The Court of Appeals dealt a financial blow this morning to the already beleaguered owners of the sprawling Stuyvesant Town and Peter Cooper Village complexes in Manhattan when it ruled that they improperly began charging market rents on thousands of apartments, the New York Times reports.
The ruling by the state’s highest court may mean that the current owner, a partnership of Tishman Speyer Properties and BlackRock Realty, and the former owner, Metropolitan Life, may have to pay an estimated $200 million in rent overcharges and damages to tenants of some 4,000 apartments.
The court, in a majority ruling (two of the six judges dissented), said the owners improperly raised rents beyond certain set levels at the complexes while receiving tax breaks from the city for major renovations.
The decision could also affect landlords of as many as 80,000 apartments across the city who also may have improperly raised rents and deregulated apartments while receiving special tax breaks.
Tishman Speyer Properties and BlackRock, which purchased the properties in 2006 for a record-breaking $5.4 billion, are already under enormous financial pressure. The partnership is running out of cash to pay building loans and could default within the next several months.
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