Apartment Remains Covered After Tenant's J-51 Coverage Ends

Landlord asked the DHCR for deregulation or for a rent increase for a rent-controlled apartment based on unique and peculiar circumstances. The building's J-51 benefits expired in 1992. Landlord claimed that the rent-controlled apartment should be deregulated at that point. The DHCR ruled against landlord, and landlord appealed. The court and appeals court ruled against landlord. The J-51 law was amended in 1985 to say that apartments under J-51 remained rent regulated after the tax benefits expired until there was a vacancy. Landlord had claimed that this applied only to rent-stabilized apartments. The law stated that rent-stabilized apartments remained subject to J-51 until vacancy unless there was a lease clause in each renewal telling tenants that rent stabilization coverage would end when the J-51 benefits expired. But the law also applied separately to rent-controlled apartments, and no renewal lease exception applied.

Bleecker St. Mgmt. Co. v. DHCR: NYLJ, 6/14/01, p. 20, col. 1 (App. Div.1 Dept.; Rosenberger, JP, Williams, Wallach, Lerner, Friedman, JJ)