Rent for Improperly Deregulated Tenant in J-51 Building to Be Set by Default Method

Tenant and members of a class that he represented, all tenants in a building that received J-51 tax benefits, sued landlord. Tenants, who were certified as a class by the court, said they never received rent-stabilized leases from landlord, and claimed that they were entitled to have their rents retroactively set by the default formula provided under Rent Stabilization Code Section 2526.1. Tenant asked the court to rule in his favor without a trial, and to dismiss landlord's defenses and counterclaims.

The court ruled for tenant. By showing that his apartment was improperly deregulated and that the unit's rent was neither set at a level related to any previous regulated rent nor timely registered with the DHCR, tenant made out a case that an overcharge should be calculated using the default formula. The court also dismissed landlord's 23 affirmative defenses and two counterclaims. In its decision, the court provided a helpful summary of case law that had developed since New York's highest court initially ruled in Roberts v. Tishman Speyer Props. LLP (2009) that vacancy deregulation was unavailable in a building that received tax benefits under the J-51 tax benefit program.

Tribbs v. 326-338 E 100th LLC: Index No. 150179/2018, 2021 NY Slip Op 31593(U)(Sup. Ct. NY; 5/11/21; Perry, J)