| Matter of Schiffren v Lawlor |
| 2012 NY Slip Op 08445 [101 AD3d 456] |
| December 11, 2012 |
| Appellate Division, First Department |
| In the Matter of Alan Schiffren, Appellant, v Brian Lawlor,as Acting Commissioner of the New York State Division of Housing and Community Renewal,et al., Respondents. |
—[*1] Gary R. Connor, New York (Martin B. Schneider of counsel), for Brian Lawlor, as ActingCommissioner of the New York State Division of Housing and Community Renewal,respondent. Belkin Burden Wenig & Goldman, LLP, New York (Magda L. Cruz of counsel), for 98Riverside Drive, LLC, respondent.
Order, Supreme Court, New York County (Paul Wooten, J.), entered June 8, 2011, whichdenied the CPLR article 78 petition seeking annulment of the final determination of the NewYork State Division of Housing and Community Renewal, dated January 5, 2010, deregulatingthe subject rent-stabilized apartment on luxury deregulation grounds, unanimously affirmed,without costs.
This court is called upon, once again, to consider the interplay of an owner's participation inthe J-51 tax benefit program (see RPTL 489; Administrative Code of City of NY §11-243) with luxury deregulation of a rent-regulated dwelling unit (see Rent StabilizationLaw of 1969 [Administrative Code of City of NY] § 26-504). It is undisputed thatpetitioner was a rent-stabilized tenant, pursuant to the Rent Stabilization Law of 1969, when hefirst moved into the dwelling unit in September 1989. The owner subsequently obtained J-51 taxbenefits, which have since expired. The issue raised on this appeal is whether, as a matter of law,a dwelling unit that was subject to rent regulation before an owner received J-51 tax benefits canbe subject to luxury deregulation once those tax benefits expire. This question has not beenpreviously resolved, either by the Court of Appeals' decision in Roberts v Tishman Speyer Props., L.P.(13 NY3d 270 [2009]) or in any of our later decisions.
The plain language of Administrative Code §§ 11-243 and 26-504 (c) supportsthe conclusion that the legislature intended to provide that a building that is already regulatedwhen it receives J-51 benefits will continue to be regulated under the original rent-regulationscheme when the tax benefits expire. We conclude that the reversion to pre-J-51-benefitrent-regulation status includes the right of an owner to seek luxury deregulation in appropriatecases (cf. Matter of 73 WarrenSt., LLC v State of N.Y. Div. of Hous. & Community Renewal, 96 AD3d 524, 529 [1stDept 2012]). While there is a collateral issue regarding whether tenant vacatur or notice in [*2]the lease is necessary to trigger reversion of a dwelling unit to theoriginal rent-regulation regime, petitioner does not advance, and we do not decide, this issue onappeal. We only hold that luxury decontrol is not per se prohibited once the J-51 tax benefitsexpire on a dwelling unit that was subject to rent regulation before the tax benefits wereobtained. The article 78 court, therefore, correctly concluded that upon expiration of the owner'sreceipt of J-51 tax abatements, petitioner's apartment continued to be subject to regulation underthe same terms and conditions as before the receipt of J-51 abatements, making it subject toluxury decontrol.
The court also correctly held that mandatory IRA distributions received by petitioner in 2006and 2007, which were reported as income in petitioner's New York State income tax returns,were properly included in the calculation of his income for those years (see Matter of Nestorv New York State Div. of Hous. & Community Renewal, 257 AD2d 395 [1st Dept 1999],lv dismissed and denied 93 NY2d 982 [1999]).
Finally, the court properly held that petitioner's failure to argue before the agency that hisdaughter should have been served with an income certification form precluded him fromadvancing that position in his article 78 petition (see Matter of Parcel 242 Realty v New YorkState Div. of Hous. & Community Renewal, 215 AD2d 132 [1st Dept 1995]).Concur—Gonzalez, P.J., Saxe, Catterson, Acosta and Gische JJ. [Prior Case History:2011 NY Slip Op 31511(U).]