Ask Sam: Is my landlord allowed to charge a J-51 fee after the tax abatement expires?
- Under the J-51 program, landlords receive a tax abatement for doing major repair work
- A condition of the abatement is that market-rate apartments can become rent-stabilized
- Once the abatement ends, units can return to market-rate, but only under specific guidelines
Spoiler: There's no such thing as a J-51 fee.
James Andrews via iStock
I live in a large, rent-stabilized building. Years ago, some of us got new leases noting the landlord received a J-51 tax abatement in the past, which had ended. The lease said our apartments were now market-rate, and we would not get a new lease if we did not agree to these terms. This month tenants received an extra fee in their rent bills labeled "J-51 fee." Is this legal? And are we still rent stabilized?
There is no such thing as a “J-51 fee,” and furthermore, you and your neighbors most likely should still be rent-stabilized, says Sam Himmelstein, an attorney at Himmelstein, McConnell, Gribben & Joseph who represents residential and commercial tenants and tenant associations.
Under the J-51 program, landlords receive a tax abatement in exchange for doing major repair work in their buildings. A condition of the abatement is that apartments that are otherwise market-rate become rent-stabilized.
Once the abatement expires, the apartments can be returned to market-rate—if the landlord follows specific guidelines.
“Under the J-51 statute, the apartment lease must state that the unit is subject to rent-stabilization by virtue of the J-51 program. It must also specify when the abatement will expire, and that from that point on the apartment will become deregulated,” Himmelstein says. “If the initial lease and every subsequent renewal lease does not have that language, then even when the abatement expires, the apartment will remain rent-stabilized until the tenant moves out.”
It sounds like your leases did not consistently include a J-51 rider, which means you should still be rent-stabilized, and certainly not charged any additional J-51 fees.
Moreover, tenants who were already rent-stabilized before the J-51 abatement was in place—which may be the case for your building—also should remain rent-stabilized once the tax break expires. (For more information on what makes an apartment rent-stabilized, see this Ask Sam column.)
“If you’re a longtime rent-stabilized tenant and the building gets a J-51 abatement, that doesn’t affect you,” Himmelstein says. “You’re not stabilized because of J-51, so that shouldn’t change anything about your status.”
If you and your neighbors believe you are being illegally overcharged on rent, your best bet is to join forces and reach out to the landlord as a group. From there, you have several options.
“You can file a complaint to the DHCR, or to the state supreme court,” Himmelstein says. “Or you could simply not pay the fee. The landlord might sue for nonpayment of rent, and you could defend yourself in housing court by saying you should be rent-stabilized and the fee is unlawful.”
Whatever you do, hiring an attorney to represent you is a good idea.
“If you pool your resources, then an attorney’s fees will be relatively affordable. You could file a multi-plaintiff lawsuit, or in effect go on a partial rent strike,” Himmelstein says. “In any case, you need a lawyer.”
Related:
Ask Sam: How do I find out if my apartment should be rent-stabilized--and the landlord owes me money? (sponsored)
Ask Sam: I found out my apartment used to be rent-stabilized. Now what? (sponsored)
Read all our Ask a Renters Rights Lawyer columns here.
Sam Himmelstein, Esq. represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts, and many other issues. He is a partner at Himmelstein, McConnell, Gribben & Joseph in Manhattan. To submit a question for this column, click here. To ask about a legal consultation, email Sam or call (212) 349-3000.
