The Rosenberg & Estis team representing Whitehouse Estates, Inc. included Howard W. Kingsley, Member, Jeffrey Turkel, Special Counsel, and Ethan R. Cohen, Member. Jeffrey Turkel and Ethan R. Cohen successfully briefed and argued the case in the Court of Appeals before Acting Chief Judge Cannataro and Judges Rivera, Garcia, Wilson, Singas and Troutman

The landlord had luxury deregulated 72 apartments in the East Side building while receiving a J-51 tax abatement. The Court found that he did not commit fraud by the manner in which he attempted to register and recalculate the rents for the 72 apartments after the Court of Appeals ruled in the 2009 Roberts case that such deregulations were not permitted by the rent laws.

In a precedent-setting decision, the New York State Court of Appeals found that the Appellate Division misinterpreted the historic Regina v DHCR ruling, which only permitted a review of rental history outside a four-year lookback period where there was evidence of a fraudulent scheme to deregulate.

The Court of Appeals’ March 16 reversal of that decision held that fraud will only allow the four-year lookback period to be breached, and the punitive default rent formula to be used, where the alleged fraud taints the reliability of the base date rent.  The Court observed that the owner’s alleged fraud — its recalculation of the stabilized rents in 2011 and 2012 — could not have possibly tainted the rent paid on the October 14, 2007 base date. The Court also observed that the only alleged fraud that could trigger the default rent formula — which enables tenants to revert to the lowest regulated rent in the building — is a fraudulent scheme to deregulate apartments. This did not occur at 350 East 52nd Street, as registering apartments as stabilized, and recalculating legal rents, did not so qualify.

In 2021, the Supreme Court sided with the tenants of 350 East 52nd St., dramatically reducing rents in affected apartments by some 60 percent, a decision that ultimately forced the owner into bankruptcy. “That decision has been completely reversed by the Court of Appeals decision,” said Howard W. Kingsley.

The Court of Appeals decision paves the way for the landlord to recover payment of the actual legal rents over the many prior years– some of which haven’t been paid for years and amount to hundreds of thousands of dollars. It may also stave off the foreclosure of 350 East 52nd St.

“This is a tremendous result for our client, who has been driven into bankruptcy by an erroneous decision by the Supreme Court that dramatically lowered the rents,” said Jeffrey Turkel.

On remittal, Supreme Court will determine the rents for each apartment in the class action in accordance with the Court of Appeals decision.  To do so, the Court of Appeals held that, instead of the default formula, “the rent ‘actually charged on the base date’…should be used and rent increases legally available to [the landlord] pursuant to the RSL during the four-year period should be added.”  The Court explained that “[o]n remittal, that assessment must be made for each apartment,” to determine the legal rents and how much each tenant owes the landlord.  According to Kingsley, that could easily amount to hundreds of thousands of dollars in unpaid rent, but there may be instances where there are minor overcharges over the many years.

The case dates back to 2011 when a group of tenants filed a lawsuit alleging Koeppel overcharged on rent while receiving the J-51 property tax break. Raising rents ultimately allowed the landlord to remove some apartments from rent regulation under the old luxury vacancy deregulation rules. However, the following year, while the fallout of the controversial 2009 Roberts v Tishman Speyer ruling was being sorted out, the Court of Appeals decided that certain units couldn’t be removed from regulation, and landlords who had done so could not be retroactively penalized under certain circumstances.

In consultation with the DHCR – the state entity responsible for operating regulations – Koeppel immediately re-registered all of the apartments and offered tenants new stabilized leases at reduced rents. However, the tenants then filed the class action lawsuit, claiming on appeal that the landlord fraudulently recalculated the rents, and asserting that their rent should be calculated under DHCR’s default rent formula, which would have dramatically reduced their stabilized rents while at the same time increasing their overcharge claims.

Rosenberg & Estis attorneys argued that under the historic Regina v DHCR, the default formula could only be used when fraud tainted the reliability of the base date rent and suggested a scheme to deregulate the apartments.

