‘Roberts’ tenants won’t get settlement checks by October

Tenants attorney Alex Schmidt Photo courtesy of Wolf Haldenstein

Tenants attorney Alex Schmidt
Photo courtesy of Wolf Haldenstein

By Sabina Mollot

Stuyvesant Town and Peter Cooper Village residents who are due rent overcharge damages as a result of the “Roberts v. Tishman Speyer” lawsuit won’t be getting their money as soon as expected.

According to the “Roberts” attorney for tenants, Alex Schmidt, while he’d initially aimed to get checks sent to tenants by October, attorneys are now hoping that some money will be distributed later this year and the rest by the first quarter of 2014.

The delay in payments was first reported in Crain’s on Friday. John Marsh, president of the ST-PCV Tenants Association, had also given neighbors a heads up on Wednesday on the association’s Facebook page.

However, both Schmidt and a rep for CWCapital insisted that the October date had never been set in stone; it’s just what the parties had been shooting for. Schmidt said the reason “Roberts” plaintiffs haven’t been paid yet is that the paperwork for the plaintiffs (of which there are 27,500) is taking a longer time to sort through than expected, with many parties only entitled to minimal damages. (Damages range from $150 to $200,000.)

Additionally, at this time, attorneys are also waiting for CW to turn over data regarding “Roberts” class members who the special servicer believes owe back rent money. Under the settlement, CW is entitled to any rent owed and therefore that affects how the individual would be paid.

Schmidt said attorneys are hoping to get money owed by MetLife to tenants by the end of the year, then focus on getting people paid who are not in arrears in rent, and then the people who CW says do owe rent.

Those individuals “would then have 45 days to say whether or not they disagree,” said Schmidt, but first the special servicer of the property has to calculate how much it believes it is owed. “It’s unfortunately very complicated,” said Schmidt.

Brian Moriarty, a spokesperson for CW, added, “A timeframe for payments was never established. That said, we hope that tenants are paid as soon as possible, but it is a lengthy administrative process given the number of claimants.”

Council Member Dan Garodnick, who is a “Roberts” class member, said the money should be repaid to tenants “as quickly as possible.”

He added that CW “should be as quick to give it back as they are to take it.”

Out of a $173 million settlement for tenants in apartments that were illegally deregulated by former owners MetLife and Tishman Speyer, close to $69 million will be paid out to tenants. The rest of the money is in the form of rent savings.

In other “Roberts” related news, over 150 tenants who got mid-lease increases have gotten rent rollbacks, Garodnick said.

In June, following an investigation by the attorney general into the mid-lease increases issued to around 1,100 residents of ST/PCV, the A.G. and CWCapital reached a deal to give rent rollbacks to any tenant who’d been misled into thinking there would be no mid-lease hikes.

The investigation came as a result of Garodnick alerting Attorney General Eric Schneiderman that he’d heard from residents who claimed they were assured by leasing agents that getting a mid-lease increase was highly unlikely, only to then get socked with an increase. Those tenants were then asked by the A.G. to sign affidavits describing how they were misled about the increases and in June, Garodnick said he knew of about 40 people who were affected. CWCapital said at the time that after its own “exhaustive effort” to find the affected parties, the special servicer had only heard from around 10. However, Garodnick said he has since learned about a total of 152 people who were awarded rent rollbacks.

The rent increases were issued by CW in May as a result of the “Roberts” settlement. The increases went as high as over $2,000, though most affected tenants reported getting hikes that were in the hundreds, and tenants were given six weeks to decide whether to renew their leases or leave. Another two hundred tenants got rent reductions.

9 thoughts on “‘Roberts’ tenants won’t get settlement checks by October

  1. So sad, but StuyTown was done the minute they got rent-jacked and mass evicted due to the Roberts deal the tenants were duped into accepting. You can stick a jackhammer in them, they’re done. All that’s left is for the bulldozers to start digging up the Oval so that Brookfield Properties can build their billion dollar condos to the moon, and so Ivanka Trump will finally have a nice cozy place she can call home.

