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Potential Illegal Deregulation

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Potential Illegal Deregulation

Postby elliot_rage » Fri Mar 31, 2023 1:56 pm

Hello and thank you ahead of time for reading and any potential advice. I have tried to read through as many similar claims as possible here and gather the information I can before making this post.

I moved into my building July 2021 at a rent of 3k. In July 2022 the rent went up $400 and we looked into the rent history/ potential stabilization of our unit.
We found:
- Our unit was "RS" from 2004 through 08/2020.
- 2020 - "Apt Stat" becomes "RS-V" (Rent Stabilized - Vacant) - rent of 2156.58
- 2021 - REG NOT FOUND
- 2022 - REG NOT FOUND
Note: there was no preferential rent.

We moved in in 2021 on what appears to be an increase of 2156 -> 3k, then 3k->3.4 for 2022-2023. We are moving out this July for unrelated reasons but I would be interested in filing an overcharge complaint if we have a good case.

I have looked into the following to see if the apartment was legally deregulated and found:
- no tax abatement history of any kind from NYC finance records (421 or j-51)
- the latest Certificate of Occupancy was issued in 2005 after which our apartment is still stabilized for many years until 2020.
- There has been no substantial renovation done as far as we can tell -- it was not advertised to us as newly renovated nor is there any record of construction I can find. I do not know why the unit was vacant for a year (2020-2021), but could have been due to covid.
- Our lease explicitly says it is not a rent stabilized apartment

Obviously I find it really suspicious that the registrations stop the year we signed our lease and there is not official indication of if/when the rent stabilization stopped. The vacancy of the last RS tenant was after June 2019 (ended July 2020) and the rent was well below the deregulation threshold. Does this look like a good case for an overcharge complaint?

Thanks again.
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Re: Potential Illegal Deregulation

Postby TenantNet » Fri Mar 31, 2023 3:21 pm

When was the building constructed (is it relatively new?) You say there has been no 421a or J51 tax abatements. The COO probably has np bearing on this. But did the COO reflect that which actually exists?

If a lease says it's not RS, that's to scare tenants from looking into it; that has no legal bearing.

Preferential rents were more or less nullified in 2019, i.e., the PR becomes the new legal rent.

Has there been any work done in the unit, Individual Apt Improvements (IAI) - either in the 2020 vacancy or before? In 2019 the law changed to make IAI rent increases much less and there can be no High rent or high income deregulation.

Do you know the exact date/month the previous tenant vacated? Registrations are filed with DHCR by 7/31 of each year, and reflect the rent that existed on 4/1 of that same year.

The new law took effect in late June 2019. So timing of all this needs to worked out, to the day, if possible.

On overcharges, you can go back 4 years.

Have you asked the LL why it's not RS - did he give you an exact reason, in writing? Chances are he won't give you a good or true reason, but sometimes they might say. If the LL is saavy, I'd keep your research quiet so they wont' give you problems.

You can file overcharges after you've vacated. Ask DHCR how that works.

If you know the neighbors, ask them to tell you when a new tenant moves in and you can inform the new tenant of the possibility of an illegal deregulation.

These days tenants might blow you off on that, but I'd at least try.
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Re: Potential Illegal Deregulation

Postby elliot_rage » Fri Mar 31, 2023 8:15 pm

Thank you for the fast reply! Here is followup info:

The building is old and was built in 1931. There are 3 COOs for the building on file. The first one looks REALLY old and the date is illegible due to the scanning. The second is in 1965 and the third is in 2005.

Here are the exact dates for the rent history / vacancy:
2004 --> 2017 - RS - (Rent starts at $1400 and goes year by year to $2067.46)
2018 - RS - Legal Reg Rent: $2093.31 (lease 04/01/2018--03/31/2019)
2019 - RS - Legal Reg Rent: $2124.71 (lease 04/01/2019--03/31/2020)
2020 - RS-V - Legal Reg Rent: $2156.68 (unit is vacant starting 03/31/2020)
2021 - REG NOT FOUND (this is when I moved in 07/2021 and the rent became $3000)
2022 - REG NOT FOUND (Our rent becomes $3400 07/2022)

So the last tenant moved out 03/31/2020 and the apartment is registered as stabilized that year at $2156.68. The next year we move in at 3000. Even if there were IAI wouldn't they not be allowed to increase it by 400 the next year (with no further renovations) if the apartment was still stabilized?

