Rent Overcharge – Class Action Permitted

One of the more interesting issues presented by the Roberts case is that where a landlord has incorrectly deregulated several apartments in a building that the landlord will only suffer the consequences of that error when a tenant stands up for his/her rights. In other words, nobody is looking over a landlord’s shoulder in respect of every apartment in the building – someone must sue for damages.

A recent case decided by Manhattan Supreme Court Justice Anil Singh has granted a tenant advocate’s motion to treat all of the tenants in an individual building as a “class” for the purposes of a class action lawsuit against the owner of the building for damages from rent overcharges. In Casey v. Whitehouse Estates, 36 Misc.3d 1225(A) (N.Y.Sup.Ct, N.Y.Co 2012) Justice Singh determined that the tenant advocate met the criteria for class certification and permitted the tenant advocate to include all tenants in the building into a single class despite the unique nature of each apartment. The landlord there had deregulated many apartments in the same building despite having been receiving J-51 benefits that would have otherwise prevented the deregulations.

In reaching his decision Justice Singh determined that the tenant could show the following:

1. The interest of members of the class in individually controlling the prosecution of separate actions;

2. The impracticality or inefficiency of prosecuting separate actions;

3. The extent and nature of any litigation concerning the controversy already commenced by members of the class;

4. The desirability concentrating the litigation of the claim in the particular forum;



5. The lack of difficulties likely to be encountered in the management of a class action.

This decision is interesting because it deals a blow to landlords who might otherwise be unharmed by their mistake in improperly deregulating apartments because tenants who might not otherwise have been involved will now be represented.