NY Court of Appeals Rules No Retroactive Rent Charge Disputes

NEW YORK CITY- The State of New York Court of Appeals has ruled that the Housing Stability Tenant Protection Act of 2019 cannot be applied retroactively to revive, or expand recovery on, a previously asserted rent overcharge claim. Now rent charges must be resolved under the law when they go into effect at the time the overcharge occurred.

Part F of HSTPA, which the court has ruled unconstitutional to apply to retroactive charges, holds landlords responsible for rent charges above a certain threshold. The Court of Appeals definitively held that, under the prior law, an overcharge is calculated using the rent charged four years prior to the filing of a complaint, plus any legal increases applicable during the four-year look-back period, except in the case of fraud.

Rosenberg & Estis’ Deborah Riegel, who represented Belnord Partners before Chief Judge Janet DiFiore in the case, tells GlobeSt.com the majority expressly agreed with the argument that the HSTPA does not apply to claims which were already time barred at the time of its enactment, and ruled that, to the extent they were not already time barred, retroactively applying Part F of the HSTPA would be a violation of the owners’ substantive due process rights, Riegel said.

“The Court of Appeals handed down a fair and extraordinarily thoughtful decision that will have a tremendous impact across the real estate industry. A ruling against the owners’ would have been catastrophic, retroactively subjecting them to large overcharge claims,” Riegel added.