NYC Tenants File $10M Lawsuit Against Overcharging Landlords

Assemblyman and NYC Tenants File $10 Million Lawsuit Against Overcharging Landlords
by Catherine Yang
Epoch Times
September 14, 2014

NEW YORK—Even the politicians of the city are not immune from constant harassment, eviction attempts, and overcharges from landlords—if they live in rent-regulated apartments. “I’ve lived here all my life,” said Assemblyman Keith Wright outside his apartment building at The Riverton complex. “Since my mother carried me over the bridge as a baby.”

The Riverton in Harlem complex was built in 1949, with over 1,200 units, and Assemblyman Wright’s mother was the first to move into her building at the time. The residential development largely served the African American population as other projects like Stuyvesant Town-Peter Cooper Village restricted their tenancy based on race.

Today, it is one big melting pot and everyone, market-rate tenants included, are standing together against harassment from the landlords, Compass Rock Real Estate LLC, which is owned by CW Financial.

On Thursday, tenants and Wright filed a lawsuit against Compass Rock for $10 million for years of overcharging tenants through a variety of methods. “They are trying to nickel and dime us to death,” said Darren Pearson, second vice chair of the Riverton Tenants’ Association. Wright, who chairs the Housing Committee, discovered he was being billed multiple times for capital improvements the landlord may not have even made.

Rent Regulation & MCIs

There are about one million rent-regulated apartments in Annual increases in rent are capped by a percentage set by the Rent Guidelines Board in New York City. This means residents can pay as few as a couple hundred dollars in a coveted neighborhood where market rate easily pushes $7,000.

Large management companies and investors come in to purchase buildings full of rent-regulated tenants with the goal of pushing them out, then renovating the units to deregulate them, and listing the units for market rate. Thus, systemic harassment has become a daily occurrence for so many renters in New York City.

“We are going to fight this. There’s no reason for my tenants to be ringing my doorbell at 10:30, twelve o’clock, scared, because they have been paying their rent for three months or four months and they’re about to go to court,” said Randreta Ward-Evans, president of the Riverton Tenants’ Association.

In the last few months under the new management, the problems have become overwhelming for both the tenants and Ward-Evans. She often has four to six tenants coming to her home in a week, at all hours, asking for help. Many of the overcharges come in the form of major capital improvement (MCI) increases in rent. Although rent increases for regulated units are capped, if the landlord makes an improvement like fixing the elevator or replacing a boiler, the expenses can be added to their monthly rents. “There have been too many to count,” Pearson said.

Tenants have been challenging the MCIs since they started, as sometimes repairs were not actually made, or made to the extent management claimed they were. Lawyers recently analyzed three-years worth of MCIs and found that tenants have routinely been overcharged, billed for the same MCI multiple times, or subject to other unlawful rent increases.

Rent-regulated tenants have a long list of rights and very specific protections to keep them from being easily evicted, but if they become unable to pay their monthly rent, there is nothing a judge or lawyer can do to keep them in their homes.

Decrepit Conditions

While tenants in Harlem were announcing a lawsuit, residents of 222/224 West 21st Street in Manhattan rallied with elected officials against their landlord for leaving the building in unlivable conditions.

“I came home very late to find a strong noxious odor of gas in the apartment,” resident Jose Zarzal said in a press release. He called Con Edison, which sent a representative who informed Zarzal the gas had been shut off, without an emergency or any notice from his landlord. Unpredictable cuts to gas, water, cable, and internet service are frequent in the building as management is undergoing a gut renovation tenants say is a way to push residents out.

The building was originally rent regulated, and the state Division of Housing and Community Renewal ruled that it had been substantially rehabilitated and thus deregulated several years ago. However, tenants say they were not notified. This March, residents started receiving eviction notices from MGT Property Management, telling them to vacate by April 30, 2014. By the end of March, Slate Property Group took over and started gut renovating the apartments. By the end of June, the city’s Department of buildings issued a stop-work order on all construction activity because of illegal removal of firewalls. Now, tenants are stuck with debris and holes in their walls and ceilings.

“They would not negotiate, and then started battering us few remaining tenants with overbearing construction, harassment and invasion of privacy,” said resident Steve Schaeffer of the landlords in a press release. “I no longer feel safe or secure in my apartment, feeling they will do anything to get me out.” Elected officials at the state and city level joined the rally and said, having seen the premises and poor living conditions, there should be steeper fines against landlords for such behavior.