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New York Landlords Beware: Court Says Renters Can Sue as a Group

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A ruling in New York State court on Monday, November 24, has paved the way for tenants to sue landlords as a group.

On Monday, November 24, the top courts in New York State ruled that the class action lawsuits of the tenants of three Manhattan apartment buildings who claim their rent was increased illegally can proceed. This decision will pave the way for thousands of New Yorkers to sue their landlords.

Claims by the buildings’ owners that class action lawsuits in landlord-tenant disputes are prohibited by state law were rejected by the Court of Appeals. This is the first time that this issue has been addressed by the court.

According to the tenants, the owners of the three buildings in Manhattan, including one in the high-end Sutton Place neighborhood, illegally removed their apartments from New York City’s rent control program, even though they continued to collect tax breaks.

Thousands of people are involved in close to 20 lawsuits of a similar nature, which are pending in New York State courts and will now be able to proceed under Monday’s decision. The classes range insize from around 30 tenants to over 500.

Matthew Brinckerhoff, who represents renters in one of Monday’s cases and five like lawsuits, said the decision was critical because a single tenant is unlikely to file a suit on his or her own, since the cost for a lawyer would be more than an individual’s recovered settlement.

“Most tenants don’t go out and vindicate their rights, even in a clear-cut case like this,” said Brinckerhoff, of the law firm Emery Celli Brinckerhoff & Abady. “They just keep on paying.”

Jemrock Realty Company LLC, a lawyer for one of the landlords, declined to comment. Lawyers for the other two landlords did not return requests for comment.

When a tenenat files individually, the state law allows them to seek three times the amount of a rent overcharge. On Monday, the court said the class actions could proceed because the plaintiffs waived that right and agreed to seek only a refund on the amount they said they were overcharged.

Three separate lower court rulings were affirmed by the decision. The cases are Borden v. 400 East 55th Street Associates; Gudz v. Jemrock Realty Company LLC; and Downing v. First Lenox Terrace Associates, New York State Court of Appeals Nos. 182-184.

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