No Luxury Deregulation of Rent-Controlled Units After J-51 Expiration

The Appellate Division, First Department, ruled in October 2014 that, once a building receives J-51 tax benefits, owners are forever barred from seeking luxury deregulation of rent-controlled apartments, even after the J-51 benefits expire. Ram I v. DHCR, 993 NYS2d 706 (App. Div. 1 Dept. 2014). The same court came to the opposite decision concerning rent-stabilized apartments in the earlier case of Shiffrin v. Lawlor [101 A.D.3d 456 (1st Dept. 2012)]. The court explained that the results were different in the Ram I case because, unlike the rent stabilization laws, the rent control laws didn’t contain language stating that once the J-51 benefits expired, the rent-controlled tenants would be subject to regulation as if the J-51 benefits had never applied.