New York's Stuy Town Tenants Keep Cheap Rent
The ruling originally lowered the rent for just a few months but, two extensions later, it will expire at year's end unless a different agreement is signed.
The deal was struck when the tenants won their lawsuit, which went all the way to the State Supreme Court. The tenants will continue to enjoy their apartments at estimated rent-stabilized levels rather than the much higher market rates of over $2,000 per month.An independent consultant was hired in March to conduct an analysis to recalculate rents for each of the 4,400 affected units. An attorney for the parties said that the "matter will be resolved through good faith negotiations before the end of this year." Until the issue is resolved tenants can enjoy the cheaper rent.
The owners of Stuy Town defaulted on its $3 billion first mortgage in February. Bank of America and CW Capital Asset started foreclosure proceedings. In April the lenders went to court and proposed selling the property. The tenant association has asked for help from the California Public Employee's Retirement System in its possible bid to buy the property.
Other luxury apartments throughout New York may or may not benefit from this settlement. In May, New York Gov. David Peterson proposed rent regulation reform to resolve the rent overcharge issues raised by the court in the Stuy Town case.
About 40,000 rent-stabilized units statewide could be impacted by this legislation. The governor wants to extend rent regulation for eight years, but increase the monthly legal rent threshold for luxury decontrol to $3,000 from $2,000. Any overcharges by landlords of rent-stabilized properties will be given six months to refund tenants for any rent overcharges during the four years prior to the Stuy Town ruling.
More on AOL Real Estate:
See apartments for rent in your area.
Looking for a new home? See "Should You Rent or Buy?"
Want to learn more about home buying and home finance? If so, you won't want to miss
our online discussion with industry experts, "What Works Now: Smart Moves When Buying a Home,"
created by AOL Real Estate in participation with Bank of America Home Loans.
Watch it now on AOL Real Estate.