Landlord Not Entitled to Enriched J-51 Benefits

Facts: Under the J-51 tax benefit program, landlord could get enriched benefits, including a 32-year partial tax exemption and a 100 percent property tax abatement for moderate rehabilitation in a substantially occupied class A multiple dwelling. Landlord applied for these benefits. But HPD granted landlord only ordinary benefits---a 12-year tax exemption and 90 percent real property tax abatement. Landlord appealed. Court: Landlord loses. Landlord's improvements qualified for the enriched tax benefits. But landlord didn't comply with the notice regulations. Landlord had to serve copies of tenant notices before starting the work by certified or registered mail. Instead, landlord's superintendent served tenants by hand delivery and admitted that some tenants were served by leaving a copy of the notice under their apartment doors. Landlord also didn't serve prior notice on HPD. So, HPD wasn't able to ensure that tenants weren't harassed as the rehabilitation work began. The DHCR's rent registration records showed that 30 percent of tenants living in the building at the start of the rehab had moved out two years later. Landlord claimed it was only 17 percent and that it was for a variety of reasons having nothing to do with the rehab work. Still, the court found that HPD's ruling was reasonable; there may have been harassment.

Matter of Klein: NYLJ, p. 25, col. 5 (10/27/93) (Sup. Ct. NY; Schlesinger, J)