Owners Challenge Regulations, Tenant Protection Unit

In a recently filed lawsuit in state Supreme Court in Brooklyn, two building owners and three landlord groups have asked the court to declare many of the newly amended rent stabilization regulations and the actions of the state's Tenant Protection Unit "invalid and unenforceable." Gov. Cuomo established the unit in 2012 to investigate landlord fraud, and the legislature has twice declined to provide funding for it.

The amendments provide a regulatory basis for the Tenant Protection Unit, which has conducted hundreds of audits of individual rent increases, and issued subpoenas to investigate the practices of individual landlords. The suit claims that the new Tenant Protection Unit has no standards, procedures, or appeals process, and thus has violated the due process rights of owners.

In addition, the lawsuit alleges that the new rules violate the clear intention of the legislature, which had set a four-year statute of limitations for challenging rent increase determinations. The new rule allows tenants to look back further than four years to prove past fraud by owners. In justifying the new rule, the state said it was reflecting a series of recent court decisions, but the lawsuit claims that the new rule goes much further.