Turkel and Cohen successfully argued that nothing the landlord did in 2011 could taint the reliability of the accepted 2007 base date rents, such that there was no fraud and the default rent formula could not be used. In a written memorandum the Court noted, “Regina also held that ‘deregulation of [ ] apartments during receipt of J-51 benefits was not based on a fraudulent misstatement of fact but on a misinterpretation of the law [and so] a finding of willfulness is generally not applicable to cases arising in the aftermath of Roberts [and] [b]ecause conduct cannot be fraudulent without being willful, it follows that the fraud exception to the lookback rule is generally inapplicable to Roberts overcharge claims’” (Regina, 35 NY3d at 356 [internal quotations and citations omitted]).

The Court found that Koeppel’s original deregulation of the apartments was based on the same misinterpretation of the law and was not fraudulent. The landlord’s subsequent re-registering of the apartments under the oversight of DHCR was not fraudulent because it did not taint the reliability of the rents the tenants actually paid on the October 14, 2007 base date.

In reversing the lower court’s decision, the Appeals Court said the tenants failed to offer evidence that the base date rents were unreliable and failed to prove any fraud.

“Many tenants haven’t paid rent in the building for years, decimating the rent roll and forcing the property owner into foreclosure,” Kingsley said. “The court’s misinterpretation of the law substantially injured this property owner.”

“The owner was put in an impossible position by the DHCR, which told him he could deregulate units,” Turkel said. “The owner had no willful intent to defraud, and, in fact, had done his best to abide by the ever-shifting rules.”

The post <strong>Landlord wins legal fight with tenants over J-51 rent overcharges</strong> appeared first on Real Estate Weekly.

It is alleged that even though the defendants had been made aware of the deteriorating façade conditions that posed an immediate danger to the public, they failed to make necessary repairs and failed to install a sidewalk shed in front of the building to protect pedestrians from the unsafe façade conditions. The owners of 729 Seventh Avenue were first notified by the Department of the unsafe façade conditions in April 2019 and were subject to Department orders to immediately install a sidewalk shed in front of the building and start repairs. Leading up to the fatal façade collapse, the owners did not comply with these orders.

“Owning a building in our city comes with a straightforward legal responsibility to keep the property in a safe condition, and make repairs when needed,” said Buildings Commissioner Melanie E. La Rocca. “Ignoring this responsibility is completely unacceptable and will not be tolerated. Landlords should know that delaying required building maintenance will lead to consequences.”

Since Local Law 10 was first enacted in 1980, and later amended by Local Law 11 of 1998, New York City has required owners of buildings greater than 6 stories to retain a qualified licensed professional to examine the façades and exterior walls of those properties, and report the conditions they find to the Department once every five years for our review.

The post Criminal charges filed in 2019 fatal facade at 729 Seventh Avenue appeared first on Real Estate Weekly.

The agreement also establishes a fund for other workers who also experienced sexual harassment at the company.

An investigation into Trade Off, LLC and Trade Off Plus, LLC (collectively Trade Off) revealed a pattern of severe sexual harassment against female employees over the course of at least four years and retaliation against many of these workers when they complained about the harassment.

This marks the Office of the Attorney General’s (OAG) first agreement regarding sexual harassment in the construction industry, which has a purported history of sexual misconduct and gender discrimination in its workforce.

“All employees deserve to work in an environment where they are valued and respected and not subjected to harassment,” said Attorney General James.

“Today’s agreement will end Trade Off’s deplorable and unlawful treatment of its female employees and provide affirmative relief to the brave women who came forward. Sexual harassment will never be tolerated, not in construction and not in any other industry.”

The OAG’s investigation found that Trade Off, a company that provides non-union, general labor at construction sites, engaged in severe sexual harassment and retaliation against workers who were primarily women of color.

At least 16 women were harassed because of Trade Off’s failure to prevent or adequately respond to sexual harassment at its worksites. Additionally, at least 12 workers were fired after they complained of harassment against themselves or their coworkers.

Female employees reported quid pro quo harassment by managers demanding sexual acts for pay and overtime opportunities, physical and verbal harassment by male employees, and instances of managers and other workers sending explicit photos and videos.

Additionally, Trade Off managers failed to take adequate action in response to complaints, and in fact, repeatedly protected harassers from punishment.

In addition to the monetary compensation, as part of the agreement, Trade Off agreed to employ an outside monitor for three years, and will create a new, more complete sexual harassment policy subject to review by OAG, and report regularly to OAG regarding its implementation of policies and investigation of any future sexual harassment complaints.

