Attorneys for the current ownership, a joint venture of Tishman Speyer Properties and BlackRock Realty, and former owner MetLife, which sold the 11,200-unit Manhattan apartment complex for $5.4 billion in October 2006, argued that their timetable of deregulating rent-stabilized apartments was in accordance with state law. However, the Court of Appeals ruled that the argument was a misreading of the Rent Regulation Reform Act, and that landlords cannot charge market-rate rents while also receiving J-51 benefits.

The ruling may leave Stuy-Town's owners liable for an estimated $200 million in rent overcharges and damages, according to the New York Times, and could expose other landlords to similar liability. A statement from Tishman Speyer says, "While we respect the Court's decision, we view this as an unfortunate outcome for New York. The ruling, which reverses 15 years of government practice, raises a number of difficult issues that will need to be resolved by the courts and various government agencies in the coming months and years."

The 4-2 Court of Appeals decision noted that Stuy-Town's owners, who may be on the verge of turning the complex over to a special servicer, predicted "dire financial consequences from our ruling, for themselves and the New York real estate industry generally." Pointing out that the predictions "may not come true" and depend on "issues yet to be decided," the court added, "That the courts and litigants may experience some additional burden, however, is no reason to eschew what we view as the only correct interpretation of the statute."