NEW YORK – New York Attorney General Letitia James today announced agreements in four cases involving developers failing to comply with rent-stabilization requirements. The 421-a program provides partial property tax exemptions to real estate developers that build qualifying new housing in New York City. Under New York state law, developers that apply for and receive 421-a tax benefits must register the apartments as rent stabilized and provide the tenants with rent-stabilized leases, rights, and protections, unless the properties are exempt from these requirements because they are operated as a condominium or cooperative. The developers of the Bridgeview Tower Condominium in Long Island City, 5-11 50th Avenue in Long Island City, 33 Bay 41st St in Brooklyn, and 63-36 99th St in Rego Park, all received 421-a tax benefits, but failed to adhere to the relevant requirements.
“Rent-stabilization laws exist to protect tenants, and we will not let landlords or developers circumvent them,” said Attorney General James. “The agreements announced today affirm my office’s commitment to promoting access to safe, affordable housing for all New Yorkers. This is a notice to all bad actors seeking to take advantage of tenants: Not on my watch.”
The settlements involve four cases involving separate properties and developers. In the case of the Bridgeview Tower Condominium (Bridgeview Tower) in Long Island City, an agreement was reached with the sponsor of the building’s offering plan, Queens Bridgeview Tower, LLC, and its principals Zehao Fang, Simon Hung, and Austin Ting. The sponsor of Bridgeview Tower submitted an application for 421-a tax benefits to the New York City Department of Housing Preservation and Development (HPD), indicating that the building would be a condominium and thus not subject to rent-stabilization requirements. OAG subsequently discovered that all residential units in the building eventually became occupied by tenants, but the sponsor failed to treat the tenants as rent-stabilized under the terms of the 421-a partial tax exemption. As a result of the agreement, the sponsor is required to pay a $150,000 penalty, which will be used by HPD to provide affordable housing in New York City. The sponsor also is required to treat all tenants in the building as rent-stabilized and refund any illegal overcharges.
The second case involves the sponsor of 5-11 50th Avenue Condominium in Long Island City, 5-11 Realty, LLC, and its principals, Joseph Escarfullery, Elizabeth Petrossian, and Hyunseon Chung. The sponsor falsely represented to OAG that the building was vacant, even though it was occupied by residential tenants. The sponsor also received 421-a tax benefits for approximately 15 years, but failed to provide tenants with rent-stabilized leases and illegally overcharged tenants. The sponsor is required to pay $178,842 in restitution, which will be used by HPD to provide affordable housing to New Yorkers and refund $21,158 to tenants who were illegally overcharged. The sponsor also was required to treat the tenants as rent-stabilized and lower the rents to amounts permitted by law.
The third case involves the sponsor of 33 Bay 41st Street Condominium in Brooklyn, Wheelock Development, LLC, and its principals Tai Wah Liu, Lai Kuen Wong, Siu Yau Liu, Nenmei Chen, and Chun Kan Cheng. The sponsor illegally rented apartments prior to the completion of the building’s offering plan and failed to offer the tenants rent-stabilized leases despite receiving 421-a tax benefits. Under the agreement, the sponsor paid a penalty of $18,000 and also paid $13,000 in restitution to HPD to finance affordable housing in New York City. In addition, the sponsor is required to treat the tenants as rent-stabilized.
The final case announced today concerns the sponsor of the Millennium 99 Condominium at 63-36 99th Street in Rego Park, Tuhsur Development, LLC, and its principals, Yan Moshe and Vlad Moshe. The sponsor failed to treat certain tenants in the building as rent-stabilized and overcharged multiple tenants by thousands of dollars each. The sponsor also attempted to evict tenants of a unit, who were illegally overcharged, for non-payment of rent, even though the tenants actually were owed a refund of $22,042. Tuhsur Development was required to pay $159,592 in restitution to be used by HPD to provide affordable housing, $43,066 to tenants that were illegally overcharged, and a $30,000 penalty, as well as lowering the rents of certain units and discontinuing any eviction proceedings against the overcharged tenants.
“Undoubtedly, tenants at 63-36 99 Street, a property in my district, are elated by the intervention of the New York State Attorney General’s office on their behalf,” said City Council Member Karen Koslowitz. “I want to offer a profound thank you to Attorney General James and her Real Estate Finance Bureau for their activist role in protecting tenants from unscrupulous landlords abusing the 421-A tax exemption program.”
“Our rent laws keep tenants safe in real affordable housing,” said City Council Member Jimmy Van Bramer. “When the rent laws are violated and ignored by landlords and developers, it jeopardizes the housing stock for everyone. I want to thank Attorney General Letitia James for her work to protect our renters and target developers who break the law.”
“Affordable housing is a right, not a privilege,” said City Council Member Mark Treyger. “We must ensure that we protect and preserve the city’s rent-stabilized housing stock and hold landlords accountable to prevent abuse of existing housing laws. I commend Attorney General James on her leadership to safeguard the rights of all New York tenants.”
“Congratulations to our great Attorney General Letitia James for going after these scofflaw landlords, who have refused for years to comply with the law and abide by the standards of rent stabilization,” said Michael McKee, treasurer of Tenants Political Action Committee. “This is perhaps the least enforced provision of our rent and eviction protection laws. It is now incumbent on the NYC Department of Housing Preservation and Development and the NYS Division of Housing and Community Renewal to follow up with these landlords to make sure they do not simply pay these settlements and continue to mistreat their tenants. DHCR must ensure that tenants receive refunds for rent overcharges and that going forward these landlords comply with all requirements of rent stabilization, and the two agencies need to coordinate to prevent other landlords from getting away with non-compliance.”
All four matters were handled by Assistant Attorney General Wesley Worrel of the Real Estate Finance Bureau, under the supervision of Enforcement Section Chief Louis M. Solomon. The Bridgeview Tower matter also was handled by former Assistant Attorney General Ryan Goodland of the Real Estate Finance Bureau. The 5-11 50th Avenue matter also was handled by Assistant Attorney General Nicholas Minella of the Real Estate Finance Bureau. The Real Estate Finance Bureau is led by Bureau Chief Jacqueline Dischell. The Real Estate Finance Bureau is part of the Division of Social Justice, which is overseen by Chief Deputy Attorney General Meghan Faux. The Division of Social Justice is overseen by First Deputy Attorney General Jennifer Levy.