stabilized apt made permanently exempt - over 4 years ago

[prospecter]

Hi,
My husband and I have lived in our apt since 2007. Rent was $1600 when we moved in and raised $50 over 4 years. At one point we received a rider that showed our rent as preferential and that the legal stabilized rent was $2000, though this was not in our initial lease and not in every subsequent renewal (I believe only 1 year).

Our landlord sold the building a year ago and upon renewal the new landlord raised the rent almost 30% to $2100. We were surprised b/c we thought the unit was stabilized. All 6 units in the building requested rental histories from DHCR and for our unit (the others were similar) the legal rent in 2005 was $416. Our initial landlord bought the building in 2005 and made renovations before renting out again and the record shows that in 2006 the legal rent was increased to $2000 and made permanently exempt.

None of the current tenants saw the building before renovation but I know they were pretty extensive. New kitchens, bathrooms, floors, etc... But even with extensive renovations I don't see how it's possible that the rent could have been legally raised so dramatically.

By my calculation, including a vacant lease increase of 20%, the renovations would have cost over $55K per unit. Public records show that the landlord took out a mortgage for $200K more than the sale price of the property. If all that was put to renovations, that would be closer to $30K per unit. As a group, we tenants have consulted a lawyer who seems to think we have a case.

We're deliberating on whether to pursue it. Would the onus be on the new owners to prove the renovation costs from 2005? Also, I've read conflicting things on the 4 year SOL. From the lawyer we talked with, it seems that they can go back more than 4 years to establish the legal rent, but the LL would only have to pay the most recent 4 years of overcharge. Is that correct? Any advice would be appreciated.