Apartment Subject to Deregulation After J-51 Tax Benefits Expired

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2012, claiming that tenant's legal rent was $2,500 per month or more, and seeking verification of tenant's household income for 2010 and 2011 to determine if the income was more than $200,000 for each of those years. The DRA ruled against landlord and dismissed the application, finding that the building had received J-51 benefits, now expired, and that tenant's leases didn't contain the J-51 rider required for automatic deregulation when the J-51 benefits expired.

Landlord appealed, and the case was reopened. Landlord showed that the building had been rent stabilized before landlord obtained J-51 tax benefits. So, it didn't matter whether tenant received J-51 lease riders because the building reverted to rent-stabilized status after J-51 benefits expired in June 2007, and was again subject to high-rent/high-income deregulation. The case was sent back to the DRA for verification by the Department of Taxation and Finance (DTF) of tenant's household income.

56 7th Avenue, LLC: DHCR Adm. Rev. Docket No. DS410038RO (8/2/18) [7-pg. doc.]