NEW YORK CITY-The New York State Appeals Court affirmed a lower court ruling that Metropolitan Insurance and Annuity Co. and Metropolitan Tower Life Insurance Co., the former owners of Stuyvesant Town and Peter Cooper Village, must pay damages for improperly raising rents on tenants. The decision confirms Judge Richard B. Lowe III’s Court of Appeals’ landmark ruling in Roberts v. Tishman Speyer, which barred rent deregulation for an apartment in a building receiving J-51 benefits.
Alexander H. Schmidt, of Wolf Haldenstein Adler Freeman & Herz LLP, who represented the plaintiffs in the case, tells GlobeSt.com that the decision “was clearly a victory” for the plaintiffs because it ensures that they will be entitled to recovered damages for rent overcharges. “Justice continues to be done in this case,” he says.
In the January 2007 complaint, plaintiffs contended they represented a class of “all persons who are, or were, or become, residential tenants of Stuyvesant Town and Peter Cooper Village who have signed or will sign a market lease or any lease other than a rent-stabilized lease for any period during which defendants (and any successors or assigns) were receiving or are scheduled to receive real estate tax benefits under New York City’s J-51 program,” according to the order.
The plaintiffs sought a declaration that Stuyvesant Town and Peter Cooper Village remain subject to rent stabilization as long as defendants receive J-51 tax benefits, the order says. Plaintiffs also sought the difference between their rents and rent-stabilized rents for the four-year period preceding the commencement of their action, according to the order. They estimated their damages at not less than $215 million.
Attorneys for the then-current ownership, a joint venture of Tishman Speyer and BlackRock Realty, and former owner MetLife, which sold the 11,200-unit Manhattan apartment complex for $5.4 billion in October 2006, argued in 2009 that their timetable of deregulating rent-stabilized apartments was in accordance with state law, GlobeSt.com previously reported. 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.
Bruce E. Yannett, of Debevoise & Plimpton LLP, who represented MetLife on the case, did not return a phone call to GlobeSt.com in-time for deadline for this article.
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