Tenant Was Rent Stabilized Based on PHFL Moderate Rehab

In 2011, landlord asked the DHCR to determine tenant's rent regulatory status. Tenant moved into the apartment on Aug. 25, 2002, under a one-year lease. She moved out on Aug. 31, 2005. Landlord claimed that tenant wasn't rent stabilized because prior landlord wasn't in receipt of J-51 tax benefits as of August 2002. The DRA ruled against landlord and found that tenant was subject to rent stabilization while she lived in the apartment. Landlord appealed and lost. Tenant had sued landlord in State Supreme Court in November 2004, claiming rent overcharge. Landlord claimed that the building had been substantially rehabilitated in 1985 and therefore became exempt from rent stabilization. Prior landlord received J-51 tax benefits in 1985, but those benefits expired in June 2000, prior to tenant's occupancy. The court case was put on hold so that landlord and tenant could ask the DHCR to determine if tenant had been rent stabilized.

The DRA found that the apartment became rent stabilized pursuant to PHFL Section 608 under a rent restructuring order issued on March 26, 1985, based on moderate rehabilitation. The DRA also ruled that the apartment remained rent stabilized after the J-51 benefits expired. The 1985 agency order clearly held that the building was subject to rent stabilization. Therefore, since the building was otherwise subject to stabilization, it remained so even after the J-51 benefits expired. PHFL does not state that rent stabilization coverage is discontinued following the end of J-51 tax benefits or when the city's mortgage loan is satisfied.

Manhattan Valley Realty LLC: DHCR Adm. Rev. Docket No. AM410025RO (2/28/14) [8-pg. doc.]