No Deregulation of Apartment in J-51 Building

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment. Tenant's rent was over $2,000 per month, and landlord requested verification of whether tenant's household income was over $175,000 in each of the two prior years. The DRA ruled against landlord, finding that the building was substantially rehabilitated after Jan. 1, 1974, and received J-51 tax benefits. Therefore, tenant's apartment became subject to stabilization due to the J-51 benefits and was exempt from deregulation under Rent Stabilization Law Section 26-504.1. Landlord appealed, claiming that the apartment was rent stabilized before landlord received J-51 benefits, and therefore it wasn't rent stabilized solely because of J-51.
The DHCR ruled against landlord. Landlord explicitly stated to the DRA that the apartment became rent stabilized as a result of the J-51 benefits. In addition, once the building was substantially rehabilitated, it was no longer subject to rent stabilization. So, by law, tenant's apartment could only have become rent stabilized by virtue of J-51.

Roitman: DHCR Adm. Rev. Docket No. WE410037RO (7/8/08) [3-pg. doc.]