Building Subject to J-51 After 421-a Benefits Ended

Landlord applied for high-rent/high-income deregulation of tenant's apartment in 2005 since tenant's rent was $2,000 per month or more. The DRA ruled for landlord when DTF records confirmed that tenant's total annual household income was more than $175,000 in 2003 and 2004. Tenant appealed, claiming that he wasn't subject to luxury deregulation because landlord had received tax benefits under Real Property Tax Law Section 421-a. Landlord also now received J-51 tax benefits. The DHCR initially denied tenant's PAR, but later reconsidered and ruled for tenant. The newly constructed building became rent stabilized upon receipt of 421-a benefits. The 421-a benefits had expired, but tenant remained subject to stabilization because a rider notifying him of deregulation wasn't contained in all renewal leases. Otherwise, by law, tenants become eligible for deregulation once 421-a tax benefits expire. But landlord obtained J-51 tax benefits for the building after the 421-a benefits expired, and these benefits were still in effect. So tenant's apartment remained ineligible for high-rent/high-income deregulation.

Zucker: DHCR Adm. Rev. Docket No. XC410013RK (7/19/11) [5-pg. doc.]