Tenants Sue Owner for Allegedly Illegally Deregulating Apartments

A group of tenants on the Upper West Side filed a lawsuit recently claiming that the owner failed to provide documentation to justify rent increases that ultimately deregulated their apartments. According to the lawsuit, based on the recent rent registrations filed for these apartments, the owner would’ve needed to pay $46,852 to $84,909 on each apartment to justify deregulating the units.

The new law, the Housing Stability and Tenant Protection Act of 2019, enacted June 14, may help the plaintiffs. The act specifies that the amended rent overcharge provisions apply to any claims pending or filed with the DHCR or a court on and after June 14, 2019. The act also extends the statute of limitations for overcharge from four to six years before an overcharge claim is made, effectively requiring owners to maintain records on improvements to rent-stabilized apartments for at least six years prior to the most recent rent registration filed with the state. The act also significantly increases owners’ exposure to hefty legal damages, stipulating that tenants could collect three times the amount of rent overcharged for six years prior to filing a complaint.

Additionally, the law lowers the threshold for bringing rent overcharge claims against landlords by specifically allowing tenants to question “unexplained” rent increases. Under prior law, the courts carved out several exceptions to the look-back rule, including instances when a tenant alleged fraud, but the four-year cut off for review of rent history to determine rent overcharge was the general rule. The new law states that the DHCR or the court shall consider all available rent history reasonably necessary to make a decision as to whether an apartment was illegally deregulated.