Court Rules Developer Overcharged Tenants

Market Rate Rents Barred at Stuyvesant Town and Peter Cooper Village

Friday, March 06, 2009

A panel of appellate court judges unanimously ruled that the owners of Stuyvesant Town and Peter Cooper Village wrongly turned rent-regulated apartments into market-rate ones, and overcharged about 3,000 tenants. WNYC's Cindy Rodriguez reports.

REPORTER: In 2006 Developer Tishman Speyer purchased the property for $5.4 billion and has been trying to deregulate thousands of apartments. But the appellate division ruled that Tishman could not do that because it was receiving a tax credit.

An attorney for the tenants says the landlord could potentially have to reimburse tenants for over payments going back to 2003. A landlord group says the ruling will have a rippling affect across the city and make thousands of owners liable for overcharges. Tishman Speyer says it will appeal the decision. A lower court had ruled in its favor.

The decision is particularly troublesome for Tishman because it borrowed billions of dollars based on the assumption it would deregulate thousands of units and raise rents. It had already been running into trouble and credit rating agencies say it will likely deplete its reserves before the end of the year. For WNYC, I'm Cindy Rodriguez.


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