Chelsea tenants OK’d to proceed in rent hike class action

Ruling involved a reading of the landmark Stuy Town J-51 decision
September 11, 2013 06:14PM

Tenants of London Terrace Gardens, a 921-unit rental building in Chelsea, can proceed with a lawsuit alleging illegal rent hikes related to a tax abatement program as a class action, a judge ruled.

The case involved the same issues at the heart of the Stuyvesant Town-Peter Cooper Village case, where tenants claimed that then landlords Tishman Speyer and MetLife had deregulated apartments while taking tax breaks for apartment improvements, known as the J-51 program. An appeals court found in 2009 that this was illegal.

The landlord of London Terrace Gardens, at 435 West 23rd Street, said it relied on a determination from the Department of Housing and Community Renewal, which administers rent-control issues under J-51, that preceded the Stuy Town decision.

The judge was not persuaded, however, saying the decision applies retroactively.

“Defendant was not deprived of fair notice because it relied on DHCR’s faulty interpretation of a current statute, the plain text of which was readily available for defendant to read and interpret for itself,” the judge said.

Attorneys involved in the case did not immediately respond to Law360’s requests for comment. [Law360]Julie Strickland