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Order of Exemption from Rent Stabilization

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

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Order of Exemption from Rent Stabilization

Postby brooklynstabilized » Fri Apr 07, 2023 9:27 am

Hi All,

We received a form that shows the new building management wants to have HPD get rid of the Rent Stabilization in the building due to substantial rehabilitation. They did redo the building and our apartment. We told them they only have to repair the violations but they insisted on doing the whole apartment over so that they don't have to be bothered. They told us our rent would stay the same and we would still be rent stabilized.

They sent a bunch of forms showing the work they did and paid for. I noticed they claimed all 8 units were vacant during the construction. This is not true. Me and my Mom, who is elderly and on disability were the only tenants living in the building during construction. The other tenants took a buyout and left. Do you think they'll be able to get rid of our rent stabilization? Also, what should we put as the response back to HPD? They offered us multiple buyouts that we turned down as well. They went as high as $350,000. Please advise. Thanks so much.
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Re: Order of Exemption from Rent Stabilization

Postby TenantNet » Fri Apr 07, 2023 1:38 pm

Obviously they lied to you. Can you send us a PDF of the form you received - use Private Mail, don't post to the public area of the forum. If not on the form, send us the address as well.

This sounds like a J-51, but let's see what it says.

Letting them redo the apartment was (if you're rent stab) a mistake. Before 2019 that could be an IAI leading to deregulation. They still have IAIs, but the payoff for the LL is much less and there's no more high rent deregulation.

But J-51 for total rehab is still around (and I'm not an expert on J-51's). They might be able to deregulate units by combining them or rearranging the outer walls. That's called "Frankensteining."

I would immediately consult with - or retain - an attorney. Shop around, get one who really knows how this all works. Not all do. BEFORE you reply, talk to a lawyer.

BTW, with buyouts, you might have tax liability, and if a lawyer negotiates it, they might take a cut of the money ... we've seen as high as 1/3rd. But it depends on how much work they do. I would never sign anything like that without legal counsel.

And if you take any money, understand you will have to move (how much time they give you is important), you will likely not find another unit in your area for similar rent, and you would likely have to leave your community. Plus, more RS units could be lost forever.

The buyout money really doesn't go that far. $350,000 sounds like a lot, but consider the attorney's cut, taxes, moving expenses and the new rent, it really doesn't last that long.

One other thing, from what you describe, it's possible the owner might be hoping this could be part of a larger development scheme. See what might happen on your block or in your neighborhood.
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