Final J-51 Reform Rules Adopted: What Property Owners Need to Know

The New York City Department of Housing Preservation and Development (HPD) has officially released the final rules for the J-51 Reform Program, significantly revising the city’s longstanding property tax incentive initiative designed to promote building improvements for affordable housing.

The final rules, effective June 20, 2025, respond to public feedback gathered during the comment period and the March 2025 hearing. HPD received 43 comments, including from Rosenberg & Estis, resulting in several meaningful revisions from the original proposal:

1. Penalty Reduction for Late Notice of Intent (NOI):
   The final rules substantially reduce penalties for failing to timely file the NOI before beginning eligible construction projects. Previously, the penalty equaled 100% of the application filing fee; now, it’s reduced to the greater of $500 or 10% of the application fee. The application filing fee is $1,000 plus $75 for each dwelling unit in excess of six.
2. Flexible Posting Locations for Tenant Notices:
   HPD revised the initial rule mandating tenant notices exclusively in building lobbies. Recognizing diverse building structures, the requirement now permits posting in any conspicuous public area within a property.
3. Removal of Certified Mail Requirement:
   The initially proposed requirement that tenants be notified of upcoming construction by certified mail has been eliminated due to concerns about the associated costs, streamlining the notification process.
4. Special Consideration for Emergency Work:
   HPD introduced a definition and special provisions for “emergency work,” ensuring urgent repairs are not delayed by notification protocols. Tenant notices for emergency repairs must be delivered and posted as soon as practically possible, rather than adhering strictly to the original 30-day advance requirement.

In addition to these revisions, the J-51 Reform Program continues to offer property tax abatements of up to 70% for qualifying projects completed between June 29, 2022, and June 30, 2026, with renovations required to conclude within 30 months from commencement. Eligible improvements include insulated roofs, gearless elevators, façade work, low-e double-glazed windows, and boilers and burners – aligning with the city’s broader sustainability objectives.

Our Advocacy Made a Difference

During the March 25 hearing, our firm, Rosenberg & Estis, P.C., urged HPD to (i) relax the 100 % penalty on late Notices of Intent, (ii) eliminate costly certified‑mail requirements, (iii) allow tenant‑notice posting outside the lobby, and (iv) carve out an emergency‑work exception so owners could proceed with urgent repairs without a 30‑day delay.

HPD adopted every one of those points in the final rules – cutting the NOI penalty to the greater of $500 or 10% of the filing fee, scrapping certified mail, expanding posting locations to any public space, and adding a new “Emergency Work” definition that lets owners post notices “ASAP.”

Experience & How We Can Help

Over the past year alone, our team has guided numerous New York City co‑ops, condominiums, and rental buildings through the J‑51 R application process – worth millions of dollars in property tax abatements. If your property could benefit from this program, reach out to Rosenberg & Estis, P.C. for representation and tailored advice on eligibility and filing strategy. Given the complexity of the J‑51 R statute – especially the interplay among HPD’s Rules, the Administrative Code, and the State Real Property Tax Law – engaging experienced counsel early helps owners and managing agents avoid costly “foot‑faults” that can jeopardize benefits.

*Disclaimer: This post is for informational purposes only and does not constitute legal advice. Readers should consult qualified counsel regarding their specific circumstances. *Prior results do not guarantee a similar outcome.