Rent-Stabilized Tenant Didn't Receive 421-a Lease Riders

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2017. The DRA ruled against landlord because the apartment was rent regulated due to building's receipt of Real Property Tax Law Section 421-a tax benefits. Since the lease in effect when the benefits expired didn't contain the required notice under Rent Stabilization Law Section 26-504(c) that the apartment would be subject to deregulation when the tax benefits expired, the apartment remained rent stabilized until tenant moved out.

Landlord appealed and lost. Landlord argued that the missing 421-a lease rider shouldn't be considered a permanent shield to subsidize tenants. But the DHCR found that the Housing Stability and Tenant Protection Act of 2019 (HSTPA), effective June 14, 2019, repealed the laws and regulations relating to high-income rent deregulation. So the DRA's order should be affirmed on that basis. In addition, the building received 421-a tax benefits between 2004 and June 2014 and, as ruled by an appeals court, RPTL Section 421-a(2)f)(ii) "makes no provision for high income deregulation for units enjoying tax benefits thereunder beginning after the effective date of July 3, 1984."

60th Street Development II, LLC: DHCR Adm. Rev. Docket No. HQ410011RO (8/20/19) [3-pg. doc.]