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In 2011, New York State enacted the greatest expansion of rent regulations in 40 years. In 2012, to increase compliance with these laws and further protect rent-regulated tenants, the Tenant Protection Unit (TPU) was created to act as a proactive law enforcement office within New York State Homes and Community Renewal. The TPU preserves affordable housing by detecting and curtailing patterns and practices of landlord fraud and harassment through audits, investigations, and impactful legal actions. The TPU also encourages compliance by informing tenants and owners of their rights and responsibilities under the rent regulation laws.
The 3 Units of the TPU
The TPU is comprised of three units:
The Audit/Investigatory Unit determines which landlords to audit and investigate through research, constituent outreach, and risk assessments to assure compliance with New York’s housing laws and regulations. The Audit /Investigatory unit conducts comprehensive audits, investigations and inspections to detect and determine potential landlord illegality, misrepresentations and fraud. The unit consists of auditors, investigators, and housing inspectors who collaborate with the legal and forensic units to strategize and develop a course of action to assure compliance with and enforce New York’s rent laws.
The Legal Unit works with the Audit/Investigatory Unit to proactively prevent violations of housing laws and root out fraud that impairs the rights of rent regulated tenants thereby diminishing New York’s affordable housing stock. TPU’s attorneys analyze investigations for fraud, harassment and other illegality. TPU’s attorneys enforce New York’s rent regulation laws and seek injunctive relief through negotiated settlements or litigation. The Legal Unit educates tenants on their legal rights and collaborates with community and tenant advocacy groups to consolidate efforts to end tenant harassment and other unlawful activity.
The Forensic Analysis Unit provides the necessary information to support new and ongoing audits and investigations through analyses, reports, and dashboards. Information is sourced both internally from internal agency data as well as some external sources. The Forensics Team has implemented a data warehouse containing ten years of HUTS rent data, creates ad hoc reports for the Deputy Commissioner as well as other units for analysis of particular buildings and owners, and supports the Tenant Protection Unit (TPU) Individual Audit Improvement (IAI) initiative by identifying owners/buildings/apartments to audit. In addition, the unit maintains the data collection activities and monitors current and future performance measures.
- A joint investigation by the office of NYAG and the TPU, found that Raphael Toledano, founder of Brookhill Properties, has engaged in a pattern of fraudulent and illegal conduct throughout his time as a landlord and developer. Under the terms of the settlement agreement, Toledano will have to pay $3 million in damages and penalties, his real estate business will be supervised by an Independent Monitor, will not be allowed to have any direct contact with tenants and will be required to hire an independent management company for any of his properties. If Toledano violates the terms of the agreement, NYAG will seek a lifetime bar against his further participation in the real estate industry as well as a suspended judgment of $10 million.
- The State reached a $250,000 settlement, based on a TPU investigation, with Chinatown-based landlord, Marolda Properties, Inc., and 10 related LLC’s, for harassing tenants and engaging in a business model that tried to unlawfully force rent-regulated tenants out of their homes. The Asian-American tenants, among them seniors and families, many who have spend decades in their apartments, were threaten with eviction in Housing Court for allegedly living elsewhere when there was clear evidence that they lived, worked, and contributed to the growth of the community. The agreement is the result of investigations by the TPU into Marolda’s business practices that were referred to the NYAG office and covers nine rent-regulated buildings on the Lower East Side of Manhattan.
- TPU partnered with the Attorney General to file a lawsuit against Zara Realty Holding Corp., its principals, and affiliated entities for repeatedly violating Rent Stabilization Laws and harassing tenants at their Queens apartment buildings. Zara Realty owns and manages at least 2,500 rent-stabilized apartments in 38 buildings in and around Jamaica, Queens, have taken advantage of their tenants, who are largely immigrant middle and low-income families, by charging them illegal fees and rents, and requiring that they sign illegal leases.
