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Queens Chronicle

State sues landlord in tenant harassment

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Posted: Monday, March 4, 2019 3:56 pm

New York State Attorney General Letitia James has filed a civil suit against one of the largest residential landlords in Queens.

In a joint statement with Gov. Cuomo issued Friday, James accuses Zara Realty Holdings of Jamaica of repeatedly violating rent stabilization laws and harassing tenants at its Queens apartment buildings.

James said Zara, which owns and manages “at least 2,500 rent-stabilized apartments in 38 buildings in and around Jamaica, Queens,” has taken advantage of their tenants, by charging them illegal fees and rents, and requiring that they sign illegal leases.

Zara’s attorneys have denied the allegations in an email to the Chronicle.

“For years, Zara Realty has engaged in an egregious pattern of tenant harassment and exploitation,” James said. “Evading our rent regulation laws and forcing low-income tenants to pay exorbitant fees for fake services is deception of the worst kind. This is a notice to all unscrupulous landlords who seek to hurt New Yorkers, we will not tolerate this behavior.” 

In the 52-page complaint, James alleges that Zara or affiliated entities “have spent years evading and circumventing rent stabilization laws in order to scam tenants out of thousands upon thousands of dollars” by charging new tenants illegal key money, room reservation fees, advanced rent, and excessive security deposits.

The state alleges tenants who continue to reside in Zara Realty buildings are often illegally charged late fees and fees for services to which they are entitled to for free such as regular apartment maintenance; and that Zara Realty regularly charges tenants moving into its buildings and tenants moving apartments within the same building a broker’s fee under the name “Jasmine Homes, LLC,” a company controlled by the Subraj family, though the Rent Stabilization Code prohibits landlords from collecting a broker’s fee.

 In addition, James alleges, Zara Realty also charges tenants security deposits that equal three to four times the monthly rent, though the Rent Stabilization Code allows a landlord to collect only one month’s rent as security. 

 The complaint also alleges that when Zara Realty takes over a new building, it changes the building’s front door lock and requires that tenants pay fees of up to $200 per key for the new lock. It also requires that tenants submit to background checks or sign new leases if they want a key. The investigation allegedly found that some tenants paid more than $11,000 simply to move into their rent-stabilized apartment.

Zara Realty’s attorneys, Niles Welikson and Randi Gilbert of Horing Welikson & Rosen said Zara follows all laws and has cooperated fully with the TPU during the investigation.

“Zara Realty was founded by immigrants who came to this country penniless and achieved the American Dream,” they said in an email to the Chronicle. “Today, it remains a family-run business based in the same community of Jamaica, Queens, where it was founded.”

They said Zara typically purchases older buildings, “many of which have a long history of neglect by prior owners, and invests in new infrastructure — including boilers, windows, facades and roofs, security systems, renovations to individual units and other amenities — all in service of creating high-quality affordable housing for tenants.”

They stated that the turnover rate among rent-regulated tenants in Zara buildings is low and the company has never sold a building it purchased in Queens.

 “For more than a year, Zara has offered the Tenant Protection Unit and the Division of Housing and Community Renewal its full cooperation in resolving any issues deemed potentially unlawful involving rent regulation,” they said. “The allegations contained in this suit, many of them factually inaccurate, will be vigorously contested. Many of them also deal with highly complicated legal issues that are subject to various interpretations under the law, including conflicting judicial opinions.”

 They said the terms of the leases Zara offers its tenants are in compliance with the law, as are any late fees, or costs for extra keys, which provide the high level of security Zara’s tenants expect and deserve. As for major capital improvements, they wrote Zara is proud to invest in its properties for the benefit of tenants and all MCIs are approved by DHCR itself.

“Zara is committed to continuing to work to ensure that the organization provides high-quality, safe and modern affordable housing for their thousands of tenants,” their statement concluded.

Much of the evidence was gathered by the Tenant Protection Unit of the state’s Division of Homes and Community Renewal. The TPU was signed into law by Cuomo in 2012.

Greg Frewer, acting deputy commissioner and bureau chief, discussed some of the mechanics of the investigation in a telephone interview with the Chronicle on Friday.

“We received numerous complaints from the community, and requests from advocates from the community to intercede,” Frewer said. ‘We worked with tenants. A lot of research went into drafting the complaint. ... This isn’t something where you just snap your fingers — there’s no instant coffee. This requires a lot of work.

Frewer said in such cases the landlord typically drafts an answer to the complaint and the state then acts accordingly.

“What does Zara need to do? Stop its predatory behavior,” Frewer said. “We’re still in contact with tenants, still in contact with advocates, so this is still live, and we’ll proceed the way we always do.”

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