In light of the landmark Roberts decision (a case that held that owners who had received J51 tax benefits from the City of New York and then subsequently deregulated rent stabilized apartments were liable for rent overcharge damages in respect of those apartments), several tenants in the same building are often seeking redress for rent overcharge damages.

These neighbors will talk to each other and will often hire the same attorney. That attorney may believe that it is a good idea to commence a class action lawsuit rather than commence individual lawsuits for each of the tenants in the building. There is one significant problem with bringing a class action lawsuit on behalf of several tenants in the same building – a problem recently discussed by the Appellate Division, First Department in the case of Downing v. First Lenox , 107 A.D.3d 86, 965 N.Y.S.2d 9 (1st Dept, 2013).

The problem is that the members of the class action will not be entitled to treble damages on the rent overcharge and will thereby lose the ability to obtain the great majority of the damages to which they would otherwise be entitled. It is the law by statute that when one chooses to proceed as part of a class action that the member of the class loses the right to seek treble and punitive damages.

“Treble damages” is defined as follows:

“Punitive damages” is defined as follows:

If you are a tenant who is going to hire the same attorney as all of the other tenants in your building – with each of you seeking to recover damages due to rent overcharges – be aware that you can opt out of the class. Not participating in the class will entitle you to seek treble damages. Know your rights!