Deregulation Denied for Tenant in Former 421-a Building

Landlord applied in 2011 for high-rent/high-income of tenant's rent-stabilized apartment. The DRA ruled for landlord based on tenant's income level and the fact that the legal rent was over $2,000 per month. Tenant appealed, claiming that he wasn't subject to high-rent deregulation. The DHCR ruled for tenant and revoked the deregulation order. The building was constructed in 1994 and became subject to rent stabilization because landlord obtained 421-a tax benefits. After those benefits expired, tenant claimed in a prior proceeding that he remained subject to rent stabilization because landlord didn't include a rider in each of his leases and renewal leases advising him that he would be subject to deregulation when the 421-a benefits expired. The DRA ruled for tenant in that proceeding, so tenant remained subject to rent stabilization. Landlord argued that, because the 421-a benefits had expired before 2011, tenant was subject to luxury deregulation just like any other rent-stabilized tenant. But the DHCR found that Real Property Tax Law Section 421-1(2)(f)(ii) does not provide for high-rent/high-income deregulation for apartments that became subject to the 421-a program after July 3, 1984. The DHCR said that those apartments can be deregulated only upon proper lease notice and expiration of the 421-a benefits or upon a vacancy.

Anglin: DHCR Adm. Rev. Docket No. CM410031RT (12/8/14) [6-pg. doc.]