1250 Broadway, 27th Floor New York, NY 10001


The J-51 Tax Exemption/Tax Abatement Program (J-51) provides tax incentives to owners of residential structures which have been substantially rehabilitated (or commercial buildings that have been converted to residential use).

In exchange for that relief, these rental units must be registered with the New York State Division of Housing and Community Renewal (DHCR) and are subject to rent stabilization for the entire time the J-51 benefits remain in effect.

But there's a catch: By law, the tenants must be given written notice (upon signing the initial lease and upon each renewal) advising them when the J-51 benefits are scheduled to lapse. Should a landlord fail to adhere to that requirement, the unit(s) in question may remain subject to stabilization until voluntarily vacated by the tenant(s) after the J-51 benefits period has expired.*

By way of example, in 245 PAS Property LLC v. Gamboa , the landlord's lease rider informed the tenant, Rosemarie Gamboa, that the J-51 benefits were scheduled to lapse on June 30, 1991, when the actual expiration date was June 30, 1997.  (Oops!)

Since that six-year "discrepancy" was not viewed to be inconsequential or "de minimus," both the New York County Civil Court and the Appellate Term, First Department, were of the opinion that the tenancy could not be terminated and that unit remained subject to rent stabilization "because of the landlord's persistent failure to furnish tenant with a proper lease notification specifying that the apartment will be deregulated at the expiration of the tax abatement period."

This landlord clearly made a bad move gambling with Gamboa.

For a copy of the Appellate Term's decision in this case, please use this link: 245 PAS Property LLC v. Gamboa

For the Appellate Division's take on this issue, see: Matter of Lomagno v Division of Housing & Community Renewal

For a copy of a guidebook released by the New York City Department of Housing Preservation and Development, please use this link: J-51 Guidebook (2004)


*To that end, Section 2520.11(o) of the Rent Stabilization Code requires that "each lease and each renewal thereof of the tenant in residence at the time of the expiration of the tax benefit period includes a notice, in at least 12-point type informing such tenant that the housing accommodation shall become deregulated upon the expiration of the last lease or rental agreement entered into during the tax benefit period, and states the approximate date on which such tax benefit period is scheduled to expire."