For the second year in a row, HMGJ is ending the year with a big win for tenants at the New York State Court of Appeals. The Court today held that several class actions can go forward on behalf of rent stabilized tenants who were overcharged while landlords were receiving J-51 tax benefits. HMGJ represents tenants at Lenox Terrace in Harlem, one of three cases considered by the Court. HMGJ also represents tenants in class actions at London Terrace in Chelsea, Clermont Terrace on the Upper East Side and in several other buildings who now have a green light to obtain rent refunds and rent reductions.

Landlords (the appellants) in the three cases heard by the Court had argued that the cases could not go forward as class actions because the rent overcharge provisions of the Rent Stabilization Law entitle tenants to treble damages where an overcharge is willful. Treble damages are considered a “penalty” and the class action statute prohibits bringing a class action to seek a mandatory penalty. The tenant class representatives (plaintiffs), however, had waived their entitlement to treble damages and argued that since the treble damages had been waived, the actions could go forward.

The Court agreed with Tenants. Given that the purpose of the class actions is to obtain the benefits of rent stabilization including rent refunds and rent reductions, the Court found it “ironic” that Landlords were arguing that the class actions should be dismissed because the Tenants were waiving benefits under the Rent Stabilization Law. The Court also noted that the benefits the Tenants were waiving (treble damages) would be next to impossible to get for overcharges collected before the “Roberts” decision was issued since the Landlords were following the DHCR policy at that time.

HMGJ partner David Hershey-Webb represents the tenants in the Lenox Terrace class action. HMGJ partner William Gribben and associate Ronald Languedoc also worked on the appeal. The case was argued by HMGJ class action counsel Matt Brinckerhoff of Emery, Celli, Brinckerhoff and Abady. At the end of last year, the Court ruled for tenants in another HMGJ case, Murphy v. DHCR.

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