Landlord Can Restore Rents After J-51 Tax Abatement Expires

January 1, 1993

LVT Number: 6641

Landlord applied for rent increases based on the expiration of the building's J-51 tax abatement. Tenants had been rent-controlled while the abatement existed. The DRA granted landlord's application, and tenants appealed. The DHCR denied tenants' PARs. Because of the J-51 abatement, any rent increase otherwise allowable for major capital improvements (MCIs) had to be offset by a portion of the tax abatement allowance. Tenants' rents were decreased in 1975 based on the tax abatement landlord got for MCIs.

Landlord applied for rent increases based on the expiration of the building's J-51 tax abatement. Tenants had been rent-controlled while the abatement existed. The DRA granted landlord's application, and tenants appealed. The DHCR denied tenants' PARs. Because of the J-51 abatement, any rent increase otherwise allowable for major capital improvements (MCIs) had to be offset by a portion of the tax abatement allowance. Tenants' rents were decreased in 1975 based on the tax abatement landlord got for MCIs. Landlord was now entitled to restore the maximum rents to reflect the full rental value of the MCIs.

[Farber: DHCR Adm. Rev. Dckt. Nos. BK 410142-RT, BK 420203 RT (11/19/92)]. 2-page document.

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