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More downtown tenants are going to court to recoup what they say are years of rent overcharges, even as one landlord is asking the U.S. Supreme Court to take owners’ side in the fight.
A class-action lawsuit filed Sunday on behalf of tenants at 63 and 67 Wall St. — a 1,000-unit luxury complex once home to private bank Brown Brothers Harriman & Co. — seeks the return of back rent and new rent-stabilized leases for residents.
The suit marks the latest in a string of legal actions taken by Financial District tenants following a June ruling by the state’s top court that found owners of buildings benefiting from a downtown-only tax break known as 421-g must give rent-stabilized leases to their tenants.
Few had been doing so. The ruling by New York’s Court of Appeals has paved the way for current and former tenants of about 6,000 downtown apartments to seek rent they’re owed going back six years in some cases.
Lawyer Lucas Ferrara brought the case on behalf of sports attorney and 67 Wall St. tenant Tallen Todorovich.
Ferrara said the behavior by the building’s owner, Rockpoint Group, “is yet another example of the shameless sidestepping of our city’s rent laws by some major landlords.”
“These aren’t ‘moms and pops’ that are getting hit with these class-action lawsuits,” added Ferrara, a partner at Newman Ferrara LLP and adjunct professor at New York Law School.
“These are some of the city’s top owners who apparently were of the belief that [they] had carte blanche to do whatever they wished.”
Rockpoint Group declined to comment on the case Monday.
Goldman Sachs’ Ex-Home
Ferrara also has brought a class-action suit on behalf of tenants against UDR, owner of 10 Hanover Square, the former home of Goldman Sachs. The state Legislature created the 421-g tax break in 1995 to spur the conversion of downtown office buildings to residential apartments.
Dozens of other tenants in buildings across Lower Manhattan are working to get what they say is owed to them under the state ruling.
As they do, one of those buildings’ landlords is bringing the rent battle to the highest court in the land.
Attorneys for the owner of 50 Murray St., a building at the center of past lawsuits that led to the pivotal Court of Appeals ruling, have claimed the state ruling is unconstitutional and asked the U.S. Supreme Court to hear the case.
Fordham Law Professor Nestor Davidson said the petition by Clipper Equity “raises a distinctive constitutional issue that may interest the court” — whether a state court’s decision can infringe on, or take away, property rights. The issue was addressed in a 2010 decision over a Florida beachfront, but not decided in a conclusive way, he said.
Odds for any case to make it to the High Court are steep, given thousands of petitions filed annually. Four of the nine Supreme Court justices must agree to take a case before it can be heard.
At the Wall Street building and others where owners have benefited from the 421-g tax break, some tenants are working with court-appointed referees to determine what rent they are owed and to get rent-stabilized leases, said attorney Serge Joseph, who represents nearly 100 clients with 421-g-related cases.
Ferrara said that without much oversight from local officials or government bodies to enforce rent regulation, tenants are often forced to go the legal route.
“Tenants shouldn’t have to file lawsuits to seek relief,” he said.
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