AG James Secures More Than $600k from Developers Flouting Rent Stabilization Requirements

State Attorney General Letitia James

New York Attorney General Letitia James announced agreements on Monday in four cases involving real estate developers failing to comply with rent-stabilization requirements, three of which involved development properties in Queens.

The developers took part in the 421-a program which 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 all received the tax benefits but failed to adhere to the requirements, the attorney general’s office said in a press release on Monday.

In all, the attorney general’s office secured more than $613,000 from the developers in the settlement agreements. 

“Rent-stabilization laws exist to protect tenants, and we will not let landlords or developers circumvent them,” said 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.”

City Council Member Jimmy Van Bramer/Facebook

The settlements involve four cases involving separate properties and developers, three of which were in Queens. The cases that were settled involved the Queens developers of the Bridgeview Tower Condominium in Long Island City, 5-11 50th Avenue in Long Island City, and 63-36 99th St in Rego Park. The developers of 33 Bay 41st St in Brooklyn also came to an agreement.

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.

City Council Member Karen Koslowitz

“Our rent laws keep tenants safe in real affordable housing,” said City Council Member Jimmy Van Bramer (D-Sunnyside, Woodside, Long Island City, Astoria, Dutch Kills), whose district includes the two Long Island City properties. “When the rent laws are violated and ignored by landlords and developers, it jeopardizes the housing stock for everyone.”

The third case in Queens 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 (D-Rego Park, Forest Hills, Kew Gardens, Richmond Hill). “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.”