Court Retroactively Applies HSTPA Amendments to Pending Overcharge and Choice of Forum Claims

Tenants of 55 different apartments in 22 buildings owned or operated by landlord sued landlord in 2016 and claimed that landlord pursued a scheme designed to unlawfully inflate rents in violation of the Rent Stabilization Law. Tenants also sought class action status. Landlord asked the court to dismiss tenants' claims.

The court ruled for landlord in part but denied other portions of its request. The court found that retroactive application of the Housing Stability and Tenant Protection Act (HSTPA) amendments to the Rent Stabilization Law, permitting expansion of rent history review and the statute of limitations to six years, was not unconstitutional. Due process rights weren't impaired, there was no contracts clause violation since overcharge claims are created by statute and not by contract, and an appeals court had already ruled that the retroactive provisions didn't violate the Fifth Amendment takings clause.

Landlord also argued that tenants' rent overcharge claims should be submitted to the primary jurisdiction of the DHCR. But it's well established that the court can address tenants' claims, and HSTPA recently reinforced the principle that tenants had a "choice of forum." Given a pending appeal before New York's highest court on class action issues, it was premature to consider landlord's request to dismiss tenants' class action claim.

The court granted landlord's request to dismiss tenants' claim that landlord violated General Business Law Section 349 concerning deceptive acts or business practices, since that law concerned consumer-oriented matters and tenants failed to allege deceptive acts or practices distinct from landlord's claimed violations of the rent laws. The court also granted landlord's request to dismiss tenants' claims based on illegality and mistake of contract since there was no claim of a breach of any express or implied contractual obligation. Finally, the court dismissed claims made against two individuals who were principals of the landlord entity since there were no specific allegations against them.

Stafford v. A&E Real Estate Holdings, LLC: 2019 NY Slip Op 33039(U) (Sup. Ct. NY; 10/11/19; Cohen, J)