The Legal Aid Society filed this class action lawsuit on behalf of tenants who were overcharged rent for decades by their landlord. From 1974 until 2017, Queens landlord Hewlett Associates, LP, reaped the rewards of New York’s 421-a and J-51 tax benefit programs, which are designed to incentivize the construction and renovation of affordable housing and to protect seniors living on a fixed income against rent increases, while disregarding the legal obligations of the programs. Hewlett failed to register the rents of its building, neglected to provide notice of the building’s rent-stabilized status, and mislead tenants as to that status when the tenants asked about it, and most egregiously, overcharged tenants to the tune of hundreds of thousands of dollars.

In this case, we sued both Hewlett and the New York City Department of Housing and Preservation (HPD). Hewlett’s malfeasance was enabled by HPD, which has long been aware of landlords’ non-compliance with the rent stabilization requirements. We argued that, by standing idly by, the City conferred an impermissible gift to Hewlett by allowing Hewlett, and other landlords, to receive at least $100 million in tax benefits while in non-compliance. In May 2020, a State trial judge denied Hewlett’s motion to dismiss our case but granted the City’s motion. Hewlett sought to renew its motion, which was rejected by both the trial court and the Appellate Division, First Department. The Appellate Division made clear that tenants have the right to challenge fraudulent rent overcharges. Discovery in the case is ongoing.