Roberts v. Tishman Speyer Properties, L.P.

Under the J-51 program in the city of New York (city), apartment complexes that were rehabilitated received tax benefits. Apartment complexes that received J-51 benefits generally became subject to the city’s Rent Stabilization Law (RSL). The RSL set the permissible level for rent increases. The Metropolitan Insurance and Annuity Company (MetLife) (defendant) owned an apartment complex in the city. The apartment complex began receiving J-51 benefits in 1992. But the apartment complex had already been subject to the RSL since 1974. In 1993, the RSL was amended to include a luxury-decontrol provision. This meant that high-rent apartment units occupied by high-income households were no longer regulated by the RSL. However, the RSL was also amended to include an exception to the luxury-decontrol provision. The exception stated that luxury decontrol did not apply to apartment complexes that became subject to the RSL by virtue of receiving J-51 benefits. After the RSL was amended, MetLife began charging market-rate rents for the apartment units that were deregulated pursuant to the luxury-decontrol provision. In 2006, MetLife sold the apartment complex to Tishman Speyer Properties, L.P. (Tishman) (defendant). Subsequently, nine tenants (plaintiffs) in the apartment complex brought suit, contending that luxury decontrol did not apply to the complex. The trial court dismissed the tenants’ complaint. The appellate division reinstated the complaint, holding in favor of the tenants. MetLife and Tishman appealed to the New York Court of Appeals, claiming that the exception to the luxury-decontrol provision did not exclude all apartment complexes receiving J-51 benefits from luxury decontrol.