Tenants Subject to Luxury Decontrol After J-51 Benefits Expired

Landlord applied in 2010 for high-rent/high-income deregulation of tenants' rent-stabilized apartment. The DRA ruled for landlord after tenants admitted that their household income was above the statutory deregulation threshold for both 2008 and 2009. Tenants appealed and lost. Tenants claimed that the building had received J-51 tax benefits and therefore was exempt from luxury decontrol. But tenants admitted that the building's J-51 benefits expired in 2009 and were no longer in effect when landlord delivered the Income Certification Form to tenants in April 2010. It didn't matter that the J-51 benefits were still in effect when tenant's renewal lease in effect in April 2010 began.  And the building was subject to rent stabilization even before landlord obtained J-51 benefits. Tenants also argued that the appeals court's decision in 72A Realty Associates v. Lucas supported their claim. But that case didn't address the applicability of luxury deregulation after expiration of J-51 tax benefits or apartments that were previously rent stabilized without J-51 benefits.

Clark: DHCR Adm. Rev. Docket No. ZK410023RT (12/3/12) [8-pg. doc.]