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J51 and Deregulation

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

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J51 and Deregulation

Postby Greerwest » Sat Apr 09, 2022 3:54 pm

I'm trying to get a sense of how much of a case I may have on whether my LL illegally deregulated my unit? This particuar LL was in the press a few years ago over illegal deregulation on their other buildings. Here are the pertinaent details:

1. 16 unit building built in 1910
2. Based on rent history, unit was RC 1984 - 2010
3. Based on rent history, unit was RS 2011 - 2018. 2011 states "2011-D RS"
4. Tenant from 2018 renewed and moved out sometime in 2020. No reg found for 2019-2021
5. Building received J51 benefits in 2001 and they expired in 2017
6. LL claims unit is no longer RS given the expiration of J51 in 2017
7. I know of at least two other units that are either RC or RS. I'm deducing based on the tenants' 30+ year tenancy; they're older.
7. My lease renewal has an 50% rental increase

It's my understanding, based on reading DHCR fact sheets #41, that the expiration of J51 only impacts RS units that became RS because of J51. So, if a unit was rent regulated (I don't know if this means RC and RS) prior to J51, then the expiration of J51 would have no impact.

The question seems to be what caused the unit to become RS in 2011? Based on rent regulation guidelines/fact sheets #6, RC becomes RS when the RC tenant vacates; however, my LL is contending that the unit became RS due to J51. I'll also note that the LL bought the building in 2015, so I wonder how informed they are with all of this.

I hope this was clear enough and I appreciate any help. Thanks much
Greerwest
 
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Re: J51 and Deregulation

Postby Greerwest » Sun Apr 17, 2022 3:38 pm

Bump…..anyone?
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Re: J51 and Deregulation

Postby TenantNet » Sun Apr 17, 2022 3:41 pm

We've been backlogged, but catching up. Hopefully today.
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Re: J51 and Deregulation

Postby TenantNet » Mon Apr 18, 2022 6:27 am

A J51 is a type of tax abatement that has some similarities to the oft-discussed 421-a, but there are differences. J51 is a city program where 421a is a state program. The latter is for new construction where J51 is for significant building improvements. J51 is usually administered by HPD and DOF, but DHCR has its fingers in there as well. As of now, the program has ended for work completed after 6/29/22.

Apparently you've done this research, but this is for others reading this post.

I would start by getting educated on J51:
https://www1.nyc.gov/site/finance/benef ... s-j51.page
https://www1.nyc.gov/site/hpd/services- ... -j-51.page

And
https://hcr.ny.gov/system/files/documen ... 9-2019.pdf

It's our understanding that an apartment subject to rent stabilization prior to the J51 abatement will remain as rent stab when the abatement ends.

According to HPD:
All rental units become subject to rent stabilization or rent control for the duration of the benefits. In rental buildings, the landlord must also reduce the MCI rent increase allowed under rent stabilization as a result of the work, by a portion of the value of the tax abatement. The rent is temporarily reduced in the MCI proceeding or at a later date in a Tax Abatement Modification Proceeding. The rent is restored at the end of the tax abatement period.


And from DHCR:
In these buildings, the expiration of the tax benefit period does not affect the status of the apartments, which will remain under rent regulation at the end of the tax benefit period and thereafter.


So your assessment appears correct.

For more info, I would Google "NYC j51" or "DHCR j51"

In your case the apartments in your building should be rent stab unless converted to coop/condo or deregulated.

If the unit was RS prior to the J51 (which appears to be the case), then it would continue to be RS after the end of the J51 benefit period. No deregulation can occur in that period.

You don't say if the tenant moved in during 2018. This is the problem that we can't properly analyze rent histories based on a poster's limited description. And even then, that's just what the LL told DHCR and might not even be true.

The law changed in June 2019, ending deregulation. So if the tenant didn't vacate until 2020, the unit can't be deregulated due to high rent or high income.

Your LL says unit is no longer RS, but did they address if the unit was RS before the abatement period?

You can ask the LL why the unit became RS in 2011, but I would do your own research first. He is probably lying, but do the homework. FYI, RC units were required to be registered once, in 1984, and not in subsequent years. But you can FOIL from DHCR any and all rent information dealing with your apartment and any cases that affected your apartment, including MCI's (the work that was done that enabled the J51 ... was there also a MCI for that?). Were there any IAI's for the unit? FOIL all the rent control documents ... Maximum Base Rent (MBR), Maximum Collectible Rent (MCR) and any fuel increase applications or determinations. An MCI case folder (application) should indicate the rent roll for all units and say which were RS, RC or deregulated. There are also apartment detail and building detail sheets, but good luck getting the latter from DHCR (in some cases a subpoena might work, but you should talk to a lawyer about that).

