The state's highest court Thursday ruled that the owners of Stuyvesant Town and Peter Cooper Village in Manhattan improperly charged market rents on thousands of apartments.

The court decision could now affect landlords across the city.

In the 4-2 decision, the court said owners Tishman Speyer Properties and BlackRock Realty illegally raised the rent on regulated apartments in the middle-class enclave.

The court found that rents were hiked above market rates, while the owners collected city affordable housing tax breaks for renovations.

The owners, as well as former owner MetLife, may have to refund about $200 million in overcharges and damages to tenants of approximately 4,000 apartments.

"It's a victory for the tenants of Stuyvesant Town,” said Manhattan Councilman Daniel Garodnick, who lives in Peter Cooper Village. “And it's also a victory for taxpayers, because we are giving away tax breaks for specific purposes. It's supposed to be linked with the preservation of affordable housing. You are not supposed to deregulate apartments while you are getting this tax break."

"I'm happily shocked,” said resident and plaintiff Beth Rosner-Giokas. “You don't expect justice to go the way of the people of New York. We had some great lawyers working for us and we just had to hold out hope."

"I don't think I could be happier. It means we can continue living here,” said resident Jill Pratzon. “We were really at the point where we started saying, we’re really going to have to look somewhere else. We were hanging on, waiting for this decision to happen.”

Tishman Speyer and Black Rock Realty bought the complexes in 2006 for $5.4 billion, and they are reportedly in deep financial trouble and in danger of defaulting on a $4 billion loan.

Tishman Speyer called the ruling an unfortunate outcome for New York and said, “The ruling, which reverses 15 years of government practice, raises a number of difficult issues that will need to be resolved by the courts and various government agencies in the coming months and years.”

Some tenants were concerned the owners may not be able to maintain the properties.

"It makes me worry in general about the financial situation with the owners of this complex," said resident Kris Berger.

"They'll go bankrupt here. They will," said another resident. "They paid too much, and they are getting too little."

This decision could also affect landlords of as many as 80,000 apartments citywide who also may have raised rents and deregulated apartments while receiving city tax breaks.