Building Trades

Landlords Receiving Tax Incentives Must Follow Guidelines

December 9, 2015
Stephanie West, LaborPress NY

New York, NY – Because of initiatives by the New York State Attorney General,  landlords receiving lucrative tax benefits under Section 421-a of the New York Real Property Tax Law are now registering 1,823 market-rate apartments across New York City as rent-stabilized. As a result, affected tenants in all five boroughs will enjoy the protections of rent-stabilized leases on their apartments for the first time.

Landlords of rental buildings who accept these tax incentives must follow through on their end of the bargain and offer rent-regulated leases to their tenants. That’s a central benefit of the 421-a law,”Attorney General Schneiderman said.  “The return of these apartments to rent stabilization will not only bring economic stability to the families that occupy them, but also honor the spirit of the law as it was intended.”
The recovery of rent-stabilized units is a result of landlords either entering into settlements with the Attorney General during the course of his ongoing 421-a investigation, or agreeing to participate in the Real Estate Tax Compliance Program, a joint initiative of the Attorney General, the New York State Department of Homes and Community Renewal, and the New York City Department of Housing Preservation and Development. Vicki Been, Commissioner of HPD, said, “These landlords accepted tax benefits with significant value and are required, by law, to give their tenants rent-stabilized leases.  Most building owners step up to the plate and do the right thing, but today we send a warning to those landlords who do not. I have noted previously, this is one step in a long-term, multi-agency enforcement effort, and we will not stop until every property is brought into compliance. 

If you own a property that is receiving tax benefits, this would be a good time to heed our warning, take a close look at your legal obligations, and make sure that you are complying.  If you do not, it will be a costly mistake. The Real Estate Tax Compliance Program was established in 2015 by Attorney General Schneiderman, Governor Andrew M. Cuomo, DHCR Commissioner James Rubin and HPD Commissioner Vicki Been to address the violation of the rent stabilization requirements of the 421-a law by 194 landlords of multifamily residential rental buildings, claiming they were operating as condominiums.  To date, 111 landlords eligible to participate in the Real Estate Tax Compliance Program have signified that they will register the 1,415 units they collectively own as rent-stabilized, and have already notified their tenants of their rights. Those landlords who have not elected to participate in the Real Estate Tax Compliance Program and are still illegally depriving their tenants of rent stabilized leases now face potential revocation of their 421-a tax benefits by HPD, enforcement action by TPU and private litigation by tenants.“We will not tolerate landlords who break the law – plain and simple,” saidGovernor Cuomo. “This announcement means that thousands of tenants throughout New York City will have the full legal protections that they deserve. This is an important step toward protecting New York’s renters from overcharges and rent gouging, and we will continue working with our partners in state and local government to hold landlords accountable.”

December 8, 2015

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