- In 2018 alone, TPU continues to build upon its progress of preserving affordable housing and protecting tenants. The TPU’s Rent Registration Initiative successfully recaptured more than 11,600 units (totaling over 74,000 units) and returned close to $500,000 in overcharged rent (totaling close to $5 million) to tenants who did not know they were paying an unlawfully high rent. The Legal Division continues to investigate tenant harassment and other illegality throughout New York State and is working toward relief for large classes of rent-regulated tenants.
- Settlement agreement with All Year Management and the Governor’s Tenant Protection Unit places the Brooklyn based landlord under an independent monitor for 3 years, requiring All Year Management to immediately make repairs across its entire portfolio of approximately 500 rent regulated apartments or face fines. The settlement comes as a result of a TPU investigation which revealed that All Year Management systematically ignored tenants’ request for repairs, failed to provide tenants with the proper rent regulated lease agreements, and failed to register its regulated buildings with the agency as part of a wide-reaching effort to aggressively harass tenants.
- With the assistance of TPU’s investigation, the NYS Attorney General’s Office, on October 23, 2018, filed a civil lawsuit against Ram and Eldad Cohen, with their real estate company ERC Holding, LLC for allegedly engaging in a fraudulent scheme to avoid paying $479,000 in property taxes, manipulate tenants’ leases, providing fraudulent information to government agencies, including DHCR, and artificially inflating the sale price of the rent-regulated building located at 71-44 160th Street, Fresh Meadows, NY.
- TPU issued a Cease and Desist letter to an Inwood landlord who was issuing unlawful lease riders to 140 tenants in two of their buildings. TPU demanded that the landlord stop using non-conforming riders and ensured that they provided new, lawful riders to their rent stabilized tenants.
- According to a managing member of a corporation that invests in and owns multi-family homes, it seems that, at least to some degree, increased oversight of rent regulation is having an impact on the real estate investment sales market. The cause of the impact may be specifically due to the enforcement activities of the TPU involving audits of buildings, recent criminal convictions of landlords, and a $500,000 settlement with an owner.
- In 2017, TPU built upon its progress of preserving affordable housing. The TPU’s Rent Registration Initiative successfully recaptured more than 5,600 units (totaling over 62,000 units) and returned more than $1.1 million in overcharged rent (totaling approximately $4.35 million) to tenants who did not know they were paying an unlawfully high rent.
- The Governor’s TPU, along with the other members of the Tenant Harassment Prevention Task Force, reached a historic settlement with ICON Realty Management, ensuring that the landlord provide safe living conditions for hundreds of tenants living in its buildings. The Settlement Agreement was the first joint resolution for the Task Force, which was formed to share real-time resources and information and to allow members to ensure comprehensive relief for tenants. The settlement requires ICON to pay $500,000 in penalties, fees, and costs, to hire a third-party administrator to monitor its compliance with the AOD, to overhaul its policies and procedures, and to ensure that future construction work is undertaken in a lawful and safe manner.
- Crown Heights landlord Daniel Melamed and his corporation were found guilty of three counts of Unlawful eviction of rent stabilized tenants. TPU made a criminal referral regarding Melamed to the New York Attorney General after taking part in a joint task force inspection of 1578 Union Street in Brooklyn and found evidence that Melamed used construction and deprivation of services in an attempt to get rent stabilized tenants to give up their apartments. In addition to providing relevant agency documents and filings to the Attorney General, TPU also provided testimony at the Grand Jury proceedings and the criminal trial.
- As a result of a TPU investigation and subsequent referral to the New York Attorney General (NYAG), Steven Croman, owner of 140 apartment buildings throughout Manhattan, pled guilty to fraudulently refinancing loans and committing tax fraud as part of a long running scheme to push rent-regulated tenants out of their homes. Croman falsely listed rent-regulated units as market rate units in order to obtain larger loan amounts when his plan to displace rent-regulated tenants failed. Under the terms of his plea, Croman will serve one year of jail time on Rikers Island and pay a $5 million tax settlement. This is the first conviction based on a referral by the Governor’s TPU that has resulted in a landlord being sentenced to serve jail time.
