Tenants Sue Landlord Over Illegal Rent Increases and Attempts to Deregulate Apartments While Receiving Tax Breaks From the State

Eighteen tenants from a Bronx apartment building sued their landlord in New York State Supreme Court in the Bronx today, challenging the owner’s unlawful attempts to raise their rent above legal limits while receiving millions of dollars in tax breaks from the State and to deregulate the building.

With assistance from the Tenant Rights Campaign, a joint initiative of The Legal Aid Society and Legal Services NYC, the tenants are challenging their landlord’s illegal rents and plan to deregulate their building. The lawsuit argues that the apartments should remain rent stabilized because the landlord, while receiving massive tax breaks, failed to follow the most basic rules of the 421-a program. “If the landlord goes through with this plan to deregulate the building, that would mean the loss of 122 units of affordable housing from the dwindling stock of rent-stabilized apartments in New York,” said Edmund Witter, a Staff Attorney in The Legal Aid Society’s Bronx Neighborhood Office.

1111 Gerard Avenue, a 122-unit rental building located in an area of the Bronx slated for re-zoning under the Mayor's proposed Housing New York Plan, was built in 1991 using a 421-a tax abatement which reduces developers’ taxes in exchange for providing affordable, rent-stabilized apartments. Tenant Marjorie King, who has been living in the building since 1991, said, “When I moved in the building was lovely. We had a community room, storage rooms and a playground.” Now, more than 20 years later the building is in poor condition and the landlord, Shree Ganesh Bronx, LLC, says that it plans to deregulate the building as early as next year.

The tenants’ lawsuit argues that their landlord has raised rents as much as 40% above legally allowed limits in an attempt to force low-income residents from their homes. “We just want the landlord to obey the law. They have agreed to this program and they get a benefit from that, and they should respect our rights to rent stabilization because the 421-a is already in place.” said Emmanuel Yusuf, a Leader of CASA-New Settlement Apartments, a tenants’ rights organization that fights to protect and maintain affordable housing in the Bronx.

“The rules of the 421-a program are clear and simple,” said Carolyn Norton, Staff Attorney at Legal Services NYC. “Shree Ganesh Bronx, LLC flouted these rules but still reaped the benefits of the tax exemption. Now they plan to deregulate the entire building and displace over one hundred low-income New Yorkers who have called this building home for decades.”

The tenants are asking the Court to affirm that all apartments in the building are rent stabilized and are seeking damages to address their landlord’s rent overcharges.

New York Daily News
Bronx tenants accuse landlord of illegal rent increases designed to force them out
BY Barbara Ross, Rikki Reyna
August 10, 2015

Tenants from a building in the shadow of Yankee Stadium have declared war on their landlord, accusing him of illegal and exorbitant rent increases they say are designed to force them out of their gentrifying neighborhood.

Eighteen residents of 1111 Gerard Ave., a six-story, 122-unit building near the Grand Concourse, say in a lawsuit expected to be filed Monday in Bronx Supreme Court the building’s owner has raised their rents by as much as 60% in recent years even though the biggest hike permitted for rent-stabilized apartments was 4.5%.

Even worse, according to the suit, the landlord is notifying tenants their units will be exempt from rent-stabilization laws starting next year when a 25-year, 421-a tax abatement on the property expires.

Lead plaintiff Emmanuel Yusuf said his rent was upped to $1,127 this year when it should be no higher than $895.

“It’s over $300 more that I have to pay now. If I didn’t have the senior citizen center I wouldn’t be able to eat,” said Yusuf, 71, a retired photographer.

Calls to Dhiren Mehta, managing director of building owner Shree Ganesh Bronx LLC, weren’t returned.

Attorneys with the Legal Aid Society and Legal Services NYC say rents in the building had been falsely reported since it opened in 1991, and that tenants were not notified, as required, that their rent-stabilized status would end.

Lawyers for the plaintiffs are asking the court to keep the units under rent stabilization and roll back the increases.