You probably need more info on what really happened with the rent and RS status. Older tenants can probably tell you what has happened in the building. I would try to find an contact the prior tenant(s) from your apartment.

I would not go back to the LL with every new detail you discover as they will construct a series of excuses. But see if you can catch him in a lie (one that is documented and can be submitted as evidence). I think you have a case, but you need to keep working on it.
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Re: J51 and Deregulation

Postby Greerwest » Thu Apr 21, 2022 12:31 am

So your assessment appears correct.

For more info, I would Google "NYC j51" or "DHCR j51"

In your case the apartments in your building should be rent stab unless converted to coop/condo or deregulated.

If the unit was RS prior to the J51 (which appears to be the case), then it would continue to be RS after the end of the J51 benefit period. No deregulation can occur in that period.

**This is where it's confusing because according the rental history, the unit was RC when the J51 commenced**

You don't say if the tenant moved in during 2018. This is the problem that we can't properly analyze rent histories based on a poster's limited description. And even then, that's just what the LL told DHCR and might not even be true.

**The tenant prior to me moved in 2016 and moved out 2020. Again, that's according to the rental history**

The law changed in June 2019, ending deregulation. So if the tenant didn't vacate until 2020, the unit can't be deregulated due to high rent or high income.

Your LL says unit is no longer RS, but did they address if the unit was RS before the abatement period?

**The LL bought the building in 2015, so they probably don't have a clue about what took place earlier with the J51s or other improvements**


You can ask the LL why the unit became RS in 2011, but I would do your own research first. He is probably lying, but do the homework. FYI, RC units were required to be registered once, in 1984, and not in subsequent years. But you can FOIL from DHCR any and all rent information dealing with your apartment and any cases that affected your apartment, including MCI's (the work that was done that enabled the J51 ... was there also a MCI for that?). Were there any IAI's for the unit? FOIL all the rent control documents ... Maximum Base Rent (MBR), Maximum Collectible Rent (MCR) and any fuel increase applications or determinations. An MCI case folder (application) should indicate the rent roll for all units and say which were RS, RC or deregulated. There are also apartment detail and building detail sheets, but good luck getting the latter from DHCR (in some cases a subpoena might work, but you should talk to a lawyer about that).

** Based on my research, the unit was "renovated" sometime after the RC tenant vacated in 2010 or earlier. This is research mostly from the rental history and Streeteasy, which only has my unit listed three times since 2011. That matches the rental history from DHCR. Based on SE and the rental history, I'm just the third tenant since 2011. In the first listing from 2011, it mentions that the unit was renovated. Your question about why the unit became RS in 2011 is the central question and as I said earlier, I doubt the current LL knows why since they bought the building in 2015. There's no question there have been improvements to the building as that's not in dispute. The question really is did the unit become RS because that's what happens to RC units after the tenant vacates or some other unknow reason related to J51. I'm definately going to foil the information like you stated to**

You probably need more info on what really happened with the rent and RS status. Older tenants can probably tell you what has happened in the building. I would try to find an contact the prior tenant(s) from your apartment.

I would not go back to the LL with every new detail you discover as they will construct a series of excuses. But see if you can catch him in a lie (one that is documented and can be submitted as evidence). I think you have a case, but you need to keep working on it.

**Given that my lease ends before there woould be a DHCR decison, how does a holdover proceeding work? I understand that my defense would be illegally deregulation but what I don't understand is how and what rent would I pay? Would I pay my current rate with the additional increase per RS guidelines or would I have to pay the nearly 50% that they put in the lease renewal?**

Thanks alot for your help.
Last edited by Greerwest on Thu Apr 21, 2022 11:02 am, edited 1 time in total.
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Re: J51 and Deregulation

Postby TenantNet » Thu Apr 21, 2022 8:17 am

Please us the quote button when replying. You've interspersed your reply with my post and I can't figure out which is which.
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Re: J51 and Deregulation

Postby Greerwest » Thu Apr 21, 2022 11:00 am

Hello,

Thanks for the response. I tried every which way to reply back to you to no avail. The only function that seems to work is the "quick reply" function. I received error messages when trying to use the "quote" and "postreply" functions.

I've gone back and bolded my answers to your questions. Hopefully, it's clearer now.
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