If the building did have those tax abatements at some point, would that show up in the nycfinance search? Because that is where I looked. I cant think of any other legal way that they could have deregulated the apartment.



I cannot find any evidence of there being recent renovations during the vacancy apart from repainting and maybe some new shelves in the kitchen.

The LL is not friendly so I wouldn't lean towards asking them. They are a big corporation with many buildings.
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Re: Potential Illegal Deregulation

Postby TenantNet » Sat Apr 01, 2023 3:54 am

1931 means no 421a. But check for any J51 - that's for renovation.

COOs were first required around 1939 (I've also seen 1937 and 1938). For buildings before that, no COOs were required unless the building was altered, triggering the need to COO. It would list, floor by floor, the units and intended usage. If the use or egress changes, then a new COO is required. DOB should have more info.

What about RS registration from 1984 to 2004? Did DHCR send you the complete rent history? If not, ask again. Any indication that the space was not used as a residential apartment during those dates? Try to unravel all that mystery.

Did you check for RGB increases, if they were applied correctly. Seems $1400 to almost $2100 is a big jump. Look for IAIs, MCIs and vacancy increases.

From 2017 onward, also look at RGB and other possible causes of increases. You should also be able to ask (using FOIL) for the Apartment Detail for your unit for each year.

After late June 2019, high rent deregulation is no longer allowed. So if the RS vacancy occurred after that date, then it may have been illegal. For details on 2019, see Lebovits, part 1 at http://www.tenant.net/phpBB3/viewtopic.php?f=5&t=13981

Your analysis seems correct. For search on abatements, I'd start with the NYC Dept. of Finance site (search for "ACRIS"). Also look at DHCR and HPD. DHCR manages some and HPD manages other of these programs, not sure why, but they do.

Just curious as to the address and LL's corporate name. If you don't mind, please PM that to us.
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Re: Potential Illegal Deregulation

Postby elliot_rage » Sat Apr 01, 2023 12:02 pm

Thank you for the continued guidance, I've followed up on your thoughts and have new info.

Building history:
- The buildings first COO was in 1944? (the link says 24 but I feel like that has to be a typo). It is very illegible. Unclear what the building was used for. I would say 1944 --> 1965 is a mystery if it was residential or not.

- in August 1965 a new COO indicates the building for use of "Storage and Manufacturing". I found a plumbing supply company that used the building from 1965--2003 so that checks out.

- 2004 - COO indicates building for residential use (10 residential units). What is interesting here is that the Multiple Dwelling Law Classification is "HACB":

"HACB" means:
Hereafter Converted: Originally erected as a one- or two-family dwelling in accordance with the laws in effect prior to December 6, 1968, and converted after April 18, 1929 to a multiple dwelling in accordance with such laws, and classified as a converted dwelling as per MDL §4.10. HACAs and HACBs comply with MDL Article 6. If the original date of construction of the building is prior to April 18, 1929, then the stringent provisions of MDL § 170-a do not apply. If the original date of construction of the building is after April 18, 1929, then the stringent provisions of MDL § 170-a apply.


- To me this would suggest it went from Residential to Commercial in 1965 then back to residential in 2004.

- In 2004 the rent registrations (RS) with DHCR start. This would explain why there are none back to 1984 because no one was living there during its time as a supply company.

Rent increases:
- from the residential + rent stabilized period from 2004 to 2019 there are some increases for VAC/LEASE or LEASE/RNL but no record of increases for IAIs. Either way the rent never went above deregulation threshold before June 2019 so I dont think that would be the reason for RS stopping.

Tax exemptions:
I have checked HPD and DHCR and ARCIS again and am confident there is no history of J-51 or 421a that I could find online.

Conclusion:
My new hypothesis is the new owners from 2005 might have challenged the buildings classification as rent stabilized due to its documented commercial use from 1965 to 2004. I cant seem to find codes/guidance on if such a challenge is possible. Do you know if the conversion from commercial use is used to deregulate?