“It’s important for me to be able to speak out and shine a light on the harassment that women in the construction industry encounter on a daily basis,” said Jaleesa McCrimmon, a former employee of Trade Off. “No one should be harassed and mistreated for trying to do their jobs. I thank Attorney General Letitia James and her team for understanding that, and for fighting hard to make a difference.”

“What I and other former employees of Trade Off went through speaks to the often sexist and abusive nature of the construction business,” said Tierra Williams, a former employee of Trade Off. “No industry should promote behavior that serves to demean women. I’m hopeful that this settlement puts every company like Trade Off on notice, and inspires women in the workplace to stand up against injustice. Thank you to Attorney General Letitia James for taking on this issue.”

This matter was initially referred to OAG by the Mason Tenders District Council/Laborers Local 79.

“We commend the Attorney General’s leadership in fighting back against harassment and retaliation in construction,” said Robert Bonanza, business manager for Mason Tenders’ District Council of Greater New York and Long Island. 

This case was handled by Assistant Attorneys General Michael O’Keefe Cowles and Jessica Agarwal under the supervision of Labor Bureau Civil Enforcement Section Chief Ming-Qi Chu, Deputy Bureau Chief Julie Ulmet, and Bureau Chief Karen Cacace. The Labor Bureau is part of the Division of Social Justice, led by Chief Deputy Attorney General Meghan Faux, and under the oversight of First Deputy Attorney General Jennifer Levy.

The post Women win $1.5M sex harass claim against construction company appeared first on Real Estate Weekly.

Calling it “as crucial to reopening the economy as face masks and contact tracing,” Kyle Strober, executive director of the Association for a Better Long Island (ABLI), said that, regardless of how stringent a business follows CDC disinfecting protocols, tests its employees, and monitors those who enter and exit its premises, it will be impossible to completely eliminate the threat of infection. 

Unless Congress acts, Strober said business owners will be liable from employee, visitor, and/or customer lawsuits should they contract the virus.

In a letter to Congressional leadership the ABLI noted, “We believe the business `liability shield’ may ultimately be a key determining factor in how, or even whether, America’s economy begins to rebuild in the next weeks and months.  Until there is a vaccine, experts have stated that we will continue to live in a pandemic vulnerable world.  As a result, individuals may continue to contract the virus, either from friends, family, colleagues, or passing strangers.  Stores and companies that reopen, many which have no other choice in order avoid bankruptcy or to prevent closing altogether, could unintentionally allow the spread of the virus.”

“Already, a cottage industry of `COVID-19 employee lawsuits’ is beginning to emerge, severely exposing business owners who are trying to recover and retain their employees.  This threat will make businesses, large and small, think twice about reopening and/or whether it is even worthwhile to continue operations.  As a result, we anticipate hundreds of businesses and tens of thousands of jobs could be lost on Long Island and countless other areas across the nation.  This disturbing but likely scenario makes it critical to address this issue now if our nation is to successfully restart our economy,” Strober warned.

Long Island is located within the epicenter of the COVID-19 pandemic, with approximately 70,000 positive cases and over 3,000 fatalities. 

Currently, New York State is in the process of developing a phased plan to restart the state’s economy, consulting with health officials, business experts, and elected officials and targeting a date in early June.

Without legislation establishing a COVID-19 business liability waiver to protect and encourage businesses to restart our country’s economy, the ABLI said it fears the current economic wasteland that threatens America will last for a generation.

The Real Estate Board of New York has also backed the call for liability protections.

In a statement REBNY president James Whelan said, “As we re-start New York’s economy, we must address a number of issues.  First and foremost, we must re-open in a way that does not threaten the health of our people.  We also need to encourage businesses to restart their operations. That’s why REBNY joined other New York organizations to urge the State to enact necessary liability protections to prevent further damage to our economy and safeguard the livelihoods of hardworking New Yorkers.”

The call for liability protection comes as health and safety experts, worker advocates and labor unions call on Governor Cuomo to enact a New York Health and Essential Rights Order (NY H.E.R.O) to limit the spread of COVID-19 as the state takes steps to re-open.

Today, leading epidemiologist David Michaels joined the advocates to discuss how Cuomo can structure and implement an executive order to improve health and safety protocols in workplaces.

Organized by advocacy organization ALIGN, the briefing heard how more than two million frontline workers across the state must report to jobs in essential sectors where they risk exposing themselves, their families, and their communities to COVID-19.

