Four hundred current and former tenants at Lenox Terrace, a legendary Harlem six building housing complex last week received rent refunds of over $1.1 million in settlement of a 10-year old J-51 class action, Downing v. Lenox Terrace.
Class members also received rent reductions as high as hundreds of dollars a month, rent-stabilization status and over $250,000.00 in credits against past rent due.
“It was so important to finally get refunds to tenants, especially at this time when so many are facing economic hardship,” said HMGDJ partner David Hershey-Webb who litigated the case and negotiated the settlement along with class action attorney Matthew Brinckerhoff of Emery, Celli, Brinckerhoff, Abady, Ward and Maazel LLP. The rent refunds ranged from a few thousand dollars to tens of thousands of dollars.
The Lenox Terrace Class Action was filed in 2010 after the Court of Appeals Roberts decision which held that owners could not deregulate rent-stabilized apartments while receiving J-51 tax benefits. At the time the suit was commenced, HMGDJ had represented the Lenox Terrace Association of Concerned Tenants (LC-ACT) for many years and LC-ACT was instrumental in making the class action victory possible.
Tens of thousands of rent-stabilized apartments were unlawfully deregulated between 1998 through 2010 due to a misinterpretation of the law by New York State Division of Housing and Community Renewal, including hundreds of apartments at Lenox Terrace. Tenants in deregulated units paid rents far in excess of the proper legal rents and lost the right to caps on rent increases and renewal leases. Landlords throughout the city were able to keep millions of dollars in overcharges, with most tenants never seeing refunds. HMGDJ stepped in immediately after the Roberts decision and filed numerous suits to recover refunds and compel landlords to put apartments back into rent-stabilization.
Recently the Court of Appeals, in the Regina case severely limited and in many cases barred tenants from obtaining J-51 overcharges in the future. The result of Regina is that owners will now be able to keep J-51 overcharges and also will be able to continue charging rents that were inflated when apartments were unlawfully deregulated.
“It’s a good thing that we filed our class action right after Roberts was decided and were able to recover most of the overcharges, get the apartments put back into rent-stabilization and get rents reduced. Many tenants, especially in light of Regina, will never be compensated, unless the State Legislature can repair the damage done by the court” said Hershey-Webb.
HMGDJ filed five class action lawsuits in response to the Roberts decision. Downing v. Lenox is the first one to be settled. Unlike in the Roberts settlement, there was no agreement in the Lenox settlement that apartments go out of rent-stabilization once the J-51 benefits expire and tenants vacate. “These apartments should remain rent-stabilized as long as there is rent-stabilization” said Hershey-Webb.