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How to find out if your building has a J-51 tax abatement—and if your rent was raised illegally

By Virginia K. Smith  | September 1, 2016 - 10:30AM

Thousands of New York City tenants who should be rent-stabilized are paying market-rate rents or being forced out of their apartments, thanks to a colossal failure of enforcement around the J-51 tax break, according to an in-depth new report from ProPublica.

The J-51 tax abatement—which offered tax incentives for landlords to repair and renovate older buildings—offered owners serious tax breaks, but with the stipulation that tenants in the building receive limited rent increases and stabilized leases. This is even if their rent was above the de-stabilization threshold, which used to be $2,000/month, was increased to $2,500 in 2012, and is now $2,700/month. (J-51 is less well-known than the 421a tax abatement, which offered tax breaks to new development buildings in exchange for creating stabilized units, but expired earlier this year.)

However, tenants in these buildings were never informed of their rights (and even information given to landlords by the state has been fuzzy), and in a not-especially-shocking twist, not all landlords benefitting from J-51 have been eager to pass the savings on to renters in their buildings who might not be any the wiser that they're being overcharged.

Which means that your best bet as a tenant is to take matters into your own hands. As we've written previously, there's a good amount of research you can do on your own to investigate your apartment's rent stabilization status. 

To find out if your landlord received a J-51 abatement, simply plug your building's address into a tool on the HPD homepage, which will then give you the building's block and lot number. From there, the Department of Finance has a section on its website where you can enter a building's block and lot number to find out its J-51 benefit history. And if your building was receiving J-51 tax breaks when you moved in, that means your apartment should at the very least be rent-stabilized, and likely cheaper than what you're currently paying.

"Finding out if your building has a J-51 and if you should be stabilized is the easy part," says renters rights attorney Sam Himmelstein (FYI, a brick sponsor). "Where it gets complicated is figuring out what your legal rent should be."

"Most of the time when people come to us with this situation, they've been treated as though their apartment is fair market, when it turns out it's not," adds Himmelstein's colleague Ron Langeudoc, who frequently works on J-51 cases. "Consult with an attorney if you're interested in pursuing an overcharge. At this point in time, there's not a consensus in the law as to how you calculate the overcharge; there are different formulas for different situations."

But if you come to your landlord with this information about your apartment's status, it's very likely that they'll want to do everything to avoid a court case, and make you a speedy offer. "Something we've seen a lot is that as soon as a tenant gets a lawyer, the landlord gets a lawyer, and almost immediately sends a check to compensate for overcharges, agrees to lower the rent going forward, and concedes stabilization status." However, be skeptical of a first offer, as Himmelstein notes: "The new lower rent being offered usually isn't as low as we think it should be. We've had clients who've ended up receiving huge checks and had rent lowered significantly."

Regardless of the potential rent reduction, it's worth pursuing the issue if for no other reason than to gain rent-stabilizated status, and all the protections that come with it. "Getting stabilization status is a huge victory," says Himmelstein. "It means you're in that apartment pretty much as long as you want to, and might even be able to pass the apartment on to family members, as long as you play by the rules."

**This story originally ran on July 19, 2016**


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