starting in 2016. Landlord also offered tenants a rent-stabilized renewal lease on June 1, 2015. High-income deregulation also didn't depend on whether landlord included a J-51 lease rider notice in tenant's leases. This building wasn't rent stabilized solely due to J-51. Finally, tenants' lease in effect on the day the DRO issued the deregulation order expired before June 14, 2019. So HSTPA amendments to the Rent Stabilization law didn't affect the deregulation order. 

Apple/Brogan: DHCR Adm. Rev. Docket No. GV210001RT (9/25/20) [8-pg. doc.]