NEW YORK STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL amass OF RENT ADMENISTRATION eea'rz PLAZA) 92-31 uuaow HALL ST. DHCR JAMAICA. NY 11433 demos a. FATAKI. GOVERNOR Januaxy 30 . 1997 Sherwin Belkin, Esq. Belkin Bordon Wenig Goldman,. 342 Madison Ave. New York,. NY 10173-43035 Dear Mr . Eelkin: Your latter of January, 7 to Assistant Commissioner Scavey and your follow?up fax submissionscf. January,13 and Januaxy 16. have beamreferred the undersigned. for! reply: You inquired.- about.? a situation" arising under Real Property Taxlaw 42kg, enactedty Chapter 4. of? the which. provides for-.a program of tax abatements for Lower Manhattan conversions.from nonresidontial to: residential .usa.? Spccifically; you inquired deregulationapplies to converted units which. will .re'ntu for $2,000. orrmore per. month and whethezw, if so, such deregulated status would. apply if, tenants ?ara granted rent. abatements during the completion of conotruction, with such abatements bringing the rent below $2,000 per month. eligible multiple dwelling shall be fully subject to control under ouch local law. unless exempt under such local law from control by reason of the cooperative or condominium status of the dwelling unit, for the entire period: for which the eligible multiple dwelling is receiving benefits pursuant to this section . You have submitted an exchange of correspondence from 1955 (shortly before the passage of Chapter 4). betwaen Mayor Giuliani and Senate Majority Leader Bruno which indicates an intention that high-rent deregulation be. available. Senator Bruno observed that such availability "comports with the Senate?a own reading of this legislation . . . This indicates that the issue was discussed by members of at least one house. We have examined the bill jacket, and we find nothing differing from this interpratation. We conclude deregulation is available with respect to Sec. 421-43 units. 2 a. Another issue is whether, considering that high-rant dorsgulation operates upon vaoanoy, deregulated status must await the vacancy of the first residential tenant or is available from the-inception of residential tenancy. We.consider the situation you described to.bs analogous to the "first?rsnt" scenario, which .outea'dimensions of an apartment which in of.0perational Bulletin 95~3h "first?rent" situation,-th? subject apartments in your situation did.not exist~on thowbass data of rent stabilization.~ We". oonoludol that" high?rents deregulation. is. availablervfrom tho- inoaptiom.of.tho first residential tenancy. - You have also asked:whethsr the proposed construction?related rent abatements would operate to:prsoluda high~rent.derogulation. wo-agrsa that.the.tean"prsferontial rent" is inapplicabls to such abatementss ThE'abatements would more accurately be-described as concessions for sgooifio'months~on a cmm~timo basia,gnotuto be prorated; throughoutv the";laasev under: the. limited circumstances? you ,dosoribsd, lasso; sp?oifi?sy an provided that the- terms of}. are. in? the Iaas?o, such: agrees to pay:can rent (evon if the number of months the:abatsd?rentswill?oontinue is~notrknown at tho- unit would'havesderagulatod~ status during, as of abated rent. opinion assumes, involved are~oonduoted in good faith and without any attempt to evade: rant laws and. regulations. The renovation work. must be completed within a reasonable time, with.ths rant abatoments for the affected units-thRS?terminating, and the tenants thereupon being charged and actually paying rents of $2,000 or more per month as provided in their losses. . Please be advised that this opinion.lotterhis not a substitute for a formal agency order issuad upon pxior;notica to all parties, such parties having been afforded an opportunity to be heard. vary-truly yours, Charles Goldstein Associate Counsel 86% $14?ng Erik ngeways Senior Attorney by: Darryl J. Seavey (COL-306) CC: