Apartment Was Subject to Rent Stabilization Before J-51 Benefits Period

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2016. The DRA ruled against landlord, finding that the building received J-51 tax benefits and that tenant's leases during the J-51 period didn't contain a lease rider stating that the apartment would be deregulated automatically when the J-51 benefits expired. Landlord appealed and pointed out that the apartment was rent stabilized before the building received J-51 benefits, that the benefits ended in 2010, and that landlord wasn't required to give tenant J-51 lease riders in order to seek high-rent/high-income deregulation.

The DHCR agreed, ruled for landlord, and sent the case back to the DRA for a ruling on the merits of whether tenant's income exceeded the deregulation threshold for 2014 and 2015. It didn't matter that landlord registered the apartment as exempt in 1998 and didn't register the apartment from 1999 - 2007. The "PE" registration filed in 1998 was filed before New York's highest court issued the Roberts decision. Landlord had followed DHCR policy in effect at the time. Landlord also had registered the apartment as rent stabilized from 2008 to 2018 after Roberts. Landlord also offered tenant rent-stabilized renewal leases after giving her an initial unregulated lease. 

230 East 48th Street LLC: DHCR Adm. Rev. Docket No. FV410014RO (2/11/19) [6-pg. doc.]