Appeals Court Reopens Overcharge Claims by Tenants in J-51 Building

Tenants in a building that received J-51 tax benefits sued landlord. Tenants, who were certified as a class by the court, said they never received rent-stabilized leases from landlord, and claimed that they were entitled to have their rents retroactively set by the default formula provided under Rent Stabilization Code Section 2526.1. The lead tenant asked the court to rule in his favor without a trial, and to dismiss landlord's defenses and counterclaims. The court ruled for tenant (LVT #31480), finding that an overcharge should be calculated using the default formula.  

Landord appealed, and the case was reopened. The appeals court found that, because tenant didn't submit a sworn statement in support of his claim, he didn't demonstrate an increase in rent or that landlord had misrepresented the legal regulated rent. The court also reinstated some of the defenses that landlord had interposed but that were dismissed by the lower court. Landlord claimed that the DHCR's TPU had determined tenant's rent should be reinstated since it may provide a defense to tenant's fraud claims in connection with deregulation or overcharge. Landlord's defense that tenants' claims fail to state a cause of action was also reinstated. 

Tribbs v. 326-338 E 100th LLC: Index No. 150179/18, App. No. 17536, Case No. 2022-00965, 2023 NY Slip Op 01950 (App. Div. 1 Dept.; 4/13/23; Kapnick, JP, Kern, Gesmer, Moulton, Higgitt, JJ)