Rent-Controlled Apartment Not Subject to Luxury Deregulation After J-51 Benefits Expired

Landlord applied for high-rent/high-income deregulation of tenant's rent-controlled apartment in 2011. The DRA dismissed landlord's application, finding that the building was receiving J-51 tax benefits at the time landlord filed its application. Landlord appealed and lost. Landlord correctly pointed out that the building no longer received J-51 tax benefits by 2011 when landlord filed its luxury deregulation application. But there was nothing in the rent control law that allowed resumption of the availability of high-rent/high-income deregulation after J-51 tax benefits had expired. In 2014, a New York appeals court had ruled in Ram I LLC v. DHCR that, under the plain language of Rent and Rehabilitation Law Section 26-403(e)(2)(j), rent-controlled apartments continue to be exempt from luxury deregulation after J-51 tax benefits had expired. 

Mayflower Development Corp.: DHCR Adm. Rev. Docket No. GR420036RO (5/3/19) [3-pg. doc.]