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Three Takeaways from 'Casey v. Whitehouse Estates' Rent Regulation Decision
On March 16, 2023, the Court of Appeals decided Casey v. Whitehouse Estates, Inc., the first Court of Appeals ruling to address rent regulation since its landmark decision in Matter of Regina Metro. Co., LLC v. New York State Div. of Hous. & Community Renewal, 35 NY3d 332 (2020). In Casey, the Court of Appeals unanimously reversed the First Department's finding that the landlord's purported fraud mandated use of DHCR's so-called default rent formula.
(Note: In the interest of full disclosure, the author herein represented the prevailing landlord in Casey.)
Casey concerned a building wherein the landlord, relying on DHCR's advice, purported to luxury deregulate multiple apartments despite the building's receipt of J-51 benefits. Years later, the Court of Appeals ruled in Roberts v. Tishman Speyer Props., L.P., 13 NY3d 270 (2009), that DHCR had misinterpreted applicable law, and that such deregulations were unlawful. Various tenants in the building in Casey thereafter commenced a class action for rent overcharge, seeking, inter alia, recalculation of their rents and a refund of any overcharges collected.
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