Building Receiving 421-g Benefits Is Subject to Deregulation

(Decision submitted by Cory L. Weiss, Esq. of the Manhattan law firm of Ingram Yuzek Gainen Carroll & Bertolotti LLP, who represented the landlord.)

Landlord sued to evict tenant after tenant’s lease expired, claiming that tenant was unregulated. Tenant claimed that she was rent stabilized because landlord received a tax abatement for the building under Real Property Tax Law (RPTL) Section 421-g. The building wasn’t a cooperative or condominium. The court ruled for landlord. RPTL 421-g, enacted in 1995, doesn’t bar the deregulation of the apartment for high-rent vacancy deregulation. Rent Stabilization Law Section 26-504.2(a) established a high rent as a basis for vacancy deregulation and specifically exempts housing subject to RPTL Sections 421-a and 489 from vacancy deregulation, but not housing subject to RPTL 421-g.  Also, review of the legislative history of RPTL Section 421-g showed that the law was passed as part of an effort to provide tax incentives for commercial development and energy usage as well as residential development in law Manhattan. This suggested that preservation of rent regulation was not at the forefront of this legislation. Therefore, the court interpreted RPTL 421-g to permit vacancy deregulation. Tenant also argued that landlord hadn’t taken the necessary steps in order to deregulate the apartment. But, to the extent it is required, “subjecting an apartment to rent regulation” means registering the apartment with the DHCR, and landlord registered the apartment as “permanently exempt” in 2006. 

UDR 10 Hanover LLC v. Aaron: Index No. 69437/2015 (Civ. Ct. NY; 2/1/16; Stoller, J) [9-pg. doc.]