UPPER WEST SIDE — A Manhattan landlord and developer who illegally bought out two elderly, rent-controlled tenants then tried to cover it up will pay nearly half a million dollars in a settlement with the state, the Attorney General Eric Schneiderman announced Monday.
"With many struggling to find affordable housing, my office will not tolerate real estate developers who circumvent laws designed to protect rent-stabilized units," the AG said Monday.
Both tenants, who both paid about $1700 — one for a 2-bedroom and the other for a 3-bedroom — approached the developer, 165 West 91st Street Holdings LLC, who is also the landlord, hoping to be bought out of their apartments, but under state law they had to wait until building renovation plans were approved by the AG.
The developer who began converting apartments in the building into condominiums in May 2012, bought the units from them for $200,000 and $155,000 respectively in Dec. 2012 even though the conversion plans were still being reviewed.
Afterwards, the developer attempted to cover up the illegal early buy-out by bringing fake non-payment proceedings against its tenants.
By claiming the tenants were not paying rent, the developer was able to falsely settle with the tenants and pay them for their units.
The Attorney General's office discovered the problem while investigating separate complaints in the 111-unit building. No charges have been brought. The money from the $490,000 settlement will go directly toward building new affordable housing units, AG spokesman Doug Cohen said.
"I am pleased that this agreement will directly benefit hard working New Yorkers by allowing for the creation of additional affordable housing units which will boost our communities," Schneiderman said.
The settlement also requires the developer to pay New York $50,000 to cover costs of the investigation.
"When two of our tenants approached West 91st Street Holdings with requests to be bought out of their apartments, we attempted to assist them in achieving the goal," the developer's lawyer, James Bernard, said. "Working with the Attorney General, we settled this matter and are pleased to have reached an agreement that will support affordable housing in New York City."
