TenantNet Forum

Where tenants can seek help and help others



Being a sleuth: illegal J51 beneficiary deregulated in 2001

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

Moderator: TenantNet

Being a sleuth: illegal J51 beneficiary deregulated in 2001

Postby Sleuth40 » Mon Feb 14, 2022 6:53 pm

My free-market rent is $4,200/month. Based on DHCR data I received today, my apartment was rent stabilized (rent was…$650 in 2001) and deregulated in 2002 while vacant. There was a renovation and adding space (the upstairs) in 2001. However, the building was still receiving J-51 tax abatement at the time (initial year 1993 and abatement lasted until 2004 in which it received a $875 abatement). Yet, the owner registered the unit as permanently exempt from rent stabilization after the 2001 renovation probably claiming “High-Rent vacancy deregulation”. Should I write to my landlord and ask him to re-register the unit as rent-stabilized and offer me a rent-stabilized lease? or would we consider that it would have come out of stabilization anyway in 2004 when the tax abatement ended?
Last edited by Sleuth40 on Wed Feb 16, 2022 5:04 pm, edited 1 time in total.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Mon Feb 14, 2022 8:04 pm

That doesn't sound right, but I can't give you chapter and verse on J51 and deregulation. I would not contact your LL on this until you get it cleared up; you will need to know what the law says on J51 and deregulation.

I strongly suggest you speak with a tenant attorney (some advertise on this site) who can look at your specific situation and properly advise you on your situation.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Tue Feb 15, 2022 6:43 pm

The problem is that while J-51 would have forbidden deregulation, the fact that is is a newly created unit is a problem. The apartment was converted from a one floor apartment to a duplex apartment which included additional living space, installation of an internal staircase and additional roof-top penthouse. This created a new unit obliterating the existing apartment thereby rendering its rental history meaningless. However, the building was still receiving J-51 abatement.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Tue Feb 15, 2022 7:32 pm

You have a point. I'm aware of the "new unit" argument and how it essentially voids the rental history of the unit. This might be where the history of the unit becomes important - when did the conversion take place? What happened with the prior tenants?
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Tue Feb 15, 2022 11:42 pm

The tenant vacated in 2000 as in died that year. the renovation/creation of the "new unit" took place in 2001 and then in 2002 it was rented free market. Yet the owner continued to claim J51 benefit which had started in 1993 and he did so until 2004.
Last edited by Sleuth40 on Wed Feb 16, 2022 5:05 pm, edited 1 time in total.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Wed Feb 16, 2022 12:14 am

So the question is, should the owner get the last 3 years of the J51 abatement, or should the deregulation be invalidated? I would imagine you're hoping for the latter. Have you gotten an opinion from a tenant attorney?
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Wed Feb 16, 2022 1:53 am

Well I am hesitant to even consult at this point because between Park v New York State Div. of Hous. & Community Renewal and Dixon, I fear the response is the deregulation in 2001 was done in good faith and even if the landlord had waited after the J51 benefits expired - he would have achieved luxury deregulation in 2010 or so between the 2001 vacancy rent-hike and the 1/40 rent increase for individual apartment improvements.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Wed Feb 16, 2022 2:45 am

Not often do we get a poster who has actually done some research :)

I'm not sure what concerns you have with Park, but that had to do with a RC Fair Market Appeal being time barred and Roberts v Tishman Speyer (13 NY3d 270 [2009]). I haven't read through the entire decision. The tenants in that case were represented by tenant attorneys Sokolski & Zekaria.

In general, there is a 4-year statute of limitations on overcharge claims (HSTPA says six years, but see Regina). But on status issues, as far as I know, there is no time limitation.

There is also a six year SOL for LLs seeking unpaid rent.

In general if you're seeking status (regulated or not), then being time-barred is not an issue for you. (of course, there may be exceptions, but that's my understanding). However, Park may complicate things as you suggest.

I'm reluctant to comment on the merits of J-51 as it's not an area upon which I've concentrated. That's why I suggested you consult with someone who does know the J51 issue. I'm not familiar with Dixon.

Your fears notwithstanding, I would still consult with an expert on this.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Wed Feb 16, 2022 10:30 am

In the matter of Park, the judge decided that the unit would have been deregulated anyway years before the current plaintiff moved in. He recognized the unit had been improperly deregulated in the early 2000s while the building was receiving J-51 abatements but decided the landlord misinterpreted J-51 in "good faith" (meaning many landlords believed they could deregulate while getting J51). The judge decided the plaintiff had no ground: "When the petitioners leased this apartment in 2010, all the circumstances permitting luxury decontrol were present and satisfied. By then the J-51 benefits had expired. They had expired before Playfair, the previous tenant, moved out of the apartment. [...] Consequently, the apartment was properly leased to petitioners as unregulated and at a free market rent (RSL § 26-504)." It is described as a "common sense approach to Roberts".

In the matter of Dixon, the judge decided that because the unit had been radically changed after the deregulation, the rent history was irrelevant. "A different but related issue arose in Dixon, supra. It has long been settled that where a landlord combines two apartments into an apartment that did not previously exist, the landlord is entitled to collect a first rent. See, 300 West 49th Street Assoc. v. New York State Division of Housing and Community Renewal, 212 AD2d 250 (1st Dept 1995). In Dixon, the landlord combined two vacant, adjoining apartments in 2004, and rented the combined apartment as deregulated based on a rent in excess of $2,000. Benjamin Dixon, who moved into the combined apartment in 2013, commenced a declaratory judgment action asserting, inter alia, that the apartment was rent stabilized. Dixon cited Altman in support of this claim. The Supreme Court rejected Dixon's argument."