“Many are still not receiving adequate PPE and work in facilities that do not practice social distancing,” said ALIGN in a press release. “Without increased protections, these workers are at risk of exposure to a second surge of COVID-19 in New York.”

The push for Cuomo to enact the NY H.E.R.O. comes as the Occupational Safety and Health Administration (OSHA) has refused to investigate any complaints from workers outside the healthcare industry.

“We must guarantee that all essential workers have the necessary protective equipment and legal protections they need to do their jobs safely and properly,” said Bob Master, Assistant to the Vice President, CWA District One. 

The post Employers want government to protect them from COVID lawsuits appeared first on Real Estate Weekly.

By Maria Rocha-Buschel

The Stuyvesant Town-Peter Cooper Village Tenants Association filed a lawsuit against property owner Blackstone last week in response to an attempt to deregulate more than 6,000 apartments. 

Blackstone is attempting to deregulate units that are currently under the J-51 tax exemption, which expires at the end of June, and increase rents on those apartments for leases renewed or starting in July or later. The private equity firm is arguing that the regulatory agreement Blackstone signed with the city in 2015 supersedes the rent laws the state legislature passed last June, but tenant advocates and local elected officials argued at a press conference in Stuy Town last Thursday that the rent laws abolished deregulation all apartments, regardless of previous agreements. 

“The new law is clear and unambiguous,” Tenants Association President Susan Steinberg said. “Blackstone Group is of the opinion that these pro-tenant reforms do not apply to them. We disagree. They cannot disregard state rent law and raise rents and deregulate units as if the law had never been changed.”

State elected officials at the press conference said that they were very specific when writing the rent laws that passed and that Blackstone was not interpreting the law as it was intended. 

“After dozens of hours of hearings and floor debate, the legislature overwhelmingly approved carefully-considered legislation last June to protect the long-term affordability of rent-stabilized housing and prevent the deregulation of units and a resultant worsening of the State’s homeless crisis,” Assemblymember Harvey Epstein said. “Despite being the wealthiest landlord in the world, Blackstone must also follow the law.”

Local elected officials argued at the press conference that deregulating the units would be a violation of the Housing Stability and Tenant Protection Act (HSTPA), which established that any apartment that was rent-regulated when the law passed on June 14, 2019, would remain subject to rent regulation. Since these units were protected by rent regulation when the law passed, they argued, deregulating the units would be illegal.

The lawsuit from the TA aims to protect the more than 6,200 rent-stabilized units that were illegally deregulated while the owners were receiving J-51 tax benefits. The J-51 program is a property tax exemption and abatement given to owners for renovating a residential building. 

The units Blackstone is attempting to deregulate include those occupied by original members of the Roberts v. Tishman Speyer class settlement, as well as the units occupied by tenants who moved in after the settlement. The landmark case established that thousands of apartments in STPCV were subject to rent regulation after previous owners illegally deregulated apartments in the 1990s and early 2000s while they were receiving J-51 tax benefits. 

The court ruled in 2009 that these apartments needed to be re-regulated and as a result of the case, 4,300 units were put back into rent stabilization after the ruling and almost 2,000 more have been re-regulated since then. 

The regulatory agreement that was signed in 2015 ensured that 5,000 units in Stuyvesant Town and Peter Cooper Village are permanently affordable, but the remainder of the units, which included Roberts tenants, were on a countdown to deregulation once the J-51 program expired. Rent increases on these units would be capped to 5% per year for five years starting in 2020, which is significantly higher than rent increases that have been approved by the Rent Guidelines Board in the last few years.

The Tenants Association, along with Steinberg and four residents, are named as the plaintiffs in the suit filed against Blackstone, the City of New York, the City Housing Development Corporation and the State of New York Homes and Community Renewal.

Although the city is named as one of the defendants in the lawsuit, the Real Deal reported the day after the press conference that the de Blasio administration has sided with the tenants in the case. 

“Rent reforms ushered in a new era for New York City tenants, providing greater security for families and strengthening neighborhoods,” a spokesperson for the mayor’s office said in a statement to the Real Deal. “The terms of the earlier litigation make clear that these homes are subject to the stricter rent laws and tenant protections and they must remain under those protections.”

In an email to residents on Thursday, StuyTown Property Services General Manager Rick Hayduk said that Blackstone has committed to not increasing rents beyond the Rent Guidelines Board threshold until the case has been settled. 

