Regina Metropolitan: What Practitioners Need to Know
On April 2, 2020, the Court of Appeals, by a 4-3 margin, issued a lengthy and groundbreaking decision in Regina Metro Co. v New York State Div. of Hous. & Community Renewal. The decision collectively decided four rent overcharge cases arising from Roberts v Tishman Speyer Props., L.P., 13 NY3d 270 (2009), wherein the Court of Appeals had ruled that luxury deregulation was unavailable in buildings receiving J-51 benefits. The landlords in Regina had deregulated various apartments based on advice from DHCR that luxury deregulation was not prohibited in such buildings. The question in Regina was how to compute base rents and rent overcharges in such cases.
The issue was further complicated by the enactment of Part F of the Housing Stabilization and Tenant Protection Act (HSTPA) on June 14, 2019. The Part F amendments dramatically altered how overcharges were to be computed.
The majority opinion in Regina is 57 pages long, and the dissenting opinion consists of 52 pages. Accordingly, this article will focus on what the Court did and did not decide in Regina, and how its holding affects pending overcharge cases.
The Court’s primary holding in Regina is that retroactive application of the Part F amendments would violate the Due Process clause of the U.S. Constitution. Contrary to what at least one commentator has written, the retroactive application issue has nothing to do with the date on which an overcharge claim is filed. Instead, the majority held that overcharges collected pre-HSTPA will be governed by what is essentially the 1997 version of the RSL (RSL-97). Overcharges collected after the HSTPA’s June 14, 2019 effective date will be calculated under the new statute. The Court did not clarify how all of this will work in practice in those cases where overcharges were collected before and after the HSTPA.
Although the Court of Appeals in Regina decided four Roberts cases, it made clear that its ruling governed any and all overcharge claims. First, the majority observed that the Part F amendments “apply to all overcharge claims — not merely those flowing from an improper deregulation, much less a Roberts deregulation” (majority op. at 2). Second, because applying the Part F amendments to pre-HSTPA overcharges was deemed unconstitutional per se, Regina necessarily establishes the rule for any claim involving overcharges collected before June 14, 2019.
Contributing Advisors
Richard L. SussmanMember, Rosenberg & Estis, P.C.
