Albany Republicans Try to Gut Overcharge Victory

Albany Republicans Try to Gut
Overcharge Victory

In December 1994, Housing Court Judge Howard Malatzky ruled that Simon Pilkes, a Manhattan tenant whose landlord had illegally tripled his apartment’s rent in 1986-87, was entitled to have the court look back more than four years to establish what the legal rent should be. Malatzky held that the state’s “four-year rule,” which bars tenants from collecting damages for rent overcharges more than four years old, was not a “statute of limitations” allowing prior illegal increases to be included in the rent.Last April, a state appeals court affirmed the Zafra vs. Pilkes decision. Immediately, the landlords of New York City got their fast friends in the State Senate, led by Housing Committee Chair Vincent L. Leibell (R-Putnam), to introduce a bill that would roll back the courts’ interpretations of the law on the issue.

The Leibell bill would set the amount paid four years ago as the basis for the legal rent, and bar the courts from inquiring into the apartment’s prior rent history. It would also protect landlords who have failed to register their apartments — and thus, under the current statute, can’t claim immunity under the four-year rule — by stopping the courts, and presumably the state Division of Housing and Community Renewal, from even looking at rent records more than four years old.

Prior to the Pilkes decision, it was assumed that the four-year statute of limitations in the rent-stabilization law meant that (1) a tenant could not collect a damages for overcharges they paid more than four years before they filed their complaint, (2) a landlord was not required to retain rental records more than four years old, and (3) the rent charged four years ago was the basis for the “legal” rent, even if known to be illegal. After Pilkes, the last assumption is no longer true. The landlord can still prevent the tenant from collecting for overcharges older than four years, and safely throw away his rental records from more than four years ago. But if other records more than four years old from the tenant or DHCR show that the current rent is based on an overcharge, they may be used to reduce the rent to the legal amount.

Sam Himmelstein, the attorney for Simon Pilkes, said that “the effect of this bill would be to immunize landlords from liability for millions of dollars of their illegal rent increases.”

No version of the Leibell bill has been introduced in the Assembly. Tenant advocates are alerting their supporters of the dangers of the measure.