Apartment Is Subject to Luxury Deregulation

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2011 when the monthly rent was $2,000 or more. Landlord sought verification of whether tenant's annual household income was more than $175,000 in 2009 and 2010. The building received J-51 tax benefits between 1998 and 2010. The DRA ruled against landlord, finding that the apartment was rent stabilized solely as a result of the J-51 benefits, and tenant received no J-51 lease riders during that time advising him that the apartment would be automatically deregulated when the benefits ended. Landlord appealed, and the case was reopened. Landlord argued that the apartment was rent controlled until 1998. The rent-stabilized tenant moved in in 1999 at a monthly rent of $2,600, and the apartment was then subject to rent stabilization regardless of the rent level. Therefore, it didn't matter if tenant received J-51 lease riders. The DHCR agreed. Since the apartment would have been rent stabilized in any event in 1999, the apartment was subject to high-rent/high-income deregulation. The case was reopened to perform income verification.

Mayflower Development Corp.: DHCR Adm. Rev. Docket No. DO410006RO (1/15/19) [5-pg. doc.]