Landlord Can Seek Luxury Deregulation After J-51 Benefits Expire

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment. Tenant claimed that he wasn't subject to high-rent deregulation because the building received J-51 tax benefits. But landlord pointed out that the building was subject to rent stabilization both before and after the J-51 benefits expired. The DHCR ruled against tenant, who appealed and lost. In a case of first impression, the court ruled that it was the intent of the legislature that a building that was already regulated when it received J-51 benefits continue to be regulated under the original rent-regulation scheme when the tax benefits expired. The reversion to pre-J-51 benefit rent-stabilization status includes the right of landlord to seek luxury deregulation.

Schiffren v. Lawlor: 955 NYS2d 44, 2012 NY Slip Op 08445 (App. Div. 1 Dept.; 12/11/12; Gonzalez, PJ, Saxe, Catterson, Acosta, Gische, JJ)