Court Strikes Down Part of New York’s Rent Law
- Apr 03, 2020
In a win for landlords, New York’s Court of Appeals issued a decision yesterday effectively striking down part of the landmark rent reform law that was passed in the state last June.
The ruling centers on the statute of limitations tenants have when claiming rent overcharges. The court decided that Part F of the Housing Stability and Tenant Protection Act of 2019 cannot be applied retroactively and rent overcharge claims must be resolved under the law that was in effect at the time the overcharges occurred.
Under the prior law, an overcharge was calculated using the rent charged four years prior to the filing of a complaint, plus any legal increases that were applicable during the four-year lookback period, with the exception of limited circumstances of fraud.
When the law changed last year, it lifted the statute of limitations, a rent overcharge claim could be brought anytime and the four-year lookback period was eliminated.
READ ALSO: Amid Job Losses, Giving Renters a Hand
Judges Janet DiFiore, Leslie Stein, Michael Garcia and Paul Feinman of the New York Court of Appeals issued the decision on three combined rent overcharge lawsuits, one of which was represented by Deborah Siegel of Rosenberg & Estis, P.C.
“There was a vast amount of uncertainty that the new law created in terms of how you can evaluate your risk and how on a transactional basis you can evaluate potential exposure to rent overcharges,” Siegel told Multi-Housing News. “So, I think this goes a long way in sort of stabilizing and helping owners and lenders understand what the rules are and what the potential exposure is.”
Ruling Amid a Global Pandemic
It’s been 10 months since New York State legislators passed the Housing Stability and Tenant Protection Act of 2019, stunning the state’s real estate industry.
The ruling comes amid a global pandemic that has shut down businesses, schools and caused job losses across a wide swath of U.S. residents, which led 10 million people to file for unemployment in the last two weeks.
It also comes at a time when many renters will not be able to pay rent and landlords are bracing for losses in revenue as the week plays out. New York enacted a 90-day eviction moratorium on March 20, but officials have not yet said what will happen after it expires.
“Let’s see where we are after 90 days,” Governor Cuomo said in response to a question about what happens when the moratorium expires at a press conference this morning.
“So much of this is changing and fluid, I don’t think anyone can sit there and tell you what’s going to happen in 90 days. I just want to get to 90 days from now…then we’ll handle whatever we need to handle.”