The post Stuyvesant Town tenants file lawsuit against Blackstone appeared first on Real Estate Weekly.

The decision came after a judge last month sided with neighbors opposed to the skyscraper who accused the owners of flouting zoning rules regarding partial lots to create the supertall.

But since then, the Department of Buildings continued to allow work on the nearly completed project and a brief memo the department issued on Monday clarified that a newly formed zoning lot may not consist of partial lots unless permission was obtained before the issuing of that memo. The New York City’s Law Department also filed a notice of appeal.

The DOB and the Law Department referred questions to City Hall, where a spokesperson said while the city was fighting the court decision, that doesn’t mean it endorses the frankensteined lots that the developers used to build so high.

“We closed the loophole that allowed the developers of 200 Amsterdam to legally gerrymander a 39-sided zoning lot to construct a luxury tower,” said mayoral spokesperson Jane Meyer. “Now, we are challenging the judge’s ruling that the building violated zoning laws. It is the city’s responsibility to fix flawed policy — not the Court’s — and we must appeal this decision because of its far reaching implications for how policy is shaped.”

Meyer added that while the developers managed to turn a 39-sided lot into a new zoning lot in order to erect one of the tallest buildings in the neighborhood, other owners shouldn’t get any ideas about trying this again in the future. 

The change, while in effect immediately, is not retroactive, according to City Hall.

Previously, developers were able to combine partial tax lots to create a new zoning lot, as was done with 200 Amsterdam. At this time, the city isn’t aware of how many projects this will impact but doesn’t expect that it will be a large number. 

Prior to the appeal, the developers had vowed to appeal the court’s decision themselves — and still plan to — saying it flew in the face of the prior DOB decision and a decision by the Board of Standards and Appeals to uphold it.

The 668-foot building topped out last September with prices for its 112 residences ranging from $2.6 million to $40 million.

In a written statement, the developers said, “We applaud Mayor de Blasio and the New York City Corporation Counsel for taking a stand against a legally flawed court ruling that seeks to apply a new policy, not adopted until after the court handed down its decision, retroactively to a project that has been already built, with zoning that has been approved and consistently upheld by the Department of Buildings and Board of Standards and Appeals, the city agencies with the highest authority on zoning.”

They added, “Zoning regulations should be interpreted and enforced lawfully and transparently through the proper administrative and legislative process. Without that, New York City’s economic growth will suffer at a time when the City is already facing a critical housing shortage. We will continue to vigorously appeal this ruling in partnership with the City and are confident that the facts and justice will prevail.”

Carlo Scissura, the CEO and president of The New York Building Congress, also said the city’s appeal was the sensible thing to do.

“New York is not strong without a strong building industry,” said Scissura. “The City’s decision to appeal the recent ruling on 200 Amsterdam is the right choice to protect our economy and New York’s reputation as a leader in building and development. The ruling would set a dangerous precedent that unnecessarily increased uncertainty and risk in our industry, threatening already constructed and occupied buildings, as well as recent gains in job growth and investment. The stay on this ruling will not only allow us to move forward as an industry and preserve the more than 350 construction jobs on site, but it will help renew and restore confidence in the authority of the Department of Buildings and the Board of Standards and Appeals.”

The post DOB stands by supertall decision appeared first on Real Estate Weekly.

The suit was brought today in New York State Supreme Court in Brooklyn by the law firm Berg & Androphy .

The action seeks rent abatement and damages for the decrepit and often unlivable conditions at many city-owned properties, circumstances that push residents to spend out of their own pockets for basic services that NYCHA is legally responsible for providing.

In some cases, residents of apartments have gone without gas or a stove for months.

Rampant elevator outages trap physically challenged or wheelchair-bound NYCHA tenants in their apartments. Proliferating mold, often caused by pervasive leaks, causes or exacerbates asthma and forces tenants to buy inhalers, while untreated insect and rodent infestations compel them to purchase traps, poison, and cats.

The complaint alleges that tenants’ appeals to NYCHA for legally required service or repairs – whether for electricity or gas, plumbing issues, vermin infestation or lead paint abatement – are not answered in a timely manner, if answered at all.

Moreover, plaintiffs assert that NYCHA’s manifold service, maintenance, and repair failures have been deliberately concealed from inspectors sent by the U.S. Department of Housing and Urban Development’s Public Housing Assessment System.

