Rent-regulation settlement against Pinnacle may be at risk

441 Convent Avenue, a Pinnacle-owned building
441 Convent Avenue, a Pinnacle-owned building

A major rent-regulation settlement may be in jeopardy after a number of tenants complained that they were ineligible for millions of dollars in compensation from landlord Pinnacle Group, the New York Times reported.

On Monday, the tenants asked a Manhattan federal appeals court to overturn the class-action lawsuit settlement against Pinnacle, which was originally brought over allegations of rent overcharges and harassment. The original suit was brought against Pinnacle – an aggressive player in the rent-regulated market — and its principal owner Joel Wiener in 2007. The tenants alleged that that the company illegally inflated rents and “systematically” harassed them to move in order to secure higher rents. 

The tenants’ new team of lawyers said the settlement keeps 77 percent of the 22,000 tenants in Pinnacle buildings from receiving compensation from the landlord, and that Pinnacle should be liable for much more than it is required to pay.

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A lawyer for Pinnacle, Mitchell Karlan, told the Times that the settlement had been “fair and reasonable,” and added: “We expect that the settlement will be approved just as it was.”

And Richard Levy, who negotiated the original class-action settlement for the tenants, told the Times that fewer than 1 percent of the plaintiffs were opposed to the original deal. The exclusions in the settlement, Levy said, were justified as they dealt with claims that either exceeded the statute of limitations or those that were a result of bad conduct of other landlords.

“It is very sad,” Levy said of the appeal. “All they have done here is delay the relief for the 22,000 plaintiffs.” [NYT]Hiten Samtani