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Court of Appeals Authorizes Class Action to Recover Rent Overcharges

By Stewart E. Sterk
January 31, 2015

Does Rent Stabilization Law section 26-516, which entitles tenants to treble damages for most rent overcharges, constitute a “penalty” within the meaning of CPLR 901(b), which provides that, subject to an exception, no action to recover a penalty may be maintained as a class action? The Court of Appeals addressed that question in Borden v. 400 East 55th Street Associates, L.P., (NYLJ 11/25/14, p. 22., col. 1), and held that so long as tenants waived the right to recover treble damages, tenants could use the class action mechanism to recover rent overcharges.

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