DHCR Must Reconsider Whether Apartment Qualifies for Deregulation

Landlord applied in 2013 for high-rent/high-income deregulation of tenant's rent-stabilized apartment. Tenant claimed that he moved into the apartment while it received J-51 tax benefits and that the apartment was rent stabilized solely due to the J-51 benefits. The DRA ruled against landlord, finding that the apartment didn't qualify for automatic deregulation when the J-51 benefits ended because tenant's leases didn't contain the required J-51 notice provisions for deregulation. Landlord appealed, and the case was reopened. The building's J-51 tax benefits began on July 1, 1992, and expired on June 30, 2011. As landlord pointed out, the building was subject to rent stabilization prior to the receipt of the J-51 tax benefits and was otherwise subject to rent stabilization. So the apartment wasn't rent stabilized solely due to receipt of the J-51 tax benefits. And high-rent/high-income deregulation isn't dependent on or contingent upon a J-51 lease notice rider being provided in tenant's leases. The case was sent back to the DRA for determination on the merits concerning whether the apartment qualified for high-rent/high-income deregulation.

Embassy House EAT LLC: DHCR Adm. Rev. Docket No. DR410054RO (7/17/18) [7-pg. doc.]