Rent Overcharge Calculation Must Be Revised to Reflect Regina Decision

Current and former tenants sued landlord  in 2009 for improper deregulation and rent overcharge in several consolidated class action cases. Various apartments had been deregulated starting in 1993 although the building complex received J-51 tax benefits starting in July 2003. Ninety-five apartments were deregulated before 2003, and landlord continued to deregulate more units after 2003. In 2009, the Court of Appeals decision in Roberts v. Tishman Speyer Props. established that deregulation while receiving J-51 tax benefits was improper. 

During the course of the Dugan litigation, the court set a methodology for calculating the legal rents and amounts of rent overcharge. Both tenants and landlord raised various challenges to the court's methodology. In late 2019, the court relied on rent stabilization law amendments made by HSTPA effective June 14, 2019, to direct the methodology to be used.

But, in Regina Metropolitan Co LLC v. DHCR, New York's highest court ruled in April 2020 that certain HSTPA amendments to rent overcharge rules couldn't be applied retroactively. So the appeals court now vacated that part of the lower court's order setting forth the methodology for calculating the legal rents and the amount of any overcharges, and sent the case back for the court to set forth a methodology consistent with the Rent Stabilization Law as interpreted by the Regina court. 

Dugan v. London Terrace Gardens, LP: Index Nos. 603458/09, 8719, 2020 NY Slip Op 04239 (App. Div. 1 Dept.; 7/23/20; Richter, JP, Gische, Kern, Oing, Moulton, JJ)