Apartment Was Reregulated Due to J-51 Benefits

Tenant sued landlord, claiming rent overcharge and that his apartment was improperly deregulated. Landlord claimed that tenant was barred by the doctrine of collateral estoppel because he didn't participate in DHCR proceedings held 13 years earlier that resulted in deregulation of the apartment based on high-income deregulation. The court denied landlord's request to dismiss the case but also denied tenant's request for a declaration that the apartment was rent stabilized. Tenant and landlord both appealed.

The appeals court ruled for tenant. Tenant had presented claims in this new case not at issue in the prior DHCR proceeding. Tenant claimed that his apartment was subject to re-regulation when he signed a new market-rate lease at a time when the building was still receiving J-51 tax benefits. The court agreed and ruled that the apartment was rent stabilized and tenant was entitled to a rent-stabilized lease.

Suarez v. Four Thirty Realty LLC: 92 N.Y.S.3d 649, 2019 NY Slip Op 01307 (App. Div. 1 Dept.; 2/21/19; Renwick, JP, Tom, Singh, Moulton, JJ)