The J-51 tax abatement and exemption program was developed to incentivize landlords of rent regulated buildings to make repairs and renovate. In exchange for often large tax credits, landlords are required to issue rent stabilized leases to tenants in any building receiving the J-51 tax abatement or credit.
In 2009, a case named Roberts v. Tishman Speyer, 13 NY3d 270 (2009) was decided by the Court of Appeals, the highest court in New York State. The Court held that an apartment that is subject to Rent Stabilization in a building receiving J–51 tax benefits can not be deregulated until the tax benefit expires, and can only be deregulated upon expiration of the benefits if the lease contained a rider advising the tenant that the unit would be deregulated upon expiration of the tax benefit.
The Roberts case rocked the real estate world in New York City. Landlords predicted that they'd suffer serious economic harm at the hands of their tenants as a result of the decision. Prior to the issuance of that decision, landlords improperly deregulated thousands of Rent Stabilized apartments in buildings receiving J-51 benefits.
in the J-51 program only precluded luxury decontrol “where the receipt of such benefits is the sole reason for the accommodation being subject to rent regulation”.10 Now the highest court in the land was finding the practice wrong.
In 2011, a second important case named, Roberts v. Tishman Speyer Properties, 89 A.D.3d 444 (1st Dept. 2011) dealt another devastating blow to landlords in NYC. The court in that case held that the 2009 Roberts decision was retroactive and that the decision did not create a new legal principle. The court basically found that language of the law was clear and that landlords should have known that they were prohibited from degregulating units receiving J-51 benefits. This decision opened up a world of litigation for landlords, because it provided grounds for tenants of an apartment wrongly deregulated under J-51 to sue for a rent stabilized lease at a lower rent and a refund of their overcharges.
RLG's attorneys are seasoned when it comes to identifying buildings covered by J-51. We have successfully returned hundreds of apartments to rent stabilization after improper deregulation by greedy landlords and have recovered significant sums for tenants who have been overcharged.