The city has agreed to pay $130,000 in taxpayer money to settle a lawsuit on behalf of disabled and senior tenants who argued they unjustly lost their rent freezes after their family members died.

Filed last June by Public Advocate Letitia James and Legal Services NYC, the federal suit named 10 residents aged 27 to 95 as plaintiffs, challenging alleged rent overcharges dating back to a rule change in 2014. The offending rule made household members of rent-stabilized tenants with rent frozen through the city's SCRIE and DRIE programs reapply for the benefit within 60 days of the relative's death or lose the subsidy (the city pays the difference between the frozen rent and the allowed increase under rent regulations). The previous deadline was six months.

Qiao Xiao He, a wheelchair-bound senior whose husband died in 2014, was among the plaintiffs because the rent on her Chinatown walk-up shot up to $790 from $523, more than her Social Security payment. She died at 95 before the suit concluded, along with two other plaintiffs. The settlement amounts to $5,000 and $6,000 per tenant, and will go to the estates of those who are deceased. The other $75,000 will go to pay the tenants' legal fees.

"This settlement will go a long way to protect our most vulnerable New Yorkers," Public Advocate James told the New York Times.

The city's Finance Department stopped enforcing the rule after the lawsuit was filed, and a new state law passed in December returned the deadline to reapply to six months.

A Finance Department official said in an affidavit that seven other households were cut off because they missed the deadline, and they too would be returned to their previous rent. The settlement mandates that the agency do more outreach to let tenants know how to reapply.

"Once the city was aware that there really was a legal problem, they were willing to engage with us to resolve it, not only for our clients, but for everyone who may have been affected by the 60-day rule," Legal Services lawyer Christina Clarke told the Times.

The city acknowledges no wrongdoing.