J-51 Doesn't Bar High-Income Deregulation in Co-op Building

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2012. The DRA ruled against landlord, finding that the building was receiving J-51 benefits at that time and therefore wasn't subject to luxury deregulation. Landlord appealed, and the case was reopened. The newly constructed building first became rent stabilized in the 1970s due to landlord's receipt of 421-a tax benefits. Those benefits expired in the mid-1980s. Under Real Property Tax Law Section 421-a(2)(f)(i), high-income rent deregulation was available after the 421-a benefits expired. The apartment didn't become subject to rent stabilization due to the building's later receipt of J-51 benefits because the building converted to cooperative ownership in 1982, before receipt of the J-51 benefits. Rent stabilization applies to J-51 buildings only if they are not owned as cooperatives. 

Ogden Cap Properties LLC: DHCR Adm. Rev. Docket No. CS410046RO (2/26/15) [8-pg. doc.]