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Rent overcharge case could determine how courts deal with new rent law

The judge ruled that new rent law only applies to pending or ongoing claims

Stonehenge NYC’s Ofer Yardeni and 400 East 58th Street (Credit: Stonehenge and Google Maps)
Stonehenge NYC’s Ofer Yardeni and 400 East 58th Street (Credit: Stonehenge and Google Maps)

One day before New York’s new rent law passed, a housing court judge threw out rent overcharge claims filed against a Sutton Place landlord. But when a tenant tried to revive the claims in light of the new law, the judge stuck by the initial decision.

Judge Frances Ortiz denied a motion filed by a tenant of 400 East 58th Street, finding that the Housing Stability and Tenant Protection Act of 2019 “relate[s] to claims pending or filed after the effective day of the statute,” which was signed into law June 14. The court dismissed claims that Ofer Yardeni’s Stonehenge Management illegally deregulated a stabilized apartment in the building on June 13.

The overcharge claims were filed in response to a November 2018 complaint filed by the landlord against tenant Samuel Herrnson, alleging failure to pay rent. Herrnson, who represented himself on the motion to renew the claim, couldn’t immediately be reached for comment.

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The HSTPA expanded the statute of limitations for illegal rent overcharge claims from four to six years and also stipulated that courts could review all available rent history deemed “reasonably necessary” to deliberate on such cases. Ortiz found, however, that the four-year rule should apply in Herrnson’s case, since the old rent law was in effect when the court ruled on his claims.

“It gives landlords and tenants some insight into how these cases will be decided retroactively,” said Rosenberg & Estis’ Neil Dwork, who represented the landlord. “If the decision has already been rendered on the overcharge, they are not going to reopen it.”

Landlords and real estate attorneys have speculated that the HSTPA will open the door for more overcharge claims in the coming year. There are a few incentives for pursuing such cases: Tenants can now collect three times the amount of rent overcharged for six years prior to filing a complaint.

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Rent Stabilization