What is the current status of the Roberts litigation?
What are my rights if I am up for renewal during this “interim settlement period”?
How was this “Estimated Rent-Stabilized Rent” determined?
What will happen if my final rent-stabilized rent is determined to be higher than what I am paying at that time?
What is the status of the recalculation of the affected unit’s actual rent-stabilized rents?
What would be the impact of the bill proposed by Governor Paterson on May 26 to address the Roberts ruling?
What are the potential affects of a bankruptcy by the entity that owns the complex?
Will moving out of the complex affect any of my rights in this case?
Will moving to a new apartment in the complex affect any of my rights in this case?
Will tenants be able to receive retroactive damages for overcharges prior to the Appellate Division’s decision in March 2009?
When will tenants have their escrowed funds returned to them?
I am a former tenant, how does this extension of the interim settlement agreement affect me?
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What is the current status of the Roberts litigation?
On December 14, 2009, Justice Lowe of the New York State Supreme Court approved an agreement between the attorneys for the named plaintiff tenants of the Roberts case and the attorneys for the current and former landlords and their lenders.
The agreement had three key facets:
- First, the parties agreed to stay the litigation for a period of up to six months in order to work through the significant issues at hand.
- Second, the rent bills for each apartment affected by the Court of Appeals decision were to be set at the lower of (i) the current lease rent or (ii) the estimated rent-stabilized level that Tishman calculated for escrow purposes last March.
- During the period of the stay, each affected tenant is to be afforded certain rights available under the Rent Stabilization Law, including the right of renewal and succession rights.
This agreement is being extended for an additional six months until December 31, 2010 in order to assure that tenants will continue to pay no more than the estimated rent-stabilized rent and maintain the automatic right of renewal and succession rights.
What are my rights if I am up for renewal during this “interim settlement period”?
The attorneys for the plaintiffs have worked with the owner’s attorneys to assure that the renewal leases and riders will not affect your rights under the Roberts case. While the renewal leases are in the form of a market lease, the attached “J-51 rider” supersedes the actual lease, and provides for the following: Under the terms of the extended interim settlement agreement each tenant has a right to a renewal lease at a rent of the lower of either (a) the unit’s estimated rent-stabilized rent at the time of the renewal plus the annual increase allowed by the Rent Guidelines Board (“RGB”), or (b) the actual rent each tenant was paying prior to renewal, plus the RGB increase. This is merely the maximum that the owner may charge, so you should attempt to negotiate for the lowest rent possible as the landlord has discretion to offer you a lower rent than the rent stabilization law allows.
Prior to the extension of the interim settlement agreement tenants who renewed were incorrectly charged the lower of either (a) the unit’s estimated rent-stabilized rent at the time of the renewal plus the annual increase allowed by the Rent Guidelines Board (“RGB”), or (b) the lease rent each tenant was paying prior to renewal, plus the RGB increase. In other words, if your lease stated that your rent was $3,000, but you only paid $2,500 a month due to receiving two free months of rent, your renewal rent was calculated based on the lease rent of $3,000, not your actual out of pocket rent of $2,500.
If you are a tenant who has signed a renewal lease under the prior, incorrect formula during the interim settlement period (meaning if you were charged a renewal rent that was more than a 3% increase over your prior rent for a one-year renewal lease or 6% for a two-year renewal lease) Tishman will be contacting you to offer you a new renewal lease rider stating the correct rent amount, and will also reimburse you for any difference as a credit to a future rent bill. If you have further questions on this issue please contact Michael Liskow, an attorney for the class members, at liskow at whafh dot com.
Tenants also will be provided with 60 days from the date of the receipt of the renewal lease to determine whether they wish to renew.
How was this “Estimated Rent-Stabilized Rent” determined?
The estimated rent-stabilized rent was tentatively calculated by Tishman Speyer.
The formula used involves taking the last stabilized rent for an apartment, and then adding a number of allowable increases to reach the estimated amount. These increases include an 18-20% increase for the initial vacancy by the last rent stabilized tenant, and an additional “long-term vacancy” increase of 0.6% per year IF the last rent-stabilized tenant occupied the apartment for more than eight years. In addition, Tishman and Met Life added 1/40th of any claimed renovations done to the apartment. Finally, the owner has added one annual increase as allowed by the Rent Guidelines Board for each year since the apartment was deregulated.
We believe that this formula was sufficient for determining the escrowed amounts as well as the interim estimated rent-stabilized rent. But we emphasize it is only an estimate and the real rent-stabilized rents, once finally calculated, could be higher or lower than the estimated rents.
What will happen if my final rent-stabilized rent is determined to be higher than what I am paying at that time?
If your ultimate rent-stabilized rent is determined to be higher than what you are paying at that time, you will be allowed to continue to pay your lower amount until the end of your lease term. At that point, the building owner will have the right to raise your rent to the new rent-stabilized rent plus any allowable Rent Guidelines Board annual increases. However, depending on market conditions, the owner may also choose to offer you a lower “preferential” rent, so always try to negotiate the lowest rent possible.
What is the status of the recalculation of the affected unit’s actual rent-stabilized rents?
