New lawsuit for the city’s 14th largest residential landlord: Bronstein Properties
Outrage in the city
Scandal has hit the City. The 14th largest residential landlord in New York City, Bronstein Properties, was hit with a major class action lawsuit. Tenants are arguing that the firm increased dramatically the cost of some apartment improvements in order to collect more rent. This company owns several rent-stabilized properties. Fifteen of those properties are based in Queens. The nonprofit Housing Rights Initiative performed an investigation and results were incredible. Some tenants experienced a 141% increase in rent, in appearance due to “Individual Apartment Improvements”, or IAI.
The group of tenants filed the lawsuit in the Supreme Court of the State of New York via Newman Ferrera LLP. There, receipts show the landlords made no improvements that would be able to justify the increase. Furthermore, the property manager went as far as to not register some of the rent-regulated living spaces with the appropriate government department. In this instance, it should have been the Department of Homes and Community Renewal (DHCR). This benefitted the landlords because they would still receive tax benefits without stating the correct rent on leases.
More common than it should be
Aaron Carr, the founder of Housing Rights Initiative says this is not, sadly, an uncommon move. Even though Individual Apartment Improvements should be used to just rehabilitate apartments, the reality is a different one. This measure is often used to commit rent fraud and circumvent the rules of affordable housing that are in place in the city. After completing an IAI, a landlord is allowed to increase rent for only 2%, but no rules are in place that require landlords to provide documentation and receipts to the DHCR.
The regulation in place
Nevertheless, a representative for the DHCR had a different say. Back in January 2014, authorities established new rules that made landlords file the improvements that were made on the lease. Furthermore, tenants have more rights. They can now ask for receipts for up 60 days after they sign a new lease. However, these rules are not public, so a tenant must know they can ask.
If they do not list the IAIs, landlords are liable to receive harsh penalties. Since 2012, the Tenant Protection Unit returned 60,000 units to regulation and recovered more than $4 million in over charged rents.
Among other things, an IAI can be a new door or countertops. These are things property managers do in order to attract possible tenants. When these renovations happen, apartments are often vacant. If the landlord is looking to make more significant changes, they must obtain a special permit with the Department of Buildings. After their investigation, HRI discovered only one of the buildings affected by the lawsuit had these permits and had actually made the changes. In the rest of the apartments, the landlord charged tenants huge amounts for no reason.
These landlords were claiming they had performed millions of dollars in improvements, but had virtually no permits to back their claims. What is even more outrageous is the fact this is the 14th largest residential landlord in the city. It is important authorities pay more attention to the city’s affordable housing stock. [QNS]