New York City owners who participated in the J-51 tax exemption and abatement program have faced a surge of class action cases over the last five years that nonprofit tenant advocacy groups have brought. The crux of these class actions’ claims was that owners should suffer a rollback of rent to the rates charged years ago and return supposedly overpaid rent to the tenants. Underlying this was the claim that owners did not return apartments to rent stabilization following the 2009 Court of Appeals decision in Roberts v. Tishman Speyer Props., L.P. holding luxury deregulation of apartments unavailable in J-51 buildings. In 2018, the laws in this area were unsettled while many trial courts issued decision after decision that not only favored the tenants but allowed for an ongoing accumulation of interest on their money claims.

A long-time client of Adam Leitman Bailey, P.C. fell victim to a J-51 rent overcharge class action case, but the firm quickly resolved the case on terms favorable to the owner at a time when the trial courts were issuing one pro-tenant decision after another that triggered the potential for massive damages against its client.

Immediately after its initial meeting with its client, Adam Leitman Bailey, P.C. began to strategize how best to proceed given the substantial size of the proposed class and the costs, the time, and the risks associated with aggressive litigation. Through aggressive advocacy in negotiations, the attorneys secured a settlement wherein the rents did not change and any overpaid rent was returned in accordance with a formula negotiated by the attorneys based on current case law.

The firm’s resolution of this case would later mirror the rent calculation formula set by the Court of Appeals on April 2, 2020, in the Matter of Regina v. New York State Division of Housing and Community Renewal. Years before Regina, Adam Leitman Bailey, P.C. navigated the laws stacked against landlords and negotiated with reason to effectuate a settlement saving its client years in litigation expenses.

One person involved in the case noted, “Adam Leitman Bailey, P.C. nailed it, with its incredible math aptitude, combined with its negotiation skills, possibly saving tens of millions of dollars”.

Adam Leitman Bailey, Dov Treiman, and Carolyn Z. Rualo of Adam Leitman Bailey, P.C. represented the landlord in this matter.