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Ask Altagracia [ SPONSORED ]

Ask Altagracia: I rent in a building with a J-51 tax break. Should I have a rent-stabilized lease?

  • While a building's J-51 tax abatement is in effect, tenants are entitled to a rent-stabilized lease
  • You should verify your building's J-51 status on the Department of Finance's website
  • If you are eligible, you can request a rent-stabilized lease from your landlord
By Outerbridge Law P.C.  | December 9, 2024 - 5:00PM
Red brick buildings in NYC

The J-51 tax exemption expires after a few decades. When that happens, incoming tenants are not given stabilized leases, but there may be existing tenants with rent-stabilized leases.

iStock

I live in a building that received a J-51 tax abatement but don't have a rent-stabilized lease. Am I entitled to one?

If the J-51 tax abatement is currently in effect, you are entitled to a rent-stabilized lease, said Altagracia Pierre-Outerbridge, attorney and founder of Outerbridge Law representing residential tenants, condo owners, and landlords. 

She explained that J-51 is a property tax exemption given to an owner for substantial renovations to a residential apartment building in exchange for making units stabilized. However, the exemption expires after a few decades. When that happens, incoming tenants are not given rent-stabilized leases, but there may be existing tenants with stabilized leases.

When the J-51 abatement is in effect, you have all the protections of a rent-stabilized tenant with automatic lease renewals and limited rent increases. 

“If the rent is hiked above the legal limit, you have a right to a refund and triple that money back,” Pierre-Outerbridge said. 

There have been some buildings where apartments with J-51 benefits have been illegally deregulated. Tenants at Parker Towers, a 1,327-unit apartment complex in Forest Hills, recently won millions in damages for fraud claims related to the J-51 program. Tenants were charged rents way above the legal limit, and some did not receive stabilized leases at all.

The building owner agreed to pay nearly $15 million to compensate tenants, making it one of the largest settlements in New York City’s rent-stabilization history.

Check your building's J-51 status

You can check the J-51 status of your building by looking up publicly available information on the Department of Finance website. 

“Plugging in the address will take you to the building’s NYC tax bill,” Pierre-Outerbridge said. If you are eligible for a rent-stabilized lease you can demand one from your landlord. “It’s possible the landlord would recognize they’ve been caught with their hand in the cookie jar and provide a stabilized lease,” Pierre-Outerbridge said. 

If the landlord refuses your request, or claims you are ineligible for a rent-stabilized lease, you can file a complaint with the New York State Division of Housing and Community Renewal for a rent overcharge. The landlord may try to evict you when your lease is up, for which you could also file a DHCR complaint for a refusal to renew.  

“In response to either a non-payment or a holdover case—where the landlord wants possession of the apartment —you would use rent stabilization as your defense,” Pierre-Outerbridge said. 

One important consideration is the length of time these issues take to resolve.

“An outcome from DHCR takes a minimum of three years,” Pierre-Outerbridge said. Any related holdover or non-payment case in housing court would run in parallel with the DHCR investigation. There’s often strength in numbers so creating a tenant association can give you extra leverage and additional protections against eviction or retaliatory behavior. 

“Forming a tenant association also enables you to share legal costs if and when necessary,” Pierre-Outerbridge said.

For the tenants at Parker Towers, their efforts paid off. With the help of the non-profit Housing Rights Initiative, they received not just the nearly $15 million settlement but also $1,191,208 in rent refunds and stabilized leases at the legal rent. 


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