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Ever since Roberts v Tishman Speyer Props., 13 NY3d 270 (2009), it has been an article of faith that a building's receipt of J-51 benefits means that all of the apartments therein automatically become rent-stabilized. If those apartments were already rent-stabilized, they become, under the logic of Roberts, stabilized a second time. The second layer of rent stabilization has the effect of barring luxury deregulation, at least until J–51 benefits expire. See, Schiffren v Lawlor, 101 AD3d 456 (1st Dept 2012).
In West Village Houses Renters Union v WVH Hous. Dev. Fund, Sup. Ct. NY Co. Index No. 118482/06 (Oct. 19, 2018), Justice Barbara Jaffe held that the tenants of 32 unsold cooperative units at the West Village Houses complex were not rent-stabilized, even though their buildings had received J-51 benefits.
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The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
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