The Appellate Division, First Department recently issued two decisions, Regina Metropolitan v. DHCR, 164 AD3d 420 (First Dept. 2018) and Raden v. W 7879, 164 AD3d 440 (First Dept. 2018), which alter the method for determining the base date rent where there has been no fraudulent scheme to destabilize an apartment. Both cases stem from Roberts v. Tishman Speyer, 13 NY3d 270 (2009), where the Court of Appeals generally held that luxury deregulation is not available where a building is receiving J-51 benefits.

‘Regina Metropolitan’

In Regina Metropolitan, the building received J-51 benefits from 1999 until 2013. The apartment in question was “luxury deregulated” in 2003 in accordance with the Division of Housing and Community Renewal’s (DHCR) interpretation of the statute. Over time, the “deregulated” rent went above $5,000. Under Roberts, however, the apartment was in fact not deregulated.