Building Received J-51 Benefits After Co-op Conversion

Landlord applied for high-rent/high-income deregulation of tenant’s rent-stabilized apartment in 2009. The DRA ruled against landlord because the building was receiving J-51 tax benefits. The DRA therefore found that tenant wasn’t subject to high-rent deregulation. Landlord appealed and pointed out that the building was converted to cooperative ownership in 1984, before receiving J-51 benefits. Therefore, landlord argued, the J-51 exemption from high-rent deregulation didn’t apply because the building was a co-op. The DHCR reopened the case. The building didn't become subject to rent stabilization again upon receipt of J-51 benefits because it was already owned and operated as a co-op. Tenant’s apartment was rent stabilized only due to its prior status as a rent-stabilized apartment before the co-op conversion. So the DRA must determine whether the apartment qualified for high-rent deregulation based on tenant’s household income.

ROC-Century Associates LLC: DHCR Adm. Rev. Docket No. BR410040RO (9/17/15) [8-pg. doc.]