Monday, June 15, 2015

NYC Rental Building Condo Converter To Cough Up $1.2M, Give Eleven Remaining Residents Free Rent For Two Years To Settle NY AG Charges That It Illegally Duped A Dozen Tenants To Vacate Building Through Illegal Buyout Agreements

In New York City, The Real Deal (NYC) reports:
  • The New York State Attorney General’s Office reached a settlement Monday with Margaret Streicker Porres’ Newcastle Realty Services, which made prohibited buyout agreements with tenants at an Upper West Side rental building. The settlement paves the way for Newcastle to resume conversion and condo sales at the property.

    In January, a New York State Supreme Court judge suspended construction of a 24-unit condo conversion at 101 West 78th Street as part of AG Eric Schneiderman’s investigation. Newcastle has owned the 44-unit landmarked building since 2012, records show.

    The AG’s office found that Newcastle induced a dozen tenants to vacate the building before receiving approval for the June 2013 offering plan, which is illegal. Five of the apartments were prematurely taken out of rent stabilization, according to the settlement.

    As a result, Newcastle must pay $1.2 million in restitution to the city’s Affordable Housing – AG Settlement Fund. The firm must also [allow] tenants of the 11 occupied apartments to live rent-free for two years while the building undergoes a renovation. Newcastle must also reimburse some tenants for legal fees incurred when the developer challenged their rent-stabilized status.

    “This settlement puts condominium developers on notice that the rights of tenants will – and must – be protected,” Schneiderman said in a statement. “As housing prices rise across New York, more and more properties are being converted from modest residential rentals to luxury condominiums. My office will continue to hold real estate developers accountable if they disregard the law in search of profits.”

    A representative for the developer said about the settlement: “We are pleased to have resolved these issues in cooperation with the Attorney General’s Office and will now proceed with the completion of this development as planned.”
Source: Newcastle’s settlement with AG allows UWS condo conversion to proceed.

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