SELK I N SURDEN WENIG is. GOLDMAN, LLP ATTCRN~,(S NEW '(ORK, NY 10 173-0035 rACiOA L. CRUZ . Ot"REY L . GOLOMIIN J. LAW :342 MAOISON AVE;NUE SMI:RWIN BELK I N JOst"", BURDEN ' MARflN AT OllNI£I.. T. Al.fMAN _ JAY H. BCIIG TEL; (21 .. ' e57_4466 ROSEl'" FI'X: (212) 967-0709 PIIULA ~. KAY Ht lSTtlN T. HOLL ...NO _ MIIRf l N MtLfUII ' CRIIIG G. INGBtll. COHNtC'lI:UT OF'FICE ROICR ' JACOBS. , • • "'"IN WEITPORT. TtL: laO:::1I 'A1\: l ii 031 OllV l1I M. SKALL£'" HOWIIRG W£NIO STlltll:f Cf o a aao aae·lalll3 Ilill.e044 KA"'" I. RAKOWSK ' • L AURCN C. SIILIT _ OAVID e. T CNDLtR ' KIM S. WIN'" • lllIIoI'TftO Ny " II. • IIII""TTCII N Y Ii Ct • IIO .. ,TTEO NY " Nathaniel Geller, Esq. New York State Division of Hou and Community Renewal Office of Rent Administration 92-31 Union Hall Street Jamaica, New York ll433 Re: REQUEST POR ADVISORY OPINION Dear Mr. Geller: I am writing to you seeking an Advisory Opinion regarding high rent/high income decontrol and J-Sl tax abatement benefits. ') 1. With regard to buildings that are, in the first instance, subject to Rent Regulation pursuant to the Rent Stabilization Law or the Emergency Tenant Protection Act, and an owner then files and obtains J-S1 tax abatement benefits, would an owner have the right to subsequently decont r ol housing accommodations pursuant to the high rent/high income decontrol provisions of Chapter 253, Laws of 19937 In my opinion, in these situations, an owner would be permitted to decontrol apartments after obtaining J-Sl benefits. The Rent Regulation Reform Act of 1993 provides that the high rent/high income decontrol exclusion "shall not apply to housing accommodations which became or becomes subject to this law by virtue of receiving tax benefits pursuant to § 489 of the Real Property Tax Law!! . My recollection of the legislative history, as well as a review of the statute indicates that the Legislature intended that buildings which became subject to' Rent Regulation by virtue of receiving J - Sl tax benefits, could not take advantage of the high rent/high income decontrol provisions . However, with respect to those buildings which were already subject to rent regulation prior to obtaining J-Sl benefits, the high rent/~igh income decontrol provision~ wou l d apply. ) .. . continued ...~ ,BELKI'N BUROEN WENIG & GOLOMAN, UP ( page 2 June 22, 1995 ') 2. In addition, in the event an owner has received orders of decontrol pursuant to the high rent /high income decontrol provisions of Chapter 253, Laws of 1993, or have deregulated high rent housing accommodations after vacancy, what is DHCR's position with respect to an owner who subsequently applies for and receives J-Sl tax abatement benefits? Again, with respect to buildings that have already been subj ect to rent regulation, for the reasons set forth above, in my opinion, an owner would be permitted to obtain both high rent/high income decontrol orders as well as subsequent J - Sl benefits . Your prompt response would be deeply appreciated . Very trUl:(~~ ~~. cc: ) ""'. Gary Turk, Esq. Heistein ·' ' J~ DHCR NEW YORK STATE . DIVISION OF HOUSING AND COMMUNITY RENEWAL OFFICE OF RENT ADMINISTRATION GERTZ PLAZA f 92·31 UNION HALL ST. JAMAICA, NY 11433 GeORGE