Section 2520.11(r)(10) of the Rent Stabilization Code states that 'where an owner substantially alters the outer dimensions of a vacant housing accommodation, which qualifies for a first rent equal to or exceeding the applicable amount qualifying for deregulation, as provided in this subdivision, exemption pursuant to this subdivision shall apply.' Once 'the perimeter walls of the apartment have been substantially moved and changed and where the previous apartment, essentially, ceases to exist,' the apartment is no longer rent stabilized 'thereby rendering its rental history meaningless,' and entitling the owner to 'first rent' within the meaning of Section 2520.11(r)(10).

Here, the documentation submitted by the owners showed that the apartment was converted from a one floor apartment to a duplex apartment (like mine I suspect). This created a new unit obliterating the existing apartment thereby rendering its rental history meaningless.

Thus, the Supreme Court ruled that Altman does not apply to newly created apartment.

Both cases are discussed here https://www.rosenbergestis.com/wp-conte ... enberg.pdf

Of course in my case jumping from $616 RS in 2001 while receiving J-51 to now a $4K/month unregulated apartment by ignoring the J51 requirement that all units in the building were to stay RS until 2004 was not kosher but I am not sure I would prevail. The 20% vacancy bonus plus a $55K renovation would have brought the rent to the luxury threshold: (616*1.2) +(1/40*(55,000)) anyway.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Sat Mar 26, 2022 9:26 pm

Sorry for the delay.

I was going to say either you're an attorney writing this stuff or you're quoting some other source. But Google doesn't show a source for the text in your post, and that text doesn't match the pdf file from Rosenberg & Estis (which, BTW, is a LL law firm and their view might differ from those of tenant attorneys).

The primary issue in Altman was not a new unit, it was a chicken & Egg -- which comes first issue and the courts got it wrong.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Sat Nov 12, 2022 6:30 pm

So I finally hired a lawyer for this as my lease was not renewed (I have kids).

Here is what the lawyer responded:

"I think that the 2 precedent cases – Matter of Park and Dixon – are clearly not in our favor. Also not in our favor is that the apartment was deregulated years before you moved in and various increases “that are otherwise permissible” would play into everything, so that by the time you came around, the apartment would still be deregulated anyway.

Based on everything, I do not see a necessary element of obtaining a preliminary injunction, namely: likelihood of success on the merits."


I am disappointed (more than disappointed - I have no revenues at the moment - it's impossible for me to find a new place). My understanding was that the net result of Roberts that if a landlord improperly deregulated while receiving J-51 benefits and now J-51 has expired and the unit was not re-regulated post Roberts, then that unit is still subject to rent stabilization and must be re-registered independently of how long the current tenant has been in the unit or the reason it was deregulated during J-51 abatement.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Sat Nov 12, 2022 9:30 pm

I just realized that you started a new thread on this subject at viewtopic.php?f=3&t=14885&p=61838

That is a major problem on this forum, and the forum rules addresses this. How can anyone follow the issue with two competing threads? When you start a new thread, I am not aware of what you had stated previously.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Sat Nov 12, 2022 10:39 pm

Yes. Sure. Although the second thread is intended to be a complete different and specific topic. The question on that second thread (viewtopic.php?f=3&t=14885) is whether the DHCHR rental history for a unit would show amended registrations and/or voluntary re-registration and how this would show on the history. The answer is inconclusive and a long-winded way of saying "not sure but why don't you ask DCHR directly".
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby TenantNet » Sun Nov 13, 2022 4:32 am

We replied to this 11/12/22 comment on the second thread. But any comment, please put here. When someone comes back - months later - with an update or new question, it behooves me to reread the entire thread again, and that takes time, of which is not a luxury. So let's move on. I'll try to reread it all again so I can at least answer your new question, if possible. Give us several days, and if not, just "bump" the thread.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 10310
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Being a sleuth: illegal J51 beneficiary deregulated in 2

Postby Sleuth40 » Tue Jan 24, 2023 10:17 am

As expected my landlord - a family which controls a huge swath of the Upper West Side - did not renew my lease because the downstairs neighbor complained about my sons being too noisy (we live on the top floor of a brownstone, I am a single dad). I tried to iron things out with the landlord to no avail. I received my "notice of holdover petition" last week and have to show up in housing court. I only lived here one year and therefore the landlord is free not to renew the lease without cause. However, the unit was illegally deregulated in 2002 through "RENOV + ADD SPACE" (way before I lived there) while the landlord was still receiving a J-51 Tax abatement. In addition, the holdover petition mentions that "the apartment is exempt pursuant to the rent stabilization laws because it was previously subject to the Rent Stabilization Law section 26-504.2 as a "High Rent Accommodation": which became vacant after April 1, 1994" which is inaccurate the reason mentioned in the "rental history" of the unit is "RENOV + ADD SPACE". Do I have any leverage or should I just start packing? I have no provable income at the moment (just launched my shop), it's the middle of the school year and moving is going to be incredibly burdensome for me and the boys.
Sleuth40
 
Posts: 12
Joined: Mon Feb 14, 2022 6:45 pm

Next

Return to NYC Rent Regulated Apartments

Who is online

Users browsing this forum: Google [Bot] and 51 guests