Apartment Subject to Deregulation After J-51 Expired

Landlord applied for high-rent/high-income deregulation of rent-stabilized tenant's apartment in 2009. The DRA ruled for landlord after finding that tenant's income was more than $175,000 in 2007 and 2008. Tenant appealed and lost. Tenant argued that landlord had received J-51 tax benefits, so luxury deregulation was inapplicable to his apartment. But tenant misunderstood the law. Under Rent Stabilization Law Section 26-504(c), if an apartment was subject to rent regulation solely as a result of the receipt of tax benefits, then when the benefits expired, the apartment remained rent stabilized until either the tenant vacated or tenant's current lease expired, and tenant had received notice of the projected tax benefit expiration date in all of his leases and renewal leases. But since tenant's apartment was also otherwise subject to rent stabilization before landlord received J-51 tax benefits, the apartment continues to be subject to rent stabilization as if the tax benefits had never been granted. So it didn't matter whether tenant had received J-51 expiration notices in all his leases.

Keller: DHCR Adm. Rev. Docket No. YJ410018RT (12/8/11) [5-pg. doc.]