E. PATAKI. GOVERNOA JOSEPH H. HOLLAND, COMMISSIONER September 28, 1995 Martin J. Heistein, Esq. Belkin Burden 342 Madison Ave. New York, NY 10173-0035 Dear Mr. Heistein: Your letter of June 22 to Nathaniel Geller, Esq. (with copy to Gary Turk, Esq.) , has been referred to this office for reply. You raised two questions with regard to provisions of the Rent Regulation Reform Act of 1993 CRRRA) on high- income and high-rent decontrol. The answers will be given in terms of the Rent Stabilization Law (RSL); parallel answers would be applicable to the other rent regulatory systems. .' ) .... ) First, you asked whether the exclusion from high-income/highrent decontrol under the RRRA of housing accommodations which " became or become subject to" rent stabilization by virtue of Section 489 of the Real Property Tax Law, under the authority of which Section 11-243 of the New York City Administrative Code (formerly Section J51-2.S) was enacted, includes units receiving "J-S111 tax benefits prior to the enactment of the RRRA. In our opinion, the word "became" makes it clear that the ineligibility ~ apply to units already receiving benefits . Please note that such ineligibility applies whether or not the J-S1 benefits constitute the sole ground for rent regulatory jurisdiction. This ineligibility is also consistent with the J -51 law, i . e. , Section 11-243 of the Administrative Code of the City of New York, which states that its benefits shall not apply to any existing dwelling which is not subject to rent stabilization or rent control. The requirement of rent regulatory coverage as a prerequisite to J-S1 tax abatement was illustrated in 143 145 West Slst Corp. v Troncellit i , Cal. 84 - 657, App. T., 1st Dept. (copy attached), in which it was noted (at p. iii): .. (Tlo the extent a landlord moves to decontrol units in a building rehabilitated pursuant to section J51, he forfeits the tax benefits afforded by that section . " 2 ) Second, you asked whether units that are decontrolled under the RRRA by virtue of high income or high rent, and thereafter receive J~51 benefits, woul d be subj e ct to stabilization. The J-5~ assisted housing accommodation, a l though previously high- income or high-rent decontrolled, would again become subject to stabilization. This conclusion would apply whether the J-Sl benefi t s c o nstituted the only ground for rent regulatory jurisdi ction or the un i ts had b e en otherwise regulated, and is consistent with the above discussion of N.Y.C . Admin . Code Section 11-243. Please be adv ised that this opinion letter is not a substitute for a formal agency order issued upon prior notice to all part ies and with all parties having been afforded an oppor tunity to be heard. CHARLES GOLDSTEIN Associate Counsel by: E/uL.Jt;, Erik~ayS Senior Attorney CG:ES ) J cc : Nathaniel Geller (co.-3D) " B E LKIN BURD E N W E NIG & AT T ORNEYS A T 3 42 MADI SO N AV E NU E SHtliWIN B£lKIN NEW YO FU<, NY 10 113·0035 JOstPH BURDEN' TtL: ( 2 12 ) S67 -44 66 . ... ) . MAllO"'" L. C RUZ . J t ,.,,,£Y l. GOLDMAN M"RTIN J. G OL D MAN. LLP L.AW FAX: (21 2 ) 8 Ei7 -07 0 9 HEI S TEIN OAHln T . AI. TNA". • JAY H. BEIIG MAllY F . OONDVAN' RDltll T T. HOlLANIJ • PAULA E. KAT CONNE CTI CUT OI"I"I C£ C""IO G. INGBIi!:R. III MAIN WE5Y'-OllT. TEL: (2C3) 'AX, (20':1 ) ROIl:fIIT JACOBS. OAVID M. S It" !.LE"· HOWARD WENIG STRUT CT a ••• C 211.