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1 of 50 DOCUMENTSCopyright 2009 The New York Times Company The New York TimesSeptember 11, 2009 Friday Late Edition - FinalSECTION: Section A; Column 0; Metropolitan Desk; Pg. 21LENGTH: 701 wordsHEADLINE: Millions in Rebates at Stake In Rent Case Before Top CourtBYLINE: By JEREMY W. PETERSDATELINE: ALBANY BODY:When the Court of Appeals decides whether the landlords of Stuyvesant Town and Peter Cooper Village, the sprawling developments on Manhattan's East Side, have to repay millions of dollars in rent overcharges to thousands of tenants, its ruling could very well depend on a single word: ''became.'' Oral arguments on Thursday before the state's highest court sounded at times like a grammar lesson, as lawyers representing the tenants and the landlords, Tishman Speyer Properties and BlackRock Realty, faced numerous questions from the judges about the definition of the word. What ''became'' means as it applies to the state's rent regulation law is at the center of the landlords' contention they acted lawfully when they deregulated apartments in the two complexes and raised rents. ''You might say that I became a grandfather for the third time last month. Isn't that normal English, even though I was already a grandfather?'' Judge Robert S. Smith asked, suggesting that the word can refer to something that is not necessarily happening for the first time. Jay B. Kasner, the lawyer who argued the case on behalf of Tishman and BlackRock, responded that such usage was colloquial and therefore incorrect. But Alexander H. Schmidt, the lawyer representing the tenants, told the judges that Mr. Kasner was restricting the definition to refer to something ''transformational'' when, in fact, the word can apply to an event that has happened before. When the State Legislature wrote the law allowing landlords to remove certain apartments from rent regulations, it made an exception for apartments that ''became or become'' subject to stabilization because the landlords received certain tax benefits, as was the case with the developers that bought Stuyvesant Town and Peter Cooper Village. Lawyers for Tishman and BlackRock, along with lawyers for the complex's previous owners, Metropolitan Life, argued that the tax benefits had nothing to do with the buildings' rent-stabilized status because they became rent-stabilized 18 years before the developers started receiving the tax benefits. Lawyers for the tenants, however, maintained that the landlords had arbitrarily selected a meaning out of the dictionary that suited them. A ruling in favor of the tenants could cost the developers more than $200 million at a time when they are in danger of defaulting on $4.4 billion in loans. The case has been closely watched because the Court of Appeals ruling, which may come as soon as next month, could have implications far beyond Stuyvesant Town and Peter Cooper Village. If the court forces Tishman and BlackRock to issue refunds, landlords across the city could have to repay ''tens, if not hundreds, of millions of dollars'' to tenants who were overcharged, the landlords' lawyers argued in their brief. The judges appeared interested in that point and questioned both sides on what the implications would be if they asked the landlords to pay tenants back. ''Is it really fair to change the rules of the game in the middle of the game?'' Judge Victoria A. Graffeo asked Mr. Schmidt, the tenants' lawyer. Judge Smith asked why tenants of landlords that had received tax breaks were any different from tenants in other buildings that were rent-regulated but faced the prospect of deregulation. ''Is it really so inequitable,'' he asked, that people in buildings like Stuyvesant Town and Peter Cooper Village ''should have to suffer what people in every other rent-controlled building have suffered with: luxury decontrol?'' Later, Judge Smith asked whether the situations both sides described were exaggerated. ''Is it conceivable that both sides are overestimating the catastrophe?'' he asked. ''It's been known to happen.'' The arguments on Thursday also focused on whether tenants whom the Legislature did not intend to include under rent regulation laws were benefiting from them. ''Buildings such as Peter Cooper Village and Stuyvesant Town that have been rent-stabilized for decades whose rents are well, well, well below market -- that is not who the Legislature was referring to,'' Mr. Kasner said. Mr. Schmidt responded, ''These are not rich people that we're talking about.''URL: : September 11, 2009 ................
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