Renters In 11,000-Unit NYC Complex In Foreclosure Score Big Win In Rent Overcharge Case; Tenants' Lawyer Pegs Haul At Approx. $200M

In New York City, Crain's New York Business reports:

• Tenants of market-rate apartments at Stuyvesant Town/Peter Cooper Village won a significant victory on Thursday when a judge ruled that they are entitled to rebates for rent overcharges. The ruling stems from a court decision last October, which said that the owners of the sprawling Manhattan residential complex were not entitled to deregulate rents while they were receiving a particular type of tax abatement. The court didn't rule on the issue of retroactive payments at the time.

• After the October ruling, former owner MetLife said the ruling should not apply to it because the decision came several years after the company sold the property to a partnership led by Tishman Speyer. That partnership paid an eye-popping $5.4 billion in 2006 and has since defaulted on its loans. However, the special servicer representing the lenders has yet to foreclose on the property. Sources expect the foreclosure in the next few months. MetLife had been trying to get the case against it dismissed but New York Supreme Court Justice Richard Lowe declined to do that and said the tenants are entitled to be reimbursed for rent overcharges.

• Tenant lawyer Alex Schmidt estimated that tenants could be due a total of $200 million. However, he isn't sure whether MetLife will try to appeal the ruling. Mr. Schmidt says negotiations with Tishman Speyer over settling the rebate issue are ongoing.

For more, see Stuy-Town tenants take home big win (Judge rules that they are entitled to be reimbursed for years of rent overcharges on apartments whose rents were unlawfully de-regulated; decision's impact on other properties is unclear).

Go here for other posts on the Stuyvesant Town / Peter Cooper Village fiasco in NYC.