Tenant Can Amend Complaint a Second Time Based on Regina

Rent-stabilized tenant sued landlord for rent overcharge based on improper deregulation of his apartment while the building was receiving J-51 tax benefits. While tenant's complaint was pending, the rent stabilization law was amended by the Housing Stability and Tenant Protection Act of 2019 (HSTPA) to increase the overcharge lookback period from four years to at least six years. Tenant asked the court for permission to amend its complaint against landlord so that the overcharge claim was based on the amended law. The court ruled for tenant.

Later, after New York's highest court struck down the retroactive application of the HSTPA expansion of the overcharge lookback period, tenant asked the court for permission to again amend his complaint so that it complied with the April 2020 court decision in Regina Metropolitan Co. LLC v. DHCR. Landlord objected, arguing that tenant knew the Regina appeal was pending when his complaint was amended the first time, and therefore tenant acted in bad faith.

The court ruled for tenant. There was no proof that tenant acted in bad faith to amend his complaint the first time. If tenant ultimately was the prevailing party and sought attorneys' fees at the end of the case, landlord could raise the question then as to whether tenant should get attorney's fees in connection with this second amendment to the complaint.

Hess v. EDR Assets LLC: Index No. 160494/2017, 2020 NY Slip Op 32079(U)(Sup. Ct. NY; 6/26/20; Nervo, J)