Among the many amendments made to New York’s rent stabilization laws by the Housing Stability and Tenant Protection Act of 2019 (HSTPA) were new provisions making attorney’s fees mandatory for tenants represented by counsel who make successful rent overcharge claims. At the same time, there is no provision in the amended laws for an owner to recover attorney’s fees in the event that it successfully defends against an overcharge claim.
In a second decision concerning rent overcharge issued on April 2, 2020, New York’s highest court ruled that rent-stabilized tenants were entitled to bring overcharge claims against building owners either before the NY State Division of Housing and Community Renewal (DHCR) or before a court.
On April 2, 2020, New York’s highest court issued an important set of decisions in four consolidated cases concerning rent overcharge of rent-stabilized tenants. Here, in Regina Metropolitan Co., LLC v. DHCR et seq., the Court of Appeals had been asked to decide the proper method for calculating the recoverable rent overcharge for NYC apartments that were improperly removed from rent stabilization during receipt of J-51 tax benefits. This issue had come up repeatedly since the Court’s 2009 Roberts v. Tishman Speyer Properties ruling. In many cases following Roberts, the DHCR and court decisions had been both conflicting and confusing as to how overcharges should be calculated. And, by the time the four cases in question reached the Court of Appeals, additional questions were presented concerning the effect of the Housing Stability and Tenant Protection Act of 2019 (HSTPA) on any further rulings.
With the June 2019 passage of the Housing Stability and Tenant Protection Act (HSTPA), owners are desperately seeking ways out of rent regulation in an attempt to recapture the profitability their buildings previously had. Two such exit strategies are “substantial rehabilitation,” available only to deteriorated buildings, and “demolition,” generally available to rent-stabilized buildings regardless of their condition.