I will gladly PM you the address/management info :)
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Re: Potential Illegal Deregulation

Postby TenantNet » Sat Apr 01, 2023 1:50 pm

OK, on the material you sent by PM. I'm not familiar with the corporate name, but the family name seems familiar. I'd google them to see their history, plus check their court history. Go to https://iapps.courts.state.ny.us/nyscef/HomePage > Search as Guest > then enter corporate name, Management Co name or personal names in the Name tab.

From the address, looking at the facade in Google Street Views, it does look residential, but you just don't know without other documentation.

Try zola.planning.nyc.gov
and use the links to ACRIS and DOB
With HPD, you can get the old I-Card Images (very slow to load and shows nothing). From DHCR, they might have the old Rent Control Cards (try to FOIL them - no need, see below).

Looking at the 1965 COO, it says that the cellar is for storage, 1st floor is for manufacture of plumbing supplies and floors 2-5 is for storage of plumbing supplies.

So yes, it seems there was a conversion after 1965.
And on BIS, under Job Filings, in Dec. 2002, there was an application to "convert existing 5 story & cellar manufacturing building into residential. Click on the application number and there are many documents. This is a major gut rehab, so I would think a J51 would have been in order.
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Re: Potential Illegal Deregulation

Postby elliot_rage » Sat Apr 01, 2023 2:20 pm

So does that mean the only reason it was RS from 2004 - 2020 is almost definitely because of a J51? Or does the fact that it was maybe originally residential before it became commercial mean it was required to be RS (and therefore still is?)

I cannot find any J51 proof anywhere. I searched through all the available archive records here:
https://www.nyc.gov/site/finance/benefi ... provements.

And couldn't find the address listed in any of the years there was RS registered rent....

I have reached out to the previous tenant to ask why they moved out/if they were told their rent would no longer be stabilized.

The only court case I found with the same management company is very recent and having to do with a different property - a tenant suing for negligence.
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Re: Potential Illegal Deregulation

Postby TenantNet » Sat Apr 01, 2023 2:44 pm

Honestly, I don't know:
1. Maybe RS because it's 6+ units
2. Maybe RS from J-51
3. Maybe RS for other reasons.

Do you know for certain it was residential before it was commercial, or is that speculation?

https://www.nyc.gov/home/search/index.p ... terms=J-51

J51 Lookup:
https://www.nyc.gov/site/finance/benefi ... s-j51.page

Also see
https://a836-pts-access.nyc.gov/care/se ... e=persprop
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Re: Potential Illegal Deregulation

Postby elliot_rage » Sat Apr 01, 2023 5:46 pm

Just talked to the old tenants. They said they never saw anything in their lease indicating there was a J51 that would expire. They also said the only reason they left was because of a new job elsewhere and they were sad to do so given that the apartment was definitely still stabilized when they left (2020). They told me they wouldn't be surprised if the landlord just decided to list the apartment the following year as if it was deregulated.

I don't have any evidence it was residential before it was commercial except for this tax classification (from 2005 documents) as:
"Hereafter Converted: Originally erected as a one- or two-family dwelling in accordance with the laws in effect prior to December 6, 1968, and converted after April 18, 1929 to a multiple dwelling in accordance with such laws"


Unless there is something im missing, I am starting to feel confident I can pursue a case... Might try to set up a free consult with a lawyer. Does the DHCR do consultations or do they only see your evidence/case after a formal overcharge complaint is filed?

Just wanted to say thanks again for you help.
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Re: Potential Illegal Deregulation

Postby TenantNet » Sat Apr 01, 2023 6:21 pm

Of course the LL would likely do that.

I agree, you might have a case on this. DHCR does not represent tenants (or LLs), They are the court, so to speak. I asked one tenant atty, who responded:

Either it was vacant, it was a hospital or uni building which was sold to a landlord, was Loft Law building subject to the new ruling, there was a J-51 and you can't find it, or it has been illegally deregulated.


I doubt it was a hospital or loft.

That's why I've been looking at possible reasons why the LL might be claiming free-market.

Still, at a certain point, you will need to decide if/when to file a complaint.
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