Court of Appeals Rules Part F of the Housing Stability and Tenant Protection Act of 2019 May Not be Applied Retroactively in Rent Overcharge Cases
For Immediate Release
Shea Communications, LLC
George Shea, Mark Faris (212) 627-5766
Rosenberg & Estis, P.C. successfully represented building owner Belnord Partners LLC in a dispute over whether the Housing Stability and Tenant Protection Act of 2019 can be applied retroactively to revive, or expand recovery on, a previously asserted rent overcharge claim. The State of New York Court of Appeals ruled that Part F of the HSTPA may not be applied retroactively, and instead, overcharge claims must be resolved under the law in effect at the time the overcharges occurred. The Court definitively held that, under the prior law, an overcharge is calculated using the rent charged four years prior to the filing of a complaint, plus any legal increases applicable during the four-year lookback period, except in limited circumstances of fraud.
Rosenberg & Estis‘ Deborah E. Riegel, member, and Ethan R. Cohen, of counsel, represented Belnord Partners LLC before Chief Judge Janet DiFiore in the State of New York Court of Appeals. On appeal to the Court of Appeals, their client’s case was combined with three other J-51 rent overcharge lawsuits, with the other landlords – Regina Metro, W7879 LLC and 72A Realty Associates L.P. – being represented by other law firms.
Reich and Brimberg were tenants in the Belnord when the Court of Appeals previously decided the Roberts case involving Stuyvesant Town. Notwithstanding that decision, Reich and Brimberg failed to assert any claim of overcharge for over six years after being put on notice of its possible effect by Belnord. After the Appellate Division affirmed the dismissal of their claims, the HSTPA was enacted, as a consequence of which, the Court of Appeals sought supplemental briefing from Belnord, as well as the landlords in Regina Metro, Raden and Taylor. In each case, the tenants attempted to apply the HSTPA’s new provisions to the pending appeals, which would have revived the claims by Reich and Brimberg and expanded all of the tenants’ recovery for rent overcharge.
“The Court of Appeals handed down a fair and extraordinarily thoughtful decision that will have a tremendous impact across the real estate industry,” said Riegel. “A ruling against the owners’ would have been catastrophic, retroactively subjecting them to large overcharge claims. The majority expressly agreed with our argument that the HSTPA does not apply to claims which were already time barred at the time of its enactment, and ruled that, to the extent they were not already time barred, retroactively applying Part F of the HSTPA would be a violation of the owners’ substantive due process rights. The Court recognized that the policies implemented by the HSTPA are within the Legislature’s province, but only on a prospective basis.”