This landlord’s legal win could give boost to other owners in overcharge cases

Judge ruled that tenants are only entitled to four-years in back rent at Kibel Companies’ 90 West

New York /
May.May 15, 2020 01:30 PM
90 West Street (Credit: Google Maps, iStock)

90 West Street (Credit: Google Maps, iStock)

In another win for landlords, a state Supreme Court judge found that the new rent stabilization law’s rules don’t apply to a 2015 rent overcharge case.

State Supreme Court Judge Robert Reed ruled on Friday that when calculating rent potentially owed to the tenants of Kibel Companies’ 90 West Street, the court could only allow a four-year lookback, rather than the six-year review established in the Housing Stability and Tenant Protection Act of 2019.

Reed cited an April Court of Appeals decision — in the case of Regina Metro. Co., LLC v. New York State Division of Housing & Community Renewal — which found that the HSTPA couldn’t be applied retroactively to rent overcharge cases.

The decision is the latest reinforcement of the Appeals Court order — with an important distinction. At 90 West, Kibel Companies was accused of wrongly deregulating apartments while receiving 421g tax benefits. The Appeals Court decision, however, involved a landlord participating in the city’s J-51 program. Sherwin Belkin, who represented Kibel in the case, said Reed’s ruling shows that the highest court’s decision applies to all overcharge cases.

“I think it’s incredibly important,” he said. “I think many tenant advocates were trying to circumscribe Regina as being a J-51 case.”

Representatives for 90 West’s tenants didn’t immediately return requests seeking comment. Lucas Ferrara, an attorney for a tenant seeking class action status in a related lawsuit, said the courts still need to provide further guidance on how back rent is calculated.

“In light of the ruling by the Court of Appeals in Regina, this decision is not surprising, and shows that the method for determining rent overcharges remains in a state of flux,” he said in an email. “Indeed, because there are still open questions on how to apply the four-year rule in the 421-g context, we look forward to further guidance from the courts.”

State courts have long been grappling with the question of whether owners receiving 421g, a tax exemption and abatement provided to landlords who convert commercial buildings for multifamily use, should be able to deregulate units once rents reach a certain rate. A series of tenant lawsuits were filed five years ago, arguing that apartments couldn’t be flipped while landlords received the tax break. Clipper Equity even asked the U.S. Supreme Court to weigh in on the issue, but the court declined in January to take up the case.

Last year, the state’s highest court — in a case that addressed claims at both 90 West and Clipper’s 50 Murray Street — ruled that apartments should remain rent-stabilized through the life of 421g benefits. That decision still stands, but the court left open the question of how rent owed to tenants of deregulated units should be calculated.

Friday’s ruling marks the latest win tied to Regina. A Manhattan judge recently denied class action status in an overcharge case related to the J-51 program. The judge in that case wrote in her decision that tenants couldn’t rely on the HSTPA to strengthen their claims, due to the April Appeals Court decision.

Write to Kathryn Brenzel at [email protected]


Related Articles

arrow_forward_ios
The building is near Herald Square and Penn Station. (Google Maps)
NYC sues Garment District landlord over tenant’s alleged prostitution activity
NYC sues Garment District landlord over tenant’s alleged prostitution activity
Photo composite of Gov. Andrew Cuomo (Getty Images/Illustration by Kevin Rebong for The Real Deal)
Cuomo to ease Covid restrictions, but not on indoor dining
Cuomo to ease Covid restrictions, but not on indoor dining
Beny Steinmetz (Getty)
Beny Steinmetz sentenced to five years in bribery scandal
Beny Steinmetz sentenced to five years in bribery scandal
From left: Ben Ashkenazy, 1991 Broadway, 2067 Broadway and Samuel Gindi (Getty; Google Maps)
Ben Ashkenazy threatened to “go nuclear” on Century 21 family: lawsuit
Ben Ashkenazy threatened to “go nuclear” on Century 21 family: lawsuit
From left: Letitia James, Raphael Toledano and Josh Zegen with 223 East 5th Street and 325 East 12th Street (Getty, Google Maps)
Madison Realty Capital to give Toledano tenants $1M in rent credits
Madison Realty Capital to give Toledano tenants $1M in rent credits
Peter Nygård (Getty)
Retail magnate Peter Nygard hit with sex-trafficking indictment
Retail magnate Peter Nygard hit with sex-trafficking indictment
JDS Development's Michael Stern and 111 West 57th Street (JDS)
JDS sues 111 West 57th contractor, insurer over shoddy work and “blunderbuss requests”
JDS sues 111 West 57th contractor, insurer over shoddy work and “blunderbuss requests”
The Mark's outdoor tent covering Zadig et Voltaire's storefront at East 77th St
Restaurant, luxury retailer duke it out for sidewalk space: lawsuit
Restaurant, luxury retailer duke it out for sidewalk space: lawsuit
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...