Deregulation Available After J-51 Benefits Expired

Landlord applied for high-rent/high-income deregulation of tenant’s rent-stabilized apartment in 2008. Tenant admitted that his annual household income was more than $175,000 during 2006 and 2007. The DRA ruled for landlord. Tenant appealed and lost. Tenant claimed that his apartment wasn’t subject to luxury deregulation because landlord received J-51 tax benefits for the building. High-income rent deregulation doesn’t apply to buildings that became or become rent stabilized solely by virtue of the receipt of J-51 benefits. New York’s highest court has ruled that high-income rent deregulation wasn’t available for apartments receiving J-51 tax benefits while the benefits remain in effect. But after the J-51 benefits expired, tenant’s building remained subject to rent stabilization because it was also otherwise rent stabilized. So high-rent deregulation rules applied to tenant’s apartment, and tenant was properly deregulated.

Schiffren: DHCR Adm. Rev. Docket No. XE410041RT (1/5/10) [5-pg. doc.]