Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NEW YORK CITY-In a major setback for the owners of Peter Cooper Village and Stuyvesant Town, and potentially the landlords of thousands of rent-stabilized apartments across the city, the state’s highest court ruled Thursday that the massive complex’s ownership improperly raised rents while also receiving J-51 tax incentives for renovations. The closely-watched ruling from the New York State Court of Appeals upheld a lower-court decision issued earlier this year.

Attorneys for the current ownership, a joint venture of Tishman Speyer Properties and BlackRock Realty, and former owner MetLife, which sold the 11,200-unit Manhattan apartment complex for $5.4 billion in October 2006, argued that their timetable of deregulating rent-stabilized apartments was in accordance with state law. However, the Court of Appeals ruled that the argument was a misreading of the Rent Regulation Reform Act, and that landlords cannot charge market-rate rents while also receiving J-51 benefits.

The ruling may leave Stuy-Town’s owners liable for an estimated $200 million in rent overcharges and damages, according to the New York Times, and could expose other landlords to similar liability. A statement from Tishman Speyer says, “While we respect the Court’s decision, we view this as an unfortunate outcome for New York. The ruling, which reverses 15 years of government practice, raises a number of difficult issues that will need to be resolved by the courts and various government agencies in the coming months and years.”

The 4-2 Court of Appeals decision noted that Stuy-Town’s owners, who may be on the verge of turning the complex over to a special servicer, predicted “dire financial consequences from our ruling, for themselves and the New York real estate industry generally.” Pointing out that the predictions “may not come true” and depend on “issues yet to be decided,” the court added, “That the courts and litigants may experience some additional burden, however, is no reason to eschew what we view as the only correct interpretation of the statute.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.