J-51 Program and Rent Re-Regulation

According to the lists available on the NYC Department of Finance web site, the following buildings receive or have received J-51 tax abatements: 100 West 86th Street (Regina Estates Inc.), 27 West 96 Street (Regina Metropolitan Co, LLC), 305 Riverside Drive (305 Riverside Corp.), 425 Riverside Drive (Mayflower Development Corp.), 205 West 88 Street (West 88 Street LLC) in Manhattan and 10-06 Neilson Street (Neilson Gardens Inc.) Far Rockaway, 209-30 43 Avenue (ABK Apartments Inc) Bayside, 211-01 42 Avenue (WPH Apts Inc) Bayside, 210-02 42 Avenue (SHR Apartments Inc) Bayside,  and 89-39 221st Place (Braddock Garden Apts) Queens Village in Queens.  These were taken from the Department of Finance published lists.

Any tenant that moved into a building as a “deregulated” tenant might instead actually be rent stabilized, if either (a) the building is now getting J-51 benefits, or (b) the building used to get J-51 benefits during the tenancy of the current tenant, and the tenant did not get notice, in the first lease and in every renewal, saying that the apartment can be deregulated when the benefits expire. In addition, a stabilized tenant might be exempt from high-income deregulation if either (a) the building is now getting J-51 benefits, or (b) the building used to get J-51 benefits during the tenancy of the current tenant and the tenant did not get notice, in the first lease and in every renewal, saying that the apartment can be deregulated when the benefits expire.

Tenants who would be in these categories but who have left their supposedly deregulated apartments are affected too: if they left less than four years ago, they can sue for overcharges.

At a minimum, the legal rent for affected tenants will be based on the rent paid four years ago, and that rent will be considered a stabilized rent, even if it is above $2,000. Tenant attorneys will be arguing that the rent should be set even lower, however, since this situation might fit within an exception to the “four year rule,” the rule that normally sets rents at the amount paid four years ago. The argument is that an exception should be made because the rent four years ago will in some cases clearly be the product of the illegal deregulation of the apartment. To get a rent adjustment, a tenant will have to file an overcharge complaint, bring a lawsuit, or join a lawsuit in progress. Attorney fees and treble damages can also be sought.

Tenants who take no action at all risk having their rent permanently set at a higher amount than they could have gotten and never being able to recover some of their overcharges. They may also be forced to deal with the issue anyway, if the landlord ever tries to evict them as supposedly free-market tenants.

This type of action really necessitates at least a consultation and probably representation by a tenant-centric attorney. It is my understanding that several law firms are currently handling a J-51 Rent Regulation cases.  At least one of them includes tenants from one of the buildings listed above.

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