Rent overcharge cases pile up

Stakes higher than ever after new rent law greatly increased potential damages

Rent overcharge claims against landlords are on the rise (Credit: iStock)
Rent overcharge claims against New York landlords are on the rise (Credit: iStock)

At least two dozen rent overcharge cases have been brought in the five boroughs since June 2019, according to an analysis by The Real Deal, and many more could be on the way.

The onslaught of recent cases, according to landlord attorneys, is spurred by the potential for a greater payday as changes to the state’s rent law last year greatly increased the possible judgments. The legislature extended the period for assessed damages to six years from four, tacked on treble damages and let tenants recover attorney’s fees from landlords.

In addition, a decision from the Court of Appeals, the highest court in the state, on whether to apply the 2019 rent law to pending cases could lead to many more such cases coming back from the dead, landlord attorneys say.

An unfavorable ruling would allow for the revival of “hundreds, if not thousands” of claims previously dismissed or decided, according to Nativ Winiarsky of Kucker Marino Winiarsky & Bittens, who argued the matter before the Court of Appeals Tuesday.

“It would open up the floodgates and instigate countless further litigation with potentially massive exposure,” Winiarsky said. “It would be calamitous.”

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Sam Himmelstein, an attorney at tenant firm Himmelstein, McConnell, Gribben, Donoghue & Joseph, said that overcharge cases are “pouring in” to his firm, and that landlords are eager to settle cases early now that potential penalties are much greater. He hopes overcharge lawsuits offset the decrease in other cases triggered by the new law, notably eviction, succession and non-primary-residence cases.

Lucas Ferrara, an attorney representing tenants in several ongoing rent overcharge cases, said the new law sought to “level the playing field” by keeping landlords from continuing to benefit from “illegally-established” rents.

The tenant attorney for an ongoing overcharge case against the Scharfman Organization, Robert Grimble, said his firm has also seen an increase in overcharge cases since June.

“Some cases that were not worth pursuing are now worth pursuing,” Grimble said, noting that the new statute allows courts to look back indefinitely to find the last proper registered rent upon which to calculate damages. “I’m eagerly awaiting the decisions [from the Court of Appeals].”