On April 10, 2013, Bernstein Liebhard LLP, serving as co-lead counsel for thousands of affected tenants of the Stuyvesant Town and Peter Cooper Village rental apartment complexes in New York City achieved final approval on the largest tenant settlement in United States history. The settlement sets aside $68.75 million to compensate class members for rent overcharges from January 22, 2003 through December 31, 2011. This cash component, coupled with an additional estimated savings of $105 million in rent since 2009 under a negotiated interim settlement, brings the total economic benefit received to date by the tenant class to $173.25 million. Moreover, depending on future vacancy rates and market conditions, the tenants could save as much as an additional $300 million by the time their 2020 leases expire. The settlement also continues rent stabilization through June 2020 for each of the 4,311 formerly decontrolled Stuyvesant Town and Peter Cooper Village apartments at issue in the suit.
The action, first filed in 2007, asserted that for many years, landlords have illegally charged market rate rents for apartments that should have been rent stabilized under New York City’s Rent Stabilization Law, thereby overcharging each affected tenant thousands of dollars per year. The core legal issue was whether landlords could permissibly deregulate and charge market rents for certain “luxury” apartment units in these complexes in years in which the landlords were simultaneously receiving New York City tax abatements, known as “J-51” benefits.
The case was litigated for over six years and required the plaintiffs to prevail at both the New York Appellate Division and New York Court of Appeals levels. The Court of Appeals’ opinion is routinely touted as a landmark decision in the annals of New York real estate law as it definitively held that the New York statutory scheme prevented landlords of rent stabilized buildings from charging market rents while receiving J-51 benefits for as long as they continue to receive those tax benefits. The decision is reported at Roberts v. Tishman Speyer Properties, L.P., 13 N.Y.3d 270 (2010).
For more information please contact Dana S. Smith at (212) 779-1414.