    In honor of what StuyTown could have been! but in the hands of greedy landlords has unfortunately become, here are a few new, more appropriate names for the place, and they coincidentally all happen to rhyme with StuyTown:













    Bye StuyTown, it was nice knowing you…

  2. Sadly, as with so many issues in our current political and economic culture, the J-51 tax abatement, the defiance of the regulations tied to this abatement and the Roberts suit have been communicated in an intentionally opaque manner. This is just the most recent episode, but is no less infuriating for being familiar.

    A brief background of the J-51 abatement; every tax abatement and exemption granted creates an increased burden on other taxpayers and communities as a whole. The intent and language of the J-51 tax abatement legislation was to mitigate this burden by requiring that landlords who are granted these tax abatements must in return extend rent stabilization benefits to tenants in affected buildings for the duration of the abatement. Landlords are further required to reveal the status and duration of the abatement to tenants in all affected leases. The stated intent was to encourage the preservation of affordable housing and stable communities. The legislation states that the penalty for landlords found in non-compliance of this regulation is treble penalties for overcharges and permanent rent stabilized status to the tenant in an affected apartment.

    Met-Life and Tishman directly defied the language and intent of this regulation. Seeing that there seemed to be little enforcement or penalties against those who defied this regulation, some other landlords followed suit. An “opinion paper” issued in the Pataki era was interpreted by this group of landlords to provide legal cover to defy this regulation. It is important to note that the majority of J-51 recipient landlords, and their legal representatives, understood that there was no such loophole in the J-51’s rent stabilization requirement. This group of landlords complied with the J-51’s rent stabilization regulations, thus avoiding the stated penalties.

    The Roberts tenants were among the first tenant group in NYC able to secure a law firm willing to take on a J-51 case. The number of tenants affected in PCVST made this one of the only cases where a law firm could make the gamble to compete with the real estate lobby’s legal war chest. In the final negotiated settlement in this case, many affected tenants will be refunded a relatively inconsequential percentage of the overcharges they paid. The treble damages and permanent stabilization status written into the J-51 legislation as penalties were negotiated away to favor the landlord in this case. Disputed sums for individual apartment improvements were negotiated away to favor the landlord in this case. In all, many affected tenants were awarded little or nothing in this settlement. Wolf Haldenstein and Dan Garodnick claimed this settlement as a victory. In relative terms, perhaps they are correct. In recent years, there have been very few corporations penalized for defiance of tax regulations in our country. In our city, there have been very, very few landlords penalized for defiance of tax abatement and exemption regulations in our city.

    Now we are being told that there will be a delay in disbursing the refunds of stolen money to tenants. We are now told that the disbursement date mentioned in settlement announcements was “just an estimate”. That the disbursement process is “complicated”. That disbursement dates were not “set in stone”.

    Pertinent questions that are still unanswered:
    (A) Among the many other unexplained details regarding negotiations in the Roberts settlement; when and how did CW become a party to the monies to be paid by MetLife and Tishman to tenants who were illegally overcharged on rents? CW has the same remedies as every other landlord who wishes to pursue a past or current tenant for claims of damages or past-due rent. How and why is CW entitled to any claim on monies to be refunded to tenants for Met-Life and Tishman rent overcharges?
    (B) Who is collecting the no-doubt substantial interest on the pool of undistributed settlement funds?
    (C) Is any other party benefitting from this “unanticipated” delay in distributing the funds? If so, we need to know the names.

    • This is an excellent question. We have a right to transparency and answers to all our questions. Residents, taxpayers and journalists are following the money trail in this scandal.

  3. Such a bull by CW. They have computers and know exactly who ows any back rent. Also is alraedy known how much they have to pay out to each party. Delay tatics by CW and servicer. Tim ethat the court AGAIN tspes in and forces these peopel to finally release the money they owe to all renters. CW quick in taking, slow in paying. Where is the law to support the residents?

  4. Pingback: ‘Roberts’ tenants should soon see checks from Met Life | Town & Village Blog

  5. Pingback: ‘Roberts’ payments delayed again | Town & Village Blog

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