Tenants Can Proceed with Overcharge Claims Based on Improper Rent Concessions

Tenants sued landlord, claiming that landlord improperly manipulated the initial legal regulated rents of apartments in a 421-a building by offering tenants rent concessions. The court denied landlord's motion to dismiss the claim without trial since questions of fact remained that would require a trial. Landlord appealed and lost. Landlord didn't refute tenant's claims that certain purported construction concessions were in fact not to reimburse tenants for inconveniences arising from the construction work but instead were part of a fraudulent scheme to register the initial rents charged at inflated amounts.

The appeals court also denied an appeal by tenants of the portion of the lower court's order concerning the base date for overcharge claims. The lower court ruled that the class period should commence on May 27, 2018, rather than May 27, 2016. The appeals court found that this was a correct determination based on the four-year statute of limitations under former CPLR 213-a, which applied to this case because rent overcharge claims accrued prior to enactment of the HSTPA on June 14, 2019.

Wise v. 1614 Madison Partners, LLC: Index No. 154592/22, App. No. 17547-17548, Case Nos. 2022-04163, 2022-05634 (App. Div. 1 Dept.; 3/21/23; Kapnick, JP, Kern, Gesmer, Moulton, Higgitt, JJ)