D-Day for landlords: High court hears rent overcharge cases

Rulings will determine implementation under the new rent law

Jan.January 07, 2020 02:40 PM
Housing Rights Initiative's Aaron Carr (Credit: iStock, Facebook)

Housing Rights Initiative’s Aaron Carr (Credit: iStock, Facebook)

ALBANY— State legislators passed a new rent law in June, but many of the details are about to be hashed out in court.

Today, the highest court in the state is hearing five cases involving alleged rent overcharges for rent-stabilized apartments. Landlords face treble damages for rent overcharges, which could mean a huge payday for tenants.

Each of the cases cite a pivotal 2009 Court of Appeals ruling — Roberts v. Tishman Speyer Properties — which found that landlords receiving J-51 tax benefits could not deregulate an apartment when the legal passed a certain threshold and the unit was vacant or occupied by high-income tenants. The decision allowed the state to assess rent overcharges based on the most recent legal regulated rent, even if a significant period of time had elapsed.

The Roberts decision led to a string of legal challenges alleging that landlords deregulated units while reaping J-51 benefits. Many of the cases have been brought by the Housing Rights Initiative, a group headed by Aaron Carr.

The lookback period — the window of time the state can assess treble damages for rent overcharges — was extended to six years from four by the June rent-law overhaul. The Court of Appeals will decide whether that extension also applies to ongoing overcharge cases, which would substantially increase the landlord’s liability.

Attorneys for tenants and landlords noted that the move by the Court of Appeals to hear the five cases in one day and to solicit amicus briefs from the general legal community is very unusual.

Related Articles

Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws

Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws

Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)

New NYC rent law “beginning to shut down investment”

From left: Slate Property Group's David Schwartz, Patrick Jenkins, Assembly Speaker Carl Heastie, Senate majority leader Stewart Cousins, and Julia Salazar (Credit: Getty Images)

Two takeaways for real estate from Albany’s power weekend

 Isaac Kassirer with the apartments at East 117th Street (Credit: iStock, Google Maps)

Con Ed threatens to pull plug on four Dawnay Day buildings

Watch The Real Deal's Erin Hudson explain the breaking broker fee news on CBSN

TRD on TV: Erin Hudson talks broker-fee shocker on CBS

Congresswoman Nydia Velasquez and State Senator Julia Salazar (Credit: Getty Images)

“Good cause” eviction bill amended, advances in Albany

NYCHA housing (Credit: Wikipedia)

Feds launch investigation into landlords’ lead levels