Apartment Was Subject to Deregulation When J-51 Benefits Ended

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2015, when tenant's monthly rent was $2,500 or more and sought verification of whether tenant's annual household income was more than $200,000 in 2013 and 2014. The DRA ruled against landlord because the tenant's 2011 vacancy lease didn't contain a notification rider even though the building was subject to rent stabilization due to receipt of J-51 tax benefits. Landlord appealed and won. Landlord pointed out that the apartment had been rent stabilized since 1969, prior to the building's receipt of J-51 tax benefits between 1992 and 2012. Therefore, the apartment was eligible for high-rent/high-income deregulation. It didn't matter whether tenant's leases contained J-51 riders. J-51 lease riders notify tenants if their apartments are subject to automatic deregulation when the tax benefits expire. Tenant's apartment was otherwise rent stabilized so there was no automatic deregulation when the building's J-51 benefits ended. The case was sent back to the DRA for income verification.

400 E58 Owner LLC: DHCR Adm. Rev. Docket No. DR410048RO (1/8/19) [6-pg. doc.]