Apartment Subject to Luxury Deregulation After J-51 Tax Benefits Expired

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2016. Tenant's monthly rent was $2,500 or more, and landlord sought verification of whether tenant's annual household income was more than $200,000 in 2014 and 2015. The DRA ruled against landlord. The building had received J-51 tax benefits between 1999 and 2010. None of tenant's leases issued during that period included a rider stating that the apartment would be automatically deregulated when the J-51 benefits expired. The DRA ruled that, therefore, the apartment would remain rent stabilized until tenant moved out and wasn't subject to high-rent/high-income deregulation. Landlord appealed, and the case was reopened. Landlord showed that the apartment had been rent stabilized since 1974, prior to landlord's receipt of J-51 benefits. So, since the apartment wasn't solely rent stabilized as a result of the J-51 benefits, landlord wasn't required to provide the J-51 lease riders and the apartment was subject to luxury deregulation after the J-51 benefits expired. The DRA must process landlord's application and seek income verification.

Cenpark Realty LLC: DHCR Adm. Rev. Docket No. ER410042RO (1/18/19) [6-pg. doc.]