- New York State Supreme Court Justice Richard Velasquez dismissed the lawsuit filed in 2014 by owners and owner associations challenging the creation of the TPU and the 2014 amendments to the rent regulations. The Court held that by the virtue of the RSL, the New York State Division of Homes and Community Renewal (DHCR) has the independent authority to investigate overcharges as well as to delegate responsibility by and among its staff and deputies. Accordingly, the creation of the TPU was in accordance with DHCR’s enforcement authority under the Rent Stabilization Law. The Court further held that because the investigation leads to the filing of a complaint before the Office of Rent Administration, where an order is then issued, the claim that the investigation denies owners’ due process is not sustainable. In regards to the 2014 Code amendments, the court held that these amendments by DHCR were in conformance with the statute’s mandating that the regulations “protect tenants and the public interest” as well as being consistent with court decisions both with respect to DHCR’s rule making authority and court decision on each specific subject matter.
- After a referral from the NYAG, the TPU conducted an audit and found that a recently purchased Queens building was receiving a 421-a tax benefit and was in violation of numerous provisions of the RSL and RSC. Based on the investigation, the owner was offered an opportunity to enter into a TPU Corrective Action Plan to remedy violations of the RSL and RSC. From the Corrective Action Plan, the owners of the 9-unit 421-a building (i) returned $5,700.00 in excess security deposits to tenants, (ii) corrected the 2016 legal rent for their units, (iii) issued new rent stabilized leases and appropriate lease riders to tenants, (iv) began working to obtain a Final Certificate of Eligibility as a rental building from HPD and (v) submitted an Owner’s Affidavit of Compliance to TPU. The owner timely complied with the TPU’s Corrective Action Plan and the TPU investigation was closed without charges.
- As a result of a TPU investigation and subsequent criminal referral, on April 6, 2017, the NYS Attorney General’s Office and the members of the Tenant Harassment Task Force announced that Dean Galasso, a NYC landlord with multiple properties in Manhattan and Queens, was indicted on six felony charges stemming from an alleged scheme to fraudulently obtain a multi-million-dollar mortgage to finance the purchase of 43 Essex Street in Manhattan.
- In 2016 alone, TPU has successfully recaptured another 8,963 units (totaling over 56,000 units) and returned more than $1.3 million in overcharged rent (totaling $3.25 million) to tenants who did not know they were paying more than required by law.
- The enforcement activities of the TPU and the Brooklyn DA’s Office led to guilty pleas for notorious Brooklyn landlords, Joel and Aaron Israel of JBI Management Inc. Joel and Aaron Israel, along with several corporate defendants, pled guilty to first-degree scheme to defraud and multiple counts of unlawful eviction for unlawfully evicting rent stabilized tenants, illegally destroying their apartments and making them uninhabitable as part of a scheme to collect significantly higher market-rate rents.
- In the latest enforcement action under the Real Estate Tax Compliance Program, a joint initiative of the TPU, the Attorney General, and HPD to ensure building owners receiving 421-a benefits are in compliance with the law, HPD issued letters notifying owners of 178 residential buildings – with a total of 1,400 rental apartments – that their 421-a tax benefits will be revoked retroactively, if they do not comply with the requirements of the 421-a program, including registering their apartments as rent-regulated.
- After an investigation initiated by the TPU in 2014, the Governor and the Attorney General announced a lawsuit against Marolda Properties, Inc. and associated landlords for allegedly engaging in deceptive practices and coercion, primarily through filing frivolous lawsuits, as a means to harass Asian-American tenants out of their rent-regulated apartments located in Chinatown and the Lower East Side.
- As a result of a TPU audit of a Downtown Brooklyn building receiving 421-a tax benefits, the building’s owner agreed to refund over $250,000 in rent overcharges to 60 unsuspecting tenants. In addition to crediting the tenants’ rents, the owner was required to amend its registrations on file with DHCR and issue amended leases to its tenants.
