Newly Created Apartment Rent Stabilized Due to J-51 Tax Benefits

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2014 when monthly rent exceeded $2,500. The DRA ruled against landlord and dismissed the case, finding that the apartment was rent stabilized solely as the result of J-51 tax benefits received between 1999 and 2010. Since tenant's leases contained no J-51 riders notifying tenant of deregulation upon J-51 expiration, landlord couldn't deregulate the apartment until tenant moved out. Landlord appealed and lost. Landlord pointed out that the building had been rent stabilized since 1974. But the apartment, 16AB, was created in 1996 by combining Apartments 16A and 16B and was registered that year as permanently exempt. It only became rent-stabilized in 1999 when the building received J-51 benefits. So the apartment became rent stabilized solely as a result of J-51 tax benefits. It was irrelevant that the prior apartments were rent stabilized.

Cenpark Realty, LLC: DHCR Adm. Rev. Docket No. EW410063RO (1/30/19) [4-pg. doc.]