Chelsea Tenants Can Proceed in Class Action Lawsuit

Recently, a judge ruled that tenants of a 921-unit rental building in Chelsea can proceed with a lawsuit alleging illegal rent hikes related to a tax abatement program as a class action. The case involved the same issues at the heart of the Stuyvesant Town-Peter Cooper Village case, where tenants claimed that then-landlords Tishman Speyer and MetLife had deregulated apartments while taking tax breaks for apartment improvements, known as the J-51 program. An appeals court found in 2009 that this was illegal.

The owner stated it relied on a determination from the DHCR, which administers rent-control issues under J-51, that preceded the Stuy Town decision. The judge was not persuaded, however, saying the decision applies retroactively. “Defendant was not deprived of fair notice because it relied on DHCR’s faulty interpretation of a current statute, the plain text of which was readily available for defendant to read and interpret for itself,” the judge said.