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Matter of Regina Metro. Co., LLC v New York State Div. of Hous. & Community Renewal

Court of Appeals of New York

April 2, 2020, Decided

No. 1, No. 2, No. 3, No. 4



] In our tripartite form of government, the Legislature determines the public policy of this State, recalibrating rights and changing course when it deems such alteration appropriate as it grapples with enduring problems and rises to meet new challenges facing our communities. It is the distinct role of the courts to interpret the laws to give effect to legislative intent while safeguarding the constitutional rights of impacted individuals. We fulfill both core functions in these four appeals, which present a common issue [*2]  under the Rent Stabilization Law (RSL): what is the proper method for calculating the recoverable rent overcharge for New York City apartments that were improperly removed from rent stabilization during receipt of J-51 benefits prior to our 2009 decision in Roberts v Tishman Speyer Props., L.P. (13 NY3d 270, 918 N.E.2d 900, 890 N.Y.S.2d 388 [2009]).

As explained below, when leave was granted in these cases, the RSL mandated that, absent fraud, an overcharge was to be calculated by using the rent charged on the date four years prior to filing of the overcharge complaint (the "lookback period") as the "base date rent," adding any legal increases applicable during the four-year lookback period and computing the difference between that legal regulated rent and the rent actually charged to determine if the tenant was overcharged during the recovery period. In such cases, consideration of rental history predating the four-year lookback and statute of limitations period was prohibited. While the appeals to this Court were pending, the Legislature — as is its prerogative — enacted the Housing Stability and Tenant Protection Act of 2019 (HSTPA), making sweeping changes to the RSL, the majority of which are not at issue in these appeals. As relevant here, Part F of the HSTPA includes [*3]  amendments that, among other things, extend the statute of limitations, alter the method for determining legal regulated rent for overcharge purposes and substantially expand the nature and scope of owner liability in rent overcharge cases (see L 2019, ch 36, Part F). The tenants in these cases urge us to apply the new overcharge calculation provisions to these appeals that were pending at the time of the HSTPA's enactment, some of which seek recovery of overcharges incurred more than a decade before the new legislation.

The validity of Part F is not in question here — but significant issues are raised concerning whether the presumption against retroactive application of statutes has been rebutted and, if so, whether application of certain amendments relating to overcharge calculation in Part F to these appeals involving conduct that occurred years prior to its enactment comports with fundamental notions of substantial justice embodied in the Due Process Clause.  [**3]  Retroactive application of the overcharge calculation amendments would create or considerably enlarge owners' financial liability for conduct that occurred, in some cases, many years or even decades before the HSTPA was enacted and for which [*4]  the prior statutory scheme conferred on owners clear repose. Because such application of these amendments to past conduct would not comport with our retroactivity jurisprudence or the requirements of due process, we resolve these claims pursuant to the law in effect when the purported overcharges occurred. Notwithstanding the hyperbole employed by our dissenting colleagues, our analysis of the narrow legal issue presented by application of the overcharge calculation amendments to these appeals turns entirely on conventional and time-honored principles of judicial review. ] "We are, of course, mindful . . . of the responsibility . . . to defer to the Legislature in matters of policymaking," but it is the role of the judicial branch "to interpret and safeguard constitutional rights and review challenged acts of our co-equal branches of government — not in order to make policy but in order to assure the protection of constitutional rights" (Campaign for Fiscal Equity v State of New York, 100 NY2d 893, 925, 931, 801 N.E.2d 326, 769 N.Y.S.2d 106 [2003]). As to the HSTPA, today we fulfill this quintessential judicial function in holding that a limited suite of enforcement provisions may not be applied retroactively and opine in no way on the vast majority of that legislation or its prospective application. [*5] 

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2020 N.Y. LEXIS 779 *; 2020 NY Slip Op 02127 **

 [**1]  In the Matter of Regina Metropolitan Co., LLC, Respondent, v New York State Division of Housing and Community Renewal, Appellant, Leslie E. Carr et al., Intervenors-Respondents. (And Another Proceeding).Joel Raden et al., Appellants, v W7879, LLC, et al., Respondents.James Taylor et al., Respondents, v 72A Realty Associates, L.P., Appellant, et al., Defendant.Elizabeth Reich, et al., Appellants, v. v Belnord Partners, LLC, et al., Respondents.



Prior History: Reich v. Belnord Partners, LLC, 168 A.D.3d 482, 91 N.Y.S.3d 410, 2019 N.Y. App. Div. LEXIS 232 (Jan. 15, 2019)Raden v. W 7879, LLC, 164 A.D.3d 440, 84 N.Y.S.3d 30, 2018 N.Y. App. Div. LEXIS 9036 (Aug. 16, 2018)Taylor v. 72A Realty Assoc., L.P., 151 A.D.3d 95, 53 N.Y.S.3d 309, 2017 N.Y. App. Div. LEXIS 4113 (May 25, 2017)Matter of Regina Metro. Co., LLC v. New York State Div. of Hous. & Community Renewal, 164 A.D.3d 420, 84 N.Y.S.3d 91, 2018 N.Y. App. Div. LEXIS 5752 (Aug. 16, 2018)


overcharge, rent, retroactive, deregulation, tenants, cases, calculation, apartment, damages, retroactive application, lookback, regulated, provisions, courts, four year, landlords, revival, rights, records, four-year, rental, benefits, retroactive effect, treble damages, effective date, past conduct, pending case, statute of limitations, rational basis, due process

Constitutional Law, Separation of Powers, Governments, Courts, Authority to Adjudicate, State & Territorial Governments, Legislatures, Legislation, Effect & Operation, Retrospective Operation, Real Property Law, Landlord & Tenant, Tenant's Remedies & Rights, Remedies, Rent Regulation, Rent Control Statutes, Interpretation, Statute of Limitations, Time Limitations, Rollbacks, Torts, Fraud & Misrepresentation, Actual Fraud, Elements, Fundamental Rights, Procedural Due Process, Scope of Protection, Statutory Remedies & Rights