The complaint notes that while drawing as much as $1 billion in annual HUD funding, NYCHA deceived federal inspectors by turning off water service in order to hide leaks, locking doors to locations that would fail inspection, and moving working equipment such as fans from one area to another ahead of inspection to give the appearance of functioning service. NYCHA even had a deception manual in its official training materials.  The complaint paints an overall portrait of a Potemkin building that is disassembled as soon as authorities move on.
 
The Berg & Androphy complaint cites a NYCHA tenant who compared city-owned residential housing to “a third-world country,” and notes that New York City Public Advocate Jumaane Williams has identified NYCHA as the city’s worst landlord for two consecutive years.

 
“New Yorkers should be outraged at how terribly NYCHA has treated the tenants of its properties,” said Berg & Androphy New York partner Jenny Kim, who filed the lawsuit.

“Hard-working, rent-paying New Yorkers should not be forced to endure neglect and indifference, broken promises, and outright deceit on the part of any landlord – especially a city agency supposedly dedicated to providing decent, livable public housing. NYCHA has breached its contracts with its tenants and acted with an appalling lack of care, ethics, and empathy. It is well past time to hold the agency accountable.”

NYCHA is estimated to house as many as seven percent of New York City residents. Nearly a fifth of NYCHA tenants are 62 or older, the complaint says, and 37,000 are older than 62 and live alone. More than one-quarter of NYCHA residents are children. Yet, a March 2018 sampling of 225 public housing apartments found that 212, or 94 percent, had at least one severe condition that could pose a health hazard to residents.

The NYCHA tenant handbook is titled “A Home to Be Proud Of,” but the complaint details how far the agency, established in 1935, has strayed from its mission to provide homes for low- and moderate-income New Yorkers. It says, “Although these developments were, when built, models of affordable public housing, NYCHA has failed in its responsibilities to its tenants and allowed the NYCHA Developments to fall into disrepair, rendering such housing unsanitary, dangerous and, at times, uninhabitable.”

NYCHA’s track record at its 316 properties has been well reported and is well known to the federal government, which entered into a settlement and consent decree with the agency in 2018 that forced NYCHA to acknowledge its failures to its tenants and duplicity toward HUD inspectors. 

Although a federal monitor was appointed as part of the settlement, as noted in the complaint, the Director of Columbia Law School’s Health Justice Advocacy Clinic described that appointment as “the equivalent of nailing a 2-by-4 to a collapsing building.”

According to the complaint, among NYCHA’s many breaches of its obligations to its tenants, and of city, state, and federal law, are the following:

• The city reported in 2018 that as many as 130,000 NYCHA apartments, or 75%, contain lead paint.  Lead can permanently damage human brains and vital organs, and is known to have contributed to developmental delays in children living in NYCHA housing. Over a four-year period, 820 children living in NYCHA developments were found to have dangerous levels of lead exposure – it is virtually certain that many more who were not tested were also exposed.  NYCHA failed to undertake lead inspections mandated by federal law for years, and has misrepresented to both city and federal authorities the extent of its lead paint inspection and abatement efforts.

• Elevator service interruption is common, stranding residents in their apartments and forcing others to climb multiple flights of often unlit stairs. In other instances, barely functioning elevators have injured residents who attempted to use them. In 2016, a resident was killed due to a faulty elevator.  Between January and August 2019, there were 28,400 elevator outages at NYCHA properties. The New York Department of Buildings served NYCHA with more than 11,000 elevator violation notices in 2019. Of the more than 3,200 elevators at its properties, NYCHA estimates that more than two thirds are in “fair” or “poor” condition. 

• Badly leaking water pipes in kitchens and bathrooms and resulting mold are pervasive, reported by all three of the named plaintiffs. One named plaintiff waited over a year for a severe leak to be repaired.  According to the complaint, mold was found to have returned in 47% of the instances in which NYCHA claimed it remediated a mold problem. A health issue for children as well as adults, mold releases toxins and allergens and can require residents to purchase mold cleaners, medications, and inhalers. Aging and unmaintained pipes have also leaked sewage into residents’ homes.

• All three named plaintiffs reported continuing infestation by insects and/or rodents, which gain entrance through unrepaired holes and leaks. A Department of Health investigation found that nearly half of NYCHA dwellings had insect infestations and almost 20% had evidence of rodents.

