Minor Errors in J-51 Riders Didn't Invalidate Deregulation

(Decision submitted by John M. Churneftsky of the Manhattan law firm of Kucker & Bruh, LLP, attorneys for the landlord.)

Facts: Landlord substantially rehabilitated a rent-stabilized building in 1987 and obtained J-51 tax benefits for the work. Tenant moved into the building in December 1995. His initial lease and some renewal leases each contained J-51 riders stating that the rent-stabilized status resulting from the building's J-51 benefits would end as early as July 15, 2002. Later, a J-51 rider attached to tenant's 2003 renewal lease stated that J-51 status would end as early as June 30, 2007. The J-51 rider attached to tenant's 2005 renewal lease stated that the J-51 status would end as early as June 30, 2006. Tenant remained rent-stabilized until Nov. 30, 2007, then signed a one-year unregulated lease. When that lease expired, landlord sued to evict tenant. Tenant asked the court to dismiss the case without a trial. He claimed that he remained rent stabilized because landlord hadn't properly notified him in the lease riders of the J-51 expiration date.

Court: Tenant loses. Landlord committed no fraud and advised tenant from the outset that his rent-stabilization status would end at some point. While some of the J-51 riders mistakenly stated that benefits would expire in 2002, this minor error didn’t harm tenant, who received the benefits of rent stabilization through Nov. 30, 2007. This was the maximum period that he was entitled to rent-stabilized status. Tenant also was notified of landlord’s 2008 application to the DHCR for a ruling on the building’s status and didn’t answer or appeal the DHCR’s ruling that the J-51 benefits ended on June 30, 2007, and that the building was otherwise exempt due to the substantial rehabilitation.

Andy Roo Corp. v. Bodin: L&T Index No. 99438/08 (5/21/09) (Civ. Ct. NY; Fitzpatrick, J)