- TPU was asked to assist the New York Attorney General (NYAG) in an ongoing investigation of Steve Croman, owner of 140 apartment buildings throughout Manhattan. After reviewing records and interviewing tenants, the TPU made a formal criminal referral to the NYAG. On May 9, 2016, the NYAG announced a 20 count indictment of Croman, which includes charges of Grand Larceny, Criminal Tax Fraud, and Falsifying Business Records, with many of the charges based in part on the buildings' rent rolls provided by TPU.
- During the last four years, the TPU has successfully returned 50,000 improperly deregulated apartments in NYC to rent regulation and restored more than $2.25 million in overcharged rent to tenants.
- TPU, working with the AG's Office and State Senator Jeffery Klein, negotiates re-stabilization of 82 apartments with Bronx landlord.
- TPU announces an award of over $118,000 to a tenant in White Plains, NY whose landlord claimed a significant rent increase from one year to the next based on an IAI but did not substantiate the work. This included almost $65,000 in assessed treble damages.
- Working with its partners in government, the TPU was able to compel a Bronx landlord to return 82 units to rent regulation and provide rent stabilized leases going forward to affected tenants while addressing their concerns.
- In 2015 alone, TPU recaptured another 11,433 apartments, bringing the total units returned to rent stabilization to over 47,000, preserving the affordability of those units.
- TPU launched a major initiative that uncovered the illegal removal of central heating systems in over two dozen rent regulated buildings affecting 145 tenants. Landlords will be ordered to make the necessary steps to rectify their illegal acts, including making a formal application to the ORA, seeking permission to modify their building’s heating/hot water service and implementing a permanent rent reduction for the regulated tenants. Prior to this proactive initiative, the agency would not act on this type of issue without a tenant complaint.
- Three months after the launch of the Real Estate Tax Compliance Program, the TPU, NYS Attorney General and the NYC HPD announced that 111 buildings encompassing over 1,800 units will be registered as rent stabilized with every tenant notified of their rights under the Rent Laws. Going forward, for owners that elected not to participate in the compliance program and are depriving tenants of rent stabilized leases, TPU will begin enforcement actions and the City Department of Housing Preservation & Development will commence proceedings to ensure those remaining landlords comply.
- TPU, the State Attorney General’s Office (AG) and NYC Housing Preservation and Development (HPD) join forces to form a Real Estate Tax Compliance Program targeting 194 buildings that are receiving a partial property tax exemption under 421-a and violating rent registration requirements of the Real Property Tax Law and the Rent Stabilization Law and Code. Working with the AG and HPD, joint letters were sent to owners who are not abiding by rent regulation or co-op-condo laws and failing to register their units – giving them a one-time opportunity to cure the violations without penalty. The program will ensure that these units are properly registered and further protect rent-regulated tenants.
- TPU served a comprehensive subpoena on an East Village landlord who has allegedly engaged in the harassment of Spanish-speaking tenants in order to force them out of their rent-regulated apartments. The subpoena seeks to examine the patterns and practice of the owner, the abusive behavior of his agents, the intimidation of Spanish-speaking tenants and the flagrant violations of the rent laws.
- As a result of TPU’s IAI Initiative, TPU returned $67,000 to dozens of tenants in a Downtown Brooklyn building whose landlord was receiving a 421-a tax abatement. After receiving the TPU’s initial inquiry letter, the landlord admitted to errors in their rent calculations, agreed to reset the tenants’ rents, re-register the units with the DHCR, and provide new leases going forward at the new lower rent amount.
- As a result of a TPU criminal referral to the NYS AG’s office, the Tenant Harassment Prevention Task Force made its first arrest and took swift action to confront the alleged unlawful actions by a Brooklyn landlord. Commissioner James S. Rubin, Attorney General Eric T. Schneiderman and Mayor Bill de Blasio announced the indictment of the landlord for allegedly created hazardous building conditions to harass and force our rent regulated tenants in Crown Heights.
