Category Archives: J-51 Scandal

Stuy Town Tenants Win $69M in Rent Recovery Battle

Wolf Haldenstein Adler Freeman & Herz LLP and Bernstein Liebhard LLP, co-lead counsel for the plaintiff tenants in the Roberts v. Tishman Speyer class action, announced they have signed an agreement with the defendants to settle all past rent overcharge claims and future rent claims raised in the action.

The settlement was preliminarily approved today by Justice Richard B. Lowe, III, the Chief Justice of the Appellate Term, First Department.  The agreement requires final court approval.  A hearing on final approval is scheduled for April 9, 2013.

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Important Notice on Robert’s Class Renewal Leases

The renewal leases that are being sent to formerly market-rate tenants can be confusing because they state a “legal rent” on the cover page and can be read as if that is the rent you are being asked to pay. But there is usually a lower “preferential rent” on the attached “Renewal Lease Form.” The “preferential rent” is the ACTUAL rent you are being asked to pay. When you receive your renewal lease, please make sure to review this section of the Renewal Lease Form—boxes 5 and 6 will refer to the preferential rent—to see the actual rent you will be charged during the term of your renewed lease.

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MetLife, Tenants of NY’s Stuyvesant Town Settle Lawsuit

MetLife Inc (MET.N) has agreed to settle a 2007 lawsuit by tenants of Stuyvesant Town and Peter Cooper Village who claimed they were charged too much rent to live in Manhattan’s largest apartment complex.

Settlement terms were not disclosed. MetLife revealed the accord in its annual report filed on Tuesday with the U.S. Securities and Exchange Commission.

Alexander Schmidt, a lawyer who represents the tenants, said the accord covers “several thousand” tenants whose rent-regulated apartments were converted to market rents between January 2003 and November 2006.

MetLife sold the complex that November for $5.4 billion to a group led by Tishman Speyer Properties LP and a real estate unit of Blackrock Inc.

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Court Rules that Stuy Town and Peter Cooper Rent-Stabilization Decision Applies Retroactively

A New York state appellate court ruled yesterday that the landmark decision to protect rent-stabilized tenants in the Stuyvesant Town and Peter Cooper Village case should be applied retroactively, a move that could open the floodgates to millions of dollars in rent overcharges at other developments.

The new case, in which the court actually upheld the landlord’s lower court victory, involved a Manhattan couple looking to overturn a prior rent-decontrol ruling at 56 Seventh Avenue in the West
Village. The tenants argued that the Stuy Town case, called Roberts vs Tishman Speyer, where Roberts was a tenant, should allow them to have their market-rate apartment rents refunded in the form of overcharges.

“The Court of Appeals, when they decided Roberts , specifically left open the question of retroactivity,” said attorney Sam Himmelstein, who represented the tenants in the new case. “Landlords have been making motions to dismiss these cases saying that it shouldn’t be applied retroactively. Even though we lost the case, it’s a massive victory for tenants at large.”

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Stuy Town Lawyer Sees Red on Property Report

The tenant lawyer who recently led a groundbreaking court battle over rents at Stuyvesant Town-Peter Cooper Village is up in arms over a Wall Street report that predicts the ruling will drain billions in dollars from the city’s real estate market.

Alex Schmidt charged the Deutsche Bank report is based on “inaccurate assumptions” that “approach the irresponsible,” adding that losses would be “a fraction” of what it predicts, and that it overstates the financial impact of the ruling on New York’s landlords.

“Having studied [the report], it seems apparent it contains a number of assumptions that are either inaccurate or unwarranted,” Schmidt said of the report, which was released earlier this week to much fanfare.

In October, the New York Court of Appeals sided with Schmidt and StuyTown’s tenants over a controversial case charging the owners of the iconic apartment complex of improperly raising rents on thousands of rent-stabilized apartments.

The ruling opened a flood of questions for both StuyTown’s owners, real estate giant Tishman Speyer and money manager BlackRock, and landlords across the city, who suddenly faced the prospect of millions in damages and rent overcharges.

In its investor report, Deutsche Bank said the ruling will result in “a significantly negative impact on the New York apartment investment market for several years.”

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Want a New Lease at Stuy Town? Sit Tight

With all the great press coverage it’s been getting lately, one might think people would be rushing in hordes to snap up apartments at Stuyvesant Town.

Not exactly.

The 11,200-apartment Stuyvesant Town and Peter Cooper Village complex has shut its doors to new renters, as the owners, a partnership led by Tishman Speyer, try to figure out what in the hell to do in the wake of last week’s monstrous court decision.

“We are not signing new leases at this time,” a Tishman Speyer spokesman, Bud Perrone, said in a statement. “We are reviewing the ramifications of the court’s decision.”

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Building Chaos

A huge chunk of the city’s rental-apartment industry is in chaos this weekend as owners and tenants grope with the Court of Appeals ruling that luxury rent increases at Stuyvesant Town were illegal.

“Chaos is the perfect word,” said Jeffrey Turkel, partner in Rosenberg & Estes, who had filed an amicus brief on behalf of the Rent Stabilization Association, an owners’ group.

As renters and owners alike burned up the phone lines with their lawyers, questions swirled concerning:

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Tsk, Tsk, Tishman

Tishman Speyer Properties was dealt a huge setback yesterday after the state’s highest court ruled that the real estate giant improperly raised rents on thousands of rent-stabilized apartments at the sprawling Stuyvesant Town-Peter Cooper Village apartment complex on Manhattan’s East Side.

The stunning 4-2 decision by the state Court of Appeals, which was cheered by renters and jeered by landlords, could result in millions of dollars in damages and rent refunds to tenants who’ve seen their rents skyrocket as landlords sought to bring rents closer to market rates.

The ruling could also push some landlords, including Tishman, to walk away from properties whose values have sunk in the wake of the uncertainty surrounding the rent-hike issue.

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Speyers Dealt Tremendous Hit as Court Rules for Tenants at Stuy Town

In a decision with seismic implications for Stuyvesant Town and property owners throughout the city, the state’s top court has ruled against real estate giant Tishman Speyer on a far-reaching rent regulation lawsuit, declaring the landlord had no right to deregulate some 4,440 apartments.

In a 4-2 decision, the Court of Appeals upheld an appellate ruling that said Tishman Speyer was not allowed to take apartments out of the rent stabilization program at the 11,000-unit complex because it was accepting a tax incentive meant to encourage renovations. The ruling is a sharp reversal of the way the law has been interpreted for years, and even the New York State government previously advised landlords who accepted the tax incentive, called J-51, that they were permitted to deregulate apartments.

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NY Court Deals Landlords Huge Setback

Judges say Tishman Speyer must keep units rent regulated as long as they get tax breaks, derailing building owners’ plans to deregulate units to pay off their mortgages.

Tishman Speyer Properties and other owners of rent-regulated buildings suffered an enormous blow Thursday when the Appellate Division of New York’s Supreme Court unanimously ruled buildings receiving certain tax benefits could not deregulate apartments.

The decision is devastating because it derails the business plans of owners like Tishman Speyer, which purchased rent-regulated complexes with an eye toward deregulating units and boosting rents to market rates in order to pay off their mortgages. Tishman Speyer is already having major financial problems at Stuyvesant Town/Peter Cooper Village, the sprawling complexes it purchased in 2006 for $5.4 billion, because it hasn’t been able to covert units fast enough. In January, Fitch Rating said the company had only six months of reserves remaining to cover the trust portion of the debt on the property.

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