Judge issues rent ruling on NYC apartment complex

NEW YORK

A judge told a former owner of a massive middle-class housing complex in New York City that it must help repay tenants for illegal rent hikes, which could affect the 4,400 tenants whose apartments were deregulated.

The court ordered $215 million in refunds to tenants at Stuyvesant Town and Peter Cooper Village. State Supreme Court Justice Richard Lowe ruled Thursday that the former complex owner, MetLife, had to share the burden with the current owner, Tishman Speyer.

The Court of Appeals had earlier ruled that the landlords could not get tax breaks for capital improvements while deregulating apartments.

The sprawling Manhattan complex of 110 buildings and 11,000 apartments was purchased for $5.4 billion in 2006, with the intention of quickly converting many rent-regulated units to market rates.

The owners did not make money as quickly as planned. The law prevents landlords from forcing out tenants or raising their rents by more than a small amount each year.

The owners handed the property over to creditors earlier this year after they said they could no longer make payments. The property's value had decreased to $1.8 billion.

The Rent Stabilization Association, a group representing property owners, said money for building improvements will now have to be used for the payouts.