- Notorious Brooklyn landlords, Joel and Aaron Israel, who were subpoenaed by TPU in April 2014, are indicted by the Brooklyn DA’s Office for destroying their tenants’ apartments in Bushwick, Greenpoint and Williamsburg and trying to force families out of their homes. TPU’s information about the landlord’s egregious acts and violations of the rent regulations laws helped serve as the basis for the Brooklyn DA’s criminal indictment.
- Based on TPU’s rent registration initiative, TPU has returned 40,000 apartments back to rent stabilization, preserving the affordability of those units.
- Building on TPU’s individual successes, collaborated with various City agencies and the Attorney General to form the Tenant Harassment Prevention Task Force - a joint task force to address the deregulation and destruction of rent-regulated apartments in North Brooklyn and other neighborhoods throughout the City.
- As a result of a TPU audit and investigation, an Upper West Side landlord who was receiving a J-51 tax abatement agrees to complete a review of the rents for his building, a voluntary adjustment of the rents and to provide all tenants with rent stabilized leases going forward.
- In 2014 TPU recaptured another 9,000 apartments totaling over 36,000 apartments (since 2012) that landlords had improperly deregulated, the largest recapture/re-stabilization by any Governor, saving the state over 2 billion dollars in construction and rehabilitation costs.
- The East Village landlord who received an August 2014 TPU “Cease and Desist” letter instructing the building’s tenants to vacate their homes based on demolition without filing the legally required documents rescinded his unlawful letter to his tenants and agreed to a revised schedule to rehab that building that accommodates the tenants needs.
- The East Harlem landlord who received a July 2014 TPU “Cease and Desist” letter for harassing a long-term tenant based on her immigration status acknowledged wrongdoing on the part of an employee, agreed to prevent any further harassment and offered to refund overcharged rent.
- TPU starts new proactive audit initiative on apartments in transforming neighborhoods around New York City.
- The state announces the signing of a settlement agreement with a Crown Heights/Flatbush landlord who was subpoenaed in April 2013 for engaging in a pattern of abusive behavior towards his residents and flagrant violation of rent laws.
- TPU announces the return of over $50,000 to three tenants in the Chinatown/Lower East Side neighborhood of Manhattan whose landlord claimed significant increases in rent from one year to the next based on IAIs but could not substantiate the work.
- The TPU serves a “Cease and Desist” letter on an East Village landlord who sent a letter to his building’s tenants requiring them to vacate their homes based on demolition without filing the legally required documents.
- The state announces subpoena served on a Chinatown landlord allegedly harassing primarily elderly Asian-American tenants.
- TPU investigators, auditors and attorneys have recaptured more than 32,000 units that landlords had failed to register, restoring them to rent regulation, saving the State over a billion dollars in rehabilitation and reconstruction costs.
- The TPU serves a “Cease and Desist” letter on an East Harlem landlord harassing a long-term tenant based on her immigration status.
- TPU initiated audits have resulted in restoring more than $600,000 in overcharges to tenants who did not know they were paying more than required by the Rent Laws.
- TPU assists New York State Homes and Community Renewal Housing Finance Agency in the eligibility determination of potential landlords for entitlement to state loans/grants/tax credits, by investigating and vetting a potential landlord's financial soundness and mortgage holdings for signs of overleveraging within their portfolios or allegations of increased tenant turnover through harassment.
- The state announces subpoena served on Brooklyn landlord alleged to have systematically harassed rent-regulated tenants.
- The TPU has returned over $220,000 to unsuspecting tenants in rent overcharges.
- The TPU has returned more than 28,000 apartments to rent stabilization.
- The state announces unprecedented agreement with Castellan Real Estate Partners/Liberty Place Property Management to end harassment and compensate tenants, including many who are Spanish speaking or immigrant, in 1,800 NYC apartments.