• Poorly lit halls, stairways, entryways, and other common areas, broken locks on exterior doors, and non-working intercom systems are ubiquitous in NYCHA developments and create unsecure and unsafe conditions inside buildings. The complaint says, “In 2018, there were 979 arrests for criminal trespass in the NYCHA Developments and 5,671 arrests for index crimes (which include murder, rape, robbery, aggravated assault, burglary, larceny and motor vehicle theft).”

Berg & Androphy’s Kim said, “The exact causes of action in our complaint may sound legalistic – breach of lease agreements and the warranty of habitability – but in fact, they stand for the harsh and shameful reality that NYCHA mistreats its tenants and has done so with impunity for a long time. We are proud to stand with these tenants as fellow New Yorkers and obtain real relief for NYCHA tenants who have suffered for too long.”

The post NYCHA residents sue city for making them live in unlivable conditions appeared first on Real Estate Weekly.

By Sabina Mollot

A landlord who whitewashed graffiti art off his Long Island City property has lost his appeal to pay the artists $6.7.5 million in damages.

But Jerry Wolkoff says he may take the case to the appeals court, claiming he thought what he did was “the humane thing to do.”

“I felt it was better for the artists,” said Wolkoff, who tapped street artist Jonathan Cohen to jazz up the 5 Pointz block he owned in 2013 before turning it into condos.

“Imagine seeing your work piece by piece coming down,” said Wolkoff. “Let it end. For me it was the humane thing. I figured get it over with. Maybe I was wrong. I have nothing against the artists. Even the ones that sued me. A lawyer says you can make money. Can you blame them?“

In a decision handed down on February 21, three judges of the U.S. District Court for the Eastern District of New York said that the prior decision by District Judge Frederic Block to make Wolkoff, G&P Realty LP and affiliated LLCs pay $6.75 million for the “willful” destruction of the art wasn’t made in error.

Cited in the decision was the Visual Artists Rights Act of 1990 (VARA), which prevents destruction of an artist’s work if it has achieved recognize stature, along with certain other protections for an artist’s work.

The 32-page decision also mentioned that even temporary art can achieve recognized stature like the flag installation “The Gates” in Central Park by Christo.

The judges also said that street art has evolved over the years to become fine art, citing works by mural artist Banksy as an example.

“Though often painted on building walls where it might be subject to overpainting, Banksy’s work is nonetheless acknowledged, both by the art community and the general public, as of significant artistic merit and cultural importance,” they wrote.

It was back in 2002 when Wolkoff enlisted Jonathan Cohen, known professionally as Meres One, to transform a series of dilapidated warehouses he owned in Long Island City into artist exhibition and rentable studio spaces.

With Cohen acting as curator, the project was a success, attracting extensive media coverage and foot traffic.

But in 2013, Wolkoff sought approvals to turn the buildings into luxury housing. Cohen unsuccessfully tried to fight the property’s destruction, and also was unsuccessful in trying to buy the site.

He then sued the owner, alongside other artists, under VARA to keep the art from being destroyed. The artists got a temporary restraining order, and when it expired they applied for a preliminary injunction. The court denied this in a minute order but said a written order would soon follow.

Before that document was issued, Wolkoff had the art whitewashed a few nights later. After that nine additional artists sued the developer.

By February of 2018, a district court found that Wolkoff had violated VARA because 45 of the destroyed works were found to have achieved recognized stature and because their destruction was willful.

Block also said Wolkoff acted out of “pure pique and revenge for the nerve of the plaintiffs to sue to attempt to prevent the destruction of their art.”

Additionally, the district court found that whitewashing the works wasn’t even necessary before demolishing the buildings, calling the act “most troubling to the court.”

The damages were $150,000 for each of the 45 destroyed works.

Today, the site at 22-44 Jackson Avenue is a luxury rental property called 5Pointz. It has 1,115 apartments (including 223 affordable units). Renderings show that hints of its former identity remain in its graffiti-inspired logo and art on the walls.

Wolkoff said he hopes to open the north tower in May with the south one three months later. He has yet to start renting out the apartments, saying he prefers to have the buildings, including the amenities, which will include a pool and kids’ play room, completed before leasing.

He hasn’t yet set prices but said they would be comparable to other new buildings in Long Island City.

