Tenants of Former Mitchell-Lama Complex Became Rent Stabilized

Tenants of former Mitchell-Lama complex sued landlord, seeking a ruling that they were subject to rent stabilization. While under Mitchell-Lama, the buildings received J-51 benefits, and continued to do so for two years after leaving the Mitchell-Lama program. The court ruled for tenants. Landlord received J-51 benefits both before and after exiting from the Mitchell Lama program, and HPD did not change that status when it permitted landlord to “pay back” the post-exit tax benefits. Tenants also would remain rent stabilized until they moved out because there was no J-51 deregulation notice in any of tenants' leases. Under J-51, tenants are subject to rent stabilization until the program benefits end, provided landlord has included lease riders notifying tenants that their rent stabilization status ends when J-51 ends. Since landlord failed to do so, tenants remained rent stabilized.

Independence Plaza North Tenants' Ass'n v. Independence Plaza Assocs. LP: Index No. 113831/04, NYLJ 1202471809777 (Sup. Ct. NY; Friedman, J; 8/30/10)