Building Remained Rent-Stabilized Even After J-51 Benefits Expired

In 2016, landlord asked the DHCR for a ruling on whether tenant's apartment was rent stabilized. Landlord claimed that, after April 1993, prior landlord increased the dimensions of the apartment by adding square footage from an adjoining unit and then renting the newly created apartment for $2,500 per month. The apartment therefore was deregulated now that J-51 tax benefits the building had received were expired. Tenant claimed that he moved into the apartment in 1998 and was rent stabilized. While the case was pending, landlord acknowledged that tenant was rent stabilized and registered the apartment as such. Landlord also advised the DRA that it had filed a pending demolition application with the DHCR. The DRA ruled against landlord, finding that the apartment was rent stabilized and directing landlord to withdraw its demolition application.

Landlord appealed and lost. While the building received J-51 tax benefits, tenant didn't receive lease riders advising him that the building would become exempt when J-51 expired. So landlord admitted that tenant remained rent stabilized but argued that the DHCR's order should state that the apartment would be deregulated after tenant moved out. But the DHCR noted that the building was built before Jan. 1, 1974, and had at least six units. So, because the building was previously rent stabilized, it would remain so even after J-51 tax benefits expired. 

St. Johns Associates, LLC: DHCR Adm. Rev. Docket No. KS210007RO (4/21/23)[3-pg. document]