Greedy New York City Property Owners Face Multiple Class Action Lawsuits

Jacob Greene
Published Sep 15, 2023

New York City landlords and property managers who represent the five boroughs are getting hammered in class action lawsuits from their tenants. The Housing Rights Initiative helped tenants file 55 J-51 lawsuits since 2016. Many of these tenants are from working-class or low-income families.

Residents should see $200 million in rent arrears as compensation to account for the failure of the landlords to follow through on their duties. Many of these cases are settling out of court with building owners giving plaintiffs six-figure settlements.

J-51 Benefits

The City of New York awarded the J-51 benefits to landlords to upgrade residential buildings. The fund was earmarked for tenants who lived in rent-controlled buildings. The J-51 fund was back compensation for property tax benefits.

Instead of landlords using the funds to renovate buildings and perform repairs, they destabilized units and raised the rent to reflect the current market rate for New York City. Perchance, city and state officials allowed landlords and property managers to destabilize the apartment units since there wasn't any official oversight of the program.

Aaron Carr, the executive director of the Housing Rights Initiative, said that "Tenants are shocked that landlords are receiving benefits and not giving back to affordable housing."

Clermont-York Associates

Present and former residents who lived at 444 E. 82nd St. are splitting an $11 million class-action lawsuit settlement from their property owner, Clermont-York and Associates, who is also affiliated with the Feil Group. The Feil Group owns several deluxe properties throughout the USA that are worth over $7 billion.

Area landlords are in an uproar about upcoming future multi-million-dollar settlements. Mitchell Posilkin, who is representing property owners in New York City, said that "What is important to understand is that tenants who are bringing these cases entered into their leases and are now looking for a windfall."

This is not just about low-income tenants, as tenants from upscale apartments are also filing suit. The 2009 state court appeals ruling said that property owners who receive the J-51 tax benefit must not deregulate their apartments.

Posilkin countered these arguments by saying that "Rental history for each apartment is unique, and often people entered into their agreements agreeing to pay market rent."

New York City Housing Authority

Tenants have accused the NYCHA of creating uninhabitable conditions for its 400,000 residents across the five boroughs. Berg & Androphy filed a lawsuit on Feb 27, 2020, accusing NYCHA of creating unsanitary conditions by refusing to fix a plethora of problems for molds, leaks, gas line shutdowns, rodents, and bed bug infestations. NYCHA is slow to address tenants' repair issues. Most of the time, tenants' requests go unanswered.

According to the details of the complaint, "Although these developments were, when built, models of affordable public housing, NYCHA has failed in its responsibilities to tenants and allowed the NYCHA developments to fall into disrepair, rendering such housing unsanitary, dangerous and, at times, uninhabitable."

Lawsuit Members

Members of the class-action lawsuit include individuals who have lived or are presently living in any of the NYCHA properties within the last six years. Three individuals are listed as plaintiffs: Claresa Ward, Ricardo Reed, and Latisha McGriff.

Case in point, Latisha McGriff has lived in the Red Hook West complex for over 11 years. She had heavy mice infestation along with a leaking roof and front door issues - she kept contacting her landlord for a resolution to no avail.

McGriff paid for exterminators to rid her apartment of the rodents. It didn't entirely stop the issue. She subsequently bought a cat to take care of the mice. That didn't work either since she had five or six mice a day entering her apartment; the cat couldn't keep up. She paid for the other fixtures herself out-of-pocket.

Privatization and Settlement

The NYCHA is preparing to address these concerns. They haven't received the filed complaints yet. The agency stated that the cost of repairs has increased from $32 billion in 2018 to $40 billion for 2020. It simply cannot keep up.

Recently, NYCHA agreed to a consent decree for a 2018 lawsuit that stated NYCHA had difficulties maintaining adequate living structures and keeping up with the required federal inspections.

However, the NYCHA is preparing to take some of their buildings into private management. The agency recently agreed to a deal to allow L & M Development Partners, Settlement Housing Fund, and Hudson Companies management over 5,908 apartment units for seven main complexes. The deal is worth $1.5 billion.

Jenny Kim, who is representing the plaintiffs, stated that they are looking at all the encompassing maintenance issues for the NYCHA. "It is everything that has caused our clients to live in indecent, unsanitary and unlivable homes."

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