The parties have retained the services of a neutral consultant, a well-respected accounting firm, to gather and analyze the historical data for each affected apartment in order to determine the legal rent for each unit, and to calculate the amount of any past tenant overcharges. This is an enormous task, and we hope to have it completed by the end of July. With this information we hope to be able to quickly move towards a settlement. The class attorneys believe the neutral consultant is doing an excellent job scrutinizing the records to determine the correct legal rents for each apartment.
What would be the impact of the bill proposed by Governor Paterson on May 26 to address the Roberts ruling?
Class action counsel believe the proposed legislation would have no impact on the case at all. The provisions setting the October 22, 2005 base date for rent recalculation and the statute of limitations provisions should not apply to any already pending litigation. If the bill finds sponsors in the Assembly or Senate and is presented, the lawyers will monitor the progress of the bill, including any proposed amendments to it, and will reevaluate the bill’s impact on the Roberts litigation if it passes based on its final approved form and update this answer if necessary.
What are the potential affects of a bankruptcy by the entity that owns the complex?
Our attorneys believe that in the event of a bankruptcy by the controlling owner of the complex each eligible tenant would still be entitled to damages from past overcharges as such legal claims for rent overcharges would become the obligation of any future owner of the property. However, some of Tishman’s investors have taken the position that the claims of former tenants, unlike the claims of current tenants, could be extinguished altogether in a bankruptcy. While we disagree, the law may not be clear on this issue, so moving out of the complex does pose some degree of risk (again, class counsel believe it is small) that you may lose your claim for past overcharges. We cannot advise you in determining whether you should take this risk; if you would like legal advice on this issue you should hire your own attorney.
It is also important to note that any overcharges occurring within the statute of limitations period while MetLife was the owner of the complex, approximately January 2003 until December 2006, would likely be unaffected by a Tishman bankruptcy because MetLife would still be liable for such claims.
Will moving out of the complex affect any of my rights in this case?
Please see the prior FAQ above for an explanation as to how moving out of the complex may affect your claims for past overcharges.
Will moving to a new apartment in the complex affect any of my rights in this case?
Moving to a new apartment within the complex implicates a number of potential issues. First, when a vacant unit in the complex is rented to a new tenant during this interim settlement period the owner may try to increase the unit’s estimated rent-stabilized rent by 20%, as allowed for vacancy leases under the Rent Stabilization Law. Moreover, the ultimate legal rents for such units will likely include this 20% vacancy increase. Because of this, these newly available apartments will likely be calculated to have a higher rent-stabilized rent, on average, then units that current tenants have not yet vacated. You should therefore ask the owner for the estimated rent-stabilized rents for both your current and future apartments in order to assess the potential risks and benefits of making such a move.
Second, in the event of a bankruptcy by the controlling owner of the complex, tenants who have moved to a different unit in the complex may be deemed to be “former tenants” with respect to past damages for overcharges at their prior apartment in the same manner as tenants who have left the complex altogether. We do not believe this is likely but, as stated two FAQs prior, tenants should take this possibility into account when deciding whether to move within the complex.
Finally, the Tenants Association has posted a bulletin on the possibility of newly rented apartments losing their rent-stabilized status at the end of the J-51 period, which we recommend the tenants review before moving within the complex:
<http://www.stpcvta.org/ta/post/alert_theres_a_catch_to_the_100_vacant_apartments_offer/>
Will tenants be able to receive retroactive damages for overcharges prior to the Appellate Division’s decision in March 2009?
The issue of whether tenants should receive retroactive damages for overcharges prior to March 2009 was left open by the Court of Appeals in the Roberts decision. The MetLife defendants have moved to dismiss the plaintiffs’ complaint as to them on the ground that tenants are not due retroactive damages. This issue has been briefed by both parties and Judge Lowe will hear oral argument on the matter in June. We believe the plaintiffs’ legal position is very strong, and have great confidence that the tenants will ultimately prevail in securing retroactive damages.
When will tenants have their escrowed funds returned to them?
Tishman has already refunded the escrowed funds that tenants paid in November and December 2009. For current tenants this amount was credited to their March 2010 bill. If you are no longer at the complex but you had funds escrowed in November or December, you should have received a check from Tishman. This sum may have been added to any reimbursement for a security deposit that you received. If you believe you should receive a check but have not before June 15, 2010, you should contact the Stuyvesant Town leasing office.
Tishman and its lenders have taken the position that the remainder of the escrow account should not be reimbursed because the Court of Appeals left open the question whether its decision in favor of the tenants should be retroactively applied. Tishman argues that if the lower courts rule it should not be applied retroactively then Tishman is entitled to the escrowed funds. We of course vigorously disagree with that contention, but until the issue is resolved by a court or by agreement the escrow agent holding the funds will not release them without Tishman’s approval. We continue to work to obtain the full amount of escrowed funds for the tenants.
I am a former tenant, how does this extension of the interim settlement agreement affect me?
This agreement does not affect you at this time. We will continue to work to assess the amount of overcharges that former tenants may have paid. We ask that all former tenants if they have not yet done so email their current contact information including mailing address, the address or addresses they lived at in the complex, and the approximate dates they were there to Michael Liskow at liskow at whafh dot com. This information will allow the class attorneys to contact the former tenants quickly in the event of a settlement or other important case developments.
