Apartment Remains Rent-Controlled After J-51 Benefits Expire

Landlord, who owned a cooperative apartment occupied by rent-controlled tenant, applied for high-rent/high-income deregulation of tenant’s apartment in 2008. The DHCR ruled against landlord. Landlord had obtained J-51 benefits in 1994. Even though the tax benefits expired in 2004/2005, the DHCR found that the apartment remained subject to rent control. Landlord filed an Article 78 court appeal against the DHCR. The court ruled for landlord, but the appeals court reversed. Tenant’s rent-controlled apartment remained exempt from luxury deregulation after the J-51 benefits expired because of how the rent control law was written. Under the statute, the apartment became subject to rent control for a second time when landlord obtained the J-51 benefits, and nothing in the law restored the availability of high-rent/high-income deregulation after the J-51 benefits expired. Landlord appealed the Appellate Division’s decision further, but New York’s highest court dismissed the appeal as moot because tenant had moved out of the apartment.

RAM I LLC V. DHCR: 2015 NY Slip Op 09189, 2015 WL 8676638 (Ct. App.; 12/15/15; Lippman, PJ, Pigott, Rivera, Abdus-Salaam, Stein, Fahey, JJ)