Apartment in J-51 Building Not Subject to Deregulation

Tenant complained of a rent overcharge. The DRA ruled against tenant, finding that prior tenant’s rent was legally increased to $2,054 in 2004, so the apartment was exempt from rent stabilization. Tenant appealed, claiming that landlord didn’t prove that individual apartment improvements were made to warrant the 2004 rent increase. Tenant also argued that the building was receiving J-51 tax benefits and therefore wasn’t subject to high-rent deregulation. The DHCR ruled against tenant in February 2009. But the DHCR reopened the case in March 2009 to consider the possible impact of the court case of Roberts v. Tishman Speyers LP. In October 2009, New York’s highest court ruled in Roberts that luxury deregulation didn’t apply in J-51 buildings. The DHCR then ruled that tenant’s apartment remained subject to rent stabilization in 2004 because the building received, and continued to receive, J-51 benefits. But landlord did sufficiently prove the individual apartment improvements contested by tenant, and there was no overcharge. Landlord must offer tenant a rent-stabilized renewal lease.

Clark: DHCR Adm. Rev. Docket No. XC410008RK (8/1/12) [8-pg. doc.]