- The TPU attends tenant meeting in Brighton Beach to address allegations of harassment of seniors in large rent regulated building, and ensures that tenants receive renewal leases.
- The TPU returns over $100,000 to unsuspecting tenants in rent overcharges.
- The TPU subpoenas a Brooklyn landlord accused of harassing long-time tenants and illegally raising rents in numerous apartments.
- The TPU returns over 20,000 units to rent regulation based on its rent registration initiative.
- The TPU subpoenas Castellan Real Estate Partners/Liberty Place Property Management in response to allegations of harassment and intimidation of tenants.
- The TPU settles with one of the subpoenaed landlords who agreed to refund an unsuspecting tenant who was being overcharged - the first action of its kind under the state model.
- The TPU launches more than 600 additional IAI audits in response to significant and unexplained rent increases reported by owners.
- The TPU returns over 15,000 units to rent regulation based on its rent registration initiative.
- The TPU issues the agency’s first ever multiple subpoenas to non-compliant owners (achieving 100% compliance).
- The TPU returns over 10,000 units to rent regulation based on its rent registration initiative.
- The TPU expands its investigations with the largest single audit of owners in history of the agency.
- The TPU launches its first historic initiatives involving rent registration and IAIs.
- The state creates the TPU.
TPU Major Initiatives
TPU Major Initiatives
Rent Registration Initiative
Based on internal data, TPU determined that since 2009, thousands of units that had previously been registering with HCR, had disappeared from the rent registration logs without notice or explanation. TPU therefore took a proactive approach and notified owners who had failed to register their units since 2009, and required them to either re-register or provide explanation as to why the units were no longer registered. As a result, the TPU has recaptured close to 90,000 apartments that have been re-registered and added back to the rent stabilization rolls (a historic figure), saving the State $2 billion dollars in construction and rehabilitation costs for the replacement of affordable rental housing, and allowing the agency to monitor the rents for those apartments going forward.
Individual Apartment Improvement Audits (IAI)
In 2012, the TPU launched the first ever audits of owners who filed IAI increases significantly raising the rent upon vacancy within the last two years. In addition, letters were issued to owners who had provided inadequate responses to the TPU’s initial audit and request, and – for the first time – owners who failed to respond were served with subpoenas for compliance. As a result, owner groups have openly acknowledged heighten level of scrutiny of their business practices and have urged their members to update their business practices accordingly. Further, audited owners have, for the first time, entered into settlement agreements with the TPU agreeing to return money to tenants for overcharges, revise tenant leases and re-register tenant apartments with HCR under the current rents.
The Unit’s actions, along with the strengthening of the rent laws, have turned the deregulation tide, with far fewer units now leaving the system.
Latest TPU News
- Attorney General James And Governor Cuomo Announce Lawsuit Against Queens Landlord For Violating Rent Stabilization Laws And Tenant Harassment
- Notorious Landlord, Raphael Toledano, To Pay $3 Million, Other Penalties For Harassing NY Tenants
- A.G. Underwood Files Lawsuit Against Queens Landlords For Evading Over $470k in Property Taxes and Deceiving Tenants
- Rent-regulation crackdown is “definitely” impacting multifamily sales: Treetop’s Mermelstein
- Governor Cuomo, A.G. Schneiderman, & Mayor De Blasio Announce Settlement with Major NYC Landlord to End Tenant Harassment and Hazardous Living Conditions
- Attorney General Schneiderman Announces Guilty Verdict For Brooklyn Landlord Who Harassed Rent Regulated Tenants
- Statement from Governor Andrew M. Cuomo Regarding State Supreme Court Ruling Upholding the Governor's Tenant Protection Unit and Rent Law Reforms
- A.G. Schneiderman Announces Guilty Plea Of Major NYC Landlord Steven Croman
- A.G. Schneiderman Announces Indictment Of NYC Landlord Dean Galasso For Mortgage Fraud