Tenants Claim Unlawful Deregulation

Tenants of 1,000-unit building complex sued landlord in a class action, claiming that landlord unlawfully removed 30 percent of the apartments from rent stabilization through vacancy deregulation while landlord received J-51 tax benefits. Landlord began receiving J-51 benefits in 2003. Tenants asked the court to return the deregulated apartments to their prior regulated status and to rule that any pending "LD" applications before the DHCR to deregulate apartments were void and that any prior deregulation orders by the DHCR were void.
Landlord asked the court either to dismiss the case or to delay any decision while the matter was referred to the DHCR to determine whether individual apartments were subject to rent stabilization or rent control, whether tenants had been charged excessive rents, and what rent should have been charged for what past period and currently. Landlord argued that it wasn't responsible for retroactive rent overcharges.
The court didn't rule on retroactivity, but refused to dismiss or stay the case. The court had the authority to rule on the issues raised by tenants. The DHCR had no authority to decide some of the issues raised in the case, such as class action status. And sending the case to the DHCR would only cause further delay, to tenants' detriment. The court noted that, at some later point, it may be appropriate to refer the case to the DHCR to determine individual rent overcharge calculations.