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Q & A: On New York Rent Ruling

By: Josh Barbanel

October 23rd, 2009

When the New York State Court of Appeals overturned some rent rules in place for more than nine years on Thursday, the decision opened a window for many market-rate New York City tenants, including some paying some of the highest rents in the country, to roll back rents and get the protections of the state government’s rent regulation system. Here are some questions and answers about the decision.

Q: What did the ruling say?

A: Landlords in rent-regulated buildings who received property tax abatements acted improperly when they deregulated apartments under state laws that allow for deregulation when the legal regulated rents rose above $2,000, according to the court decision. In 2000, the state’s Division of Housing and Community Renewal found that these owners could deregulate apartments. The case was brought by tenants at the Peter Cooper Village and Stuyvesant Town complexes in Manhattan.

Q: How many apartments are affected?

A: As many as 80,000 market-rate tenants, mostly in Manhattan, may be affected by the decision. These tenants live in apartments in previously regulated buildings that received a tax abatement, known as J-51, intended to encourage owners to invest in their buildings. It is not yet clear whether tenants who have already moved out of apartments will be eligible for refunds for past overcharges.

Q: How do I know if my apartment is eligible for a rent reduction?

A: First check the history of your building’s participation in the city’s J-51 program by going through lists of J-51 buildings posted on the city’s Department of Finance Web site. If you know your building’s block and lot numbers, a quicker search is available. If the building has a J-51 tax break, check with the state’s Division of Housing and Community Renewal to confirm that the apartment was once regulated. Tenants can request a printout of an apartment’s rent history going back to 1984 at a state housing rent office, but they must show identification and a copy of the lease or a rent bill. Tenants can call local offices and request the rent history, which will be mailed to the apartment address.

Q: What would the reduced rent be?

A: It is not yet clear how the reduced rent would be calculated. David E. Frazer, a tenant lawyer, said the rent could be based on the legal rent at the time the apartment was deregulated, plus any annual rent increases, and any additional increases permitted when an apartment became vacant in the past.
But state rules, also under challenge in the courts, generally limit “lookbacks” to what the rent was four years before a complaint is filed, even if that rent is above $2,000. So an apartment could become rent-stabilized again with a rent well above $2,000. But the tenant would be eligible for protections like limited annual increases and guaranteed lease renewals.

Q: How much of a refund of back rent might I be eligible for?

A: The Court of Appeals left it to the lower courts to determine whether the decision would be applied retroactively, and this could take years of court hearings and legal maneuvering. “Tenants think they won the lottery,” said Adam Leitman Bailey, a lawyer who represents both tenants and landlords, “but it might not turn out that way.” Refunds, if paid, would include interest.

Q: How do I go about getting my rent reduced?

A: The state’s housing agency is advising tenants who believe they are entitled to a reduced rent, and possible refund, to file an overcharge complaint at a state rent office, though Nancy Peters, a spokeswoman for the agency, said many questions had not been resolved by the courts. Tenants can also sue their landlords in state court, and might want to join with other tenants in their building and hire a lawyer.


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