The Real Deal New York

REBNY, CHIP, RSA seek dismissal of Sandy class action proposal

By Zachary Kussin | April 01, 2013 02:30PM

Three powerful New York City real estate trade groups have weighed in on a proposed class action related to Hurricane Sandy rent refunds, arguing that allowing the wide-ranging suit to go forward would set a “dangerous precedent” for future landlord-tenant disputes.

The Real Estate Board of New York, the Community Housing Improvement Program and the Rent Stabilization Organization claim that the action — which aims to retrieve rent payments from potentially thousands of New York State landlords whose properties allegedly lacked electricity, heat, hot water and elevator service following the storm — is simply too broad to proceed.

The trade groups, whose members are among the potentially affected landlords, filed an amicus brief Friday in New York State Supreme Court supporting the defendants’ motion to dismiss the suit.

“Conditions in three apartment buildings in New York City are certainly not ‘typical’ of post-Sandy conditions in the thousands of residential units located across the state of New York,” the brief said.

Additionally, the action would “encourag[e] frivolous class actions that would ultimately result in landlords settling disputes in order to avoid the economic pressures associated with a trial of aggregated disparate claims,” the brief added.

Three Manhattan residents filed the case in January against management companies and landlords that include Ogden Cap Properties and the estate of Sol Goldman. The plaintiffs claim that under New York Real Property Law, management companies and landlords are obliged to keep their premises habitable, effectively requiring them to refund rent for when buildings were out of commission after Sandy.

In late March, the defendants moved to dismiss the complaint, contending that some residents do not have standing to bring it. For example, plaintiff Lauren Schoenfeld allegedly did not pay her own rent, while plaintiff Briana Adler allegedly failed to identify her correct landlord as a defendant.

“It’s very unusal that they’ve decided to come in and lobby this trial court judge,” said Barbara Hart of Lowey Dannenberg Cohen & Hart, an attorney for the plaintiffs. “It’s almost as if these landlords have managed to bring the full force of the entire industry to bear in this tiny courtroom.”

Hart added that she’ll be responding to the allegations against her clients in court proceedings.

Sandy, which hit the city in October, affected buildings and tenants differently, the trade groups noted in the brief, meaning that the already-named defendants cannot properly represent the remainder of landlords that could be added to the class action.

Janice Mac Avoy, a partner at Fried Frank Harris Shriver & Jacobson, who prepared the brief, told The Real Deal that the suit could include hundreds of thousands of tenants who live in buildings owned by trade group members.

“Every tenant is differently situated,” Mac Avoy said. “What might be appropriate for one tenant might not be appropriate for another tenant.”

Messages to Tres Realty and the Estate of Sol Goldman were not immediately returned. Tres Realty representatives were out of town, according to a spokesperson. Ogden Cap declined to comment. A REBNY spokesperson did not immediately respond to a request for comment. CHIP declined further comment and the RSA referred questions to Mac Avoy.