Success Story

LANDLORD/TENANT

How to stop a Billion-Dollar Landlord from “gaming the system” of Rent Control & Stabilization. 09/30/2015

One million NYC apartments have their rents controlled by law.  An apartment with a market value of $3,000 might be controlled by law to only $1,000.  A giant corporation saw an opportunity to game the system. The corporation sought to raise the regulated rents to $2,000, at which point the regulations would be lifted, and they could be rented for market value, at $3,000.  But first, the apartments needed to be vacated.

Ingredients?  A little paint, and a lot of pressure.

The pressure came first.  The apartments were in dreadful condition.  Some tenants fled.  Any tenant that filed a complaint with the city, or withheld his rent in protest, would find two burly men at his door early in the morning, asking “Are you the fellow that complained?”  If that didn’t work, an eviction action quickly followed.  Many tenants, unable to afford a lawyer, would leave.

Then came the paint.  A landlord can renovate, then add 1/40th of the cost to the new rent.  So the Landlord splashed on a little spackle and paint, invoiced it for $40,000, added $1,000 to the rent, and now the official rent reaches $2,000 – voila, deregulated!

Our attorneys helped put a stop to the scam.  First, we joined forces with a non-profit and a law firm that was pursuing class action against the Landlord.  Tenants with an imminent eviction were referred to us. In court, we alerted the judges to the scheme.  The Landlord sought to force the tenants to pay their attorney’s fees, under a one-way provision of the lease.  We turned the tables, citing a law that automatically gives the tenant the same right.

We kept the tenants in their rent-stabilized apartments, and the proper legal rate they could afford.  And we forced the Landlord to pay the tenants’ attorney’s fees, so the tenants had no expense out-of-pocket for asserting their rights.