The question in these cases is whether CPLR 213-a and other provisions prevent a court calculating the appropriate rent in an overcharge case based Roberts v. Tishman Speyer Props., L.P., 13 N.Y.3d 270 (2009), from considering an apartment’s rental history more than four years before the overcharge action was commenced.
Roberts involved two aspects of New York City’s rent regulation laws. The first permits the owner of a rent stabilized apartment to deregulate the apartment if its market rental value exceeds a threshold. This is called “luxury deregulation.” The second allows a property owner to take advantage of tax breaks if the owner performs certain projects on an apartment, like a gut renovation or other major capital improvements. In New York City, these tax breaks are called J51 benefits and receiving them makes an apartment subject to rent stabilization. In Roberts, the Court of Appeals held that an owner who receives J51 benefits cannot also benefit from luxury deregulation.
A tenant who seeks to recover rent overcharges due to a Roberts violation is limited to payments she made in the four years before she commenced her overcharge action. The “base date” is the date four years before the tenant filed her complaint, and separate panels of the First Department have diverged about how to calculate the appropriate rent for the base date.
At least one panel has held that the base date rent is based on the most recent legal rent that the owner could have charged, plus any increases that were permitted between then and the base date. See Taylor v. 72A Realty Assoc., L.P., 2017 N.Y. Slip Op. 04218 (1st Dep’t 2017). Other panels have held that a court calculating base date rent cannot look earlier than the four-year period before the tenant commenced her overcharge action. Such a view is grounded in CPLR 213-a, which “preclude[s] examination of the rental history of the housing accommodation prior to the four-year period immediately preceding the commencement of the action.” Stabilization Law § 26-516(a)(2); see Reich v. Belnord Partners, LLC, 2019 N.Y. Slip Op. 00220 (1st Dep’t 2019); Matter of Regina Metro. Co., LLC v New York State Div. of Hous. & Community Renewal, 2018 N.Y. Slip Op. 05797 (1st Dep’t 2018); Raden v. W 7879, LLC, 2018 N.Y. Slip Op. 05799 (1st Dep’t 2018).
The First Department granted plaintiffs leave to appeal in each case.