Tenants Seek Class Action Status for Rent Overcharge Claims

Sixty-one tenants in 18 different buildings sued landlords and sought class action designation. Tenants claimed that owners were single-purpose-entity LLCs, all of which shared the same individual managing member. Tenants claimed that the landlords had jointly engaged in a scheme designed to inflate rents above the amounts they were legally permitted to charge by: (a) misrepresenting the costs of individual apartment improvements (IAIs); and/or (b) deregulating apartments despite receipt of J-51 tax benefits. Landlord asked the court to dismiss the case, objecting to class certification. The court ruled against landlord. The fact that a management company was not a named defendant in the action wasn't material to the claims against landlords. And while the names of two tenants were inadvertently omitted from the court action caption, this was clearly an oversight and not a reason to dismiss the case. It also was premature to dismiss the class certification claims. It also didn't matter that individual tenants may have different overcharge damages. 

Mahmood v. Riverside 1795 Assoc. LLC: Index No. 15726/2019, 2020 NY Slip Op 20229 (Sup. Ct. NY; 9/10/20; Borrok, J)