Wolkoff added he’d work with artists again in the future, though he doubts any of the plaintiffs would take him up on that offer. “But,” he added, “there are thousands of street artists that would.”

Wolkoff told Real Estate Weekly he is considering his next legal move. “We don’t know. We have 90 days to make a decision. My son David and I are discussing it with people,” he said.

Meanwhile, attorney for the artists, Eric Baum of Eisenberg & Baum, LLP, called the ruling “a monumental win” for artists’ rights.

“The Artists are humbled by and thankful for the ruling,” said Baum. “The 2nd Circuit affirms Judge Block’s thoughtfully reasoned decision that our clients’ art is to be cherished and protected and not destroyed. This decision ensures that future artists and their moral rights will have the protections that they and their works of art rightfully deserve.”

The post Landlord ordered to pay graffiti artists nearly $7M for destroying work appeared first on Real Estate Weekly.

In November 2019, Attorney General James and Comptroller Stringer announced a $2.9 million settlement with the developers and landlords of 180 Nassau Street, Brooklyn Warehouse 180 LLC and Mica Gabe Brooklyn LLC, for violating prevailing wage requirements under the New York State Section 421-a tax exemption program by underpaying building service employees and withholding supplemental benefits.

The workers at the building were represented by a whistleblower 32BJ SEIU, who notified the Attorney General’s Office and the City Comptroller’s Office about the violations.

The post 421a Builder pays back wages to workers appeared first on Real Estate Weekly.

State Supreme Court Judge Joel Cohen said there was no proof that Douglas Eisenberg and John Arrillaga Jr. were involved in the day-to-day running of A&E Real Estate Holdings, a company that owns some 6,000 rent regulated apartments across the city.

And he said a lawsuit filed by 68 tenants of 22 A&E properties shed no light on whether the two knew about or took part in an alleged scheme to submit false information to the DHCR about improvements that were never made and apartments that were never registered.

“We are pleased that the court has dismissed some of the claims, and will vigorously defend against those that remain. We believe once the court has the opportunity to review the factual record, this matter will be favorably resolved,” said a spokesman for A&E.

The landlord had tried to have the lawsuit dismissed entirely however, and so the tenants’ attorney, Lucas Ferrara of Newman Ferrara, said he considers the decision to keep the charge of inflating rents on the table to be a win for his side.

“The onus is on them now to show proof” of renovations made to properties and what they cost to justify rent hikes via individual apartment improvements, the attorney told Real Estate Weekly.

The lawsuit accuses the landlord and its management arm, A&E Real Estate Management, of improperly increasing rents and in some cases deregulating units after making improvements and mis-stating legal rent records.

The lawsuit cites cases dating back to October 18, 2012, including a tenant of 30-49 Crescent Street in Queens whose rent was 162 percent higher than the prior tenant’s. According to the claim, the owner would have had to perform $62,000 worth of improvements to the apartment to justify the increase, but there was no evidence that IAIs in that amount took place.

Another plaintiff’s apartment at 344 Washington Avenue in Manhattan experienced a 230 percent increase, which would have required $89,000 in IAIs to justify, but the suit said there wasn’t evidence of IAIs in that amount.

A tenant in 227 Haven Avenue in Manhattan (pictured top) experienced a 354 percent increase, which would have required $123,000 in IAIs. Again, there was no evidence that IAIs in that amount took place, according to the complaint.

In the decision, Judge Cohen also took issue with an argument made by the landlord that retroactive application of the newly passed rent laws would be unconstitutional based on clauses in the Constitution related to taking of private property without just compensation.

In response, Cohen wrote, “Defendants do not cite a single case which has found the retroactive application to be unconstitutional. This is no exception.”

The judge also stated, “Defendants are sophisticated participants in an extensively regulated industry, and the HSTPA marks only the latest legislative change to an area under tight legislative control… By entering themselves into an arena subject to government regulation, defendants submitted to the possibility that future regulations would dislodge their settled commercial expectations.”

Ferrara agreed with the assessment, saying, “You bought rent regulated housing. What did you think you were getting into? It sends a message to the industry about pending challenges.”
Along with damages, the tenants who have sued are seeking to get stabilized leases for tenants in apartments that were illegally deregulated.

Both the tenants’ and owners’ attorneys are due back in court on December 3.

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