Judge Says Landmark Stuy Town Ruling Applies Retroactively

A New York State appellate court ruling handed down recently may have broad implications for tenants across the city. In a decision that could benefit potentially thousands of New York City residents, the court held that a landmark 2009 ruling involving illegally deregulated apartments should be applied retroactively.

The tenants in this case were appealing a lower court's ruling that they could not challenge in 2009 the 1999 order deregulating their West Village apartment. At the time of the deregulation order by the Division of Housing and Community Renewal (DHCR), the owners of the Gerstens' apartment building were receiving a government tax break known as a J-51. The Gerstens challenged that order in 2009, after the New York Court of Appeals ruled in Roberts v. Tishman Speyer Properties that thousands of apartments in Manhattan's Peter Cooper Village and Stuyvesant Town complex were illegally removed from rent stabilization even as the complex's owners were receiving the J-51 abatement.

But the Court of Appeals' decision did not indicate whether it was retroactive, which would permit tenants to seek the return of many more years' worth of rent overcharges. The lack of clarity has led to repeated sparring between owners and tenants over the issue. In August 2010, a trial court judge handling the ongoing Roberts case held that the Court of Appeals ruling was retroactive, a decision that is the subject of the appeal in this case.

Writing for a unanimous panel in the present case, Justice Renwick held that because Roberts had not announced a new principle of law, it should be applied retroactively. Such a rule would “protect, where applicable, tenants from rent increases in excess of those allowed” by the Rent Stabilization Law, Renwick wrote. To hold otherwise, “would essentially allow landlords throughout the City to collect rent in excess of those allowed by the [Rent Stabilization Law] based upon a faulty statutory interpretation,” wrote Renwick.