-lla3 117-.0• • . October 13, 1995 MARTIN Mr:LU.CIt. KAII ... I . RAMDW!I:m', pZ'~oJ;' :Q~;;Jt for.aD Advisory Op:f,.A1ou ~ uur Oct::obar ..13 , J39!:J response tAez;oeto. U ,' ', raam814eRd., our . Aar1 i f'lr opiDiOD .:lA 'view of t~ set forth iI1 your ..w..;..a1azi~ 'YOU!: izltl!l%'prau,tian Qf ' t:ha Rent Ra~lat1"" aolg.., Act: (RIIRA) p~a:lo"" e....:lucl l ,,!!, bbu.iI1g ,ace I1atiQlUl rece1y1Jlg ·J·n· tax abatement bu.fitli !.cum, h~gll rent &114' ~gII , 1nccv. C1eCQIltrol (Luxury, Deecmtrol) ' of~ers a feaaLblc Alternatlve. . We have a~m.nt'; '. ' !0\\.Dd. at ~·i~. ". ' 6 alld 8 thereat. aI1I8IId1:1g City aellt aIld Rebablll.tatiQil Law Section . The. relevan1; pzoviQions of ~ sutRA., 2G - 403', . add;i.ng ~ S'-tWJ.liza.t~on LaW 'sece1on. ~" - 'Q4.1 and. 26 .. 504.2, ADd amending Emergency, T~t prot~c~:i.oD Ac~ Section 5. ' respectively, provide that Luxury Decontrol 18 act applicable ' to, :housing accommodatiOZl& whi t!h bl!lcame- or ~ome cw,ja"c to the .. • peoific: rent .:regulatiOZl law "- by yirtuc qf- receiring -tax ' "'aileu .... und= n.al. Property, Tax Law (arn.) s.~~j,= " " (WII1ch ' coveX'3. the -J- Sl- P1Dgrara. in ... Yoxk City, Sect10u 11- 243 $nd " "l.J,.-2ave d.t'.:nn~d. ehat:. .~lellt guidance as ~o RRRA 18 ~. :I2L~Z'OdueeZ'# Cl Holno~ndw&l III. S\ippc~ of LJ. OD the i.au.. • . M that d~t ' ~ai~8 to give. us Cha ~1.1a~ure int~6d tq Lba ~t=ut to .hlab exclude buildings receiving ·J·51' ))aneUt" from the ;' appHcabil1ty of LllXUry Decontrol, ... will conatrua 'by virtu. of" lit.erally, in acco.rdaneft V1~h rh. oJ:d.:1za;r;y m.ean1ag "c,ha%.o!. Therefore, "applying a 1.xicograph,lcal datiDitioa eo thoae WDrd.-, . ;a.io our op1n1cn th&1: their apparent _in!!' is &yJI<>lIyIIOU8 to 'by ~or ~plc \) 1a eD\lAc:1.~oci &euson or" or -because ot," U1 ·Weba:eer-. Colll:iytt D..lcC,1ona:ty, 1" ~ that aD owaer is p:e~l~ frQm I / '\ ( SIlezw1A 1le11.;.... JZ.Nz'Y D"'",,"ol of a ...... lng _~_da~1on recet v1AiJ ' J-51' tax alIata..."t be....fl.ta DDly wben tl>a nc.1p~ nf ' ';uch , IMu..t1ta 1.8 thl! .OU l'eUcm tor thl! aCcov.od,aUon b ..1z1g lI\Ibject t;D rent re~.ll R.tiOll., . . , , .. , ~ted thaI: vila... LUXIIOC1' ,Decontrol i . .. appUec1 betor.. , t:hIII '.1-51' t;ox benefil:. p"dod, has ...... lJ:ad; til. -,bAtainent ahOuld b,' rar:luc..d ' pr~rtl......t.ly. Tile!: tIM LelliRl .. ~""," racogw,,,,,d cbe 1DI1u'el1~ 1n~ty or an "QWII8r'S coz!t1nulng to enj'oy tax beJiefit:-_ . after dAl"".onc~ app~_" f~ . ~ . $tu..-c.101l 489 7(b), (1). whl.ch 'provid•• that: as to ' .. any lI\U1tiple ' dweUiAv. bod1~ _ etrw::L~" which ia diocCz!trolled sub. .quent to tbe !JI:&nting, of sucb ~f1u. tl>a lcCMj l-ola1aUv. body 0" otlla" iJoVern1A!J agency ~y witbdraw such ben.fita from such dwellinw." Bowever. ' 1t; ,.1IoIUd ba' I.. 'r t"".c' !:hal: I 1Ia~; tullV ' ~pOlldad to yo.:.r ~1 1"y. . Pl. . ._ iii. a4VJ.,oK th;3.t ·chi. aitudQD letter .1.. ' lWt a substitute lor ';0 formal aqency ~ i •• u.d 'u pon prior notic. , ) ' to all partin and arter ~.&v1l>q ..afforded .U partie..... opponlll>ity to ' b • .Iu•...d. D.1S:1p . ", ) , .