Gentrifying Brooklyn Landlord Faces Lawsuit For Allegedly Illegally Overcharging Tenants In Recently Purchased 8-Unit Rent-Stabilized Building Being Gut-Renovated & Operated As A Rooming House

In Crown Heights, Brooklyn, The Real Deal (NYC) reports:

• In June, residents of 80 New York Avenue came up with a novel way to warn prospective tenants away. They hung fluorescent green, orange and pink signs in the windows across three floors, that together spelled out, “SLUMLORD: DON’T RENT HERE.”
  
  The landlord they were referring to, Mendel Gold, bought the four-story Crown Heights walk-up in 2014 for $2.3 million, then gut-renovated and converted most of the eight units to five-bedroom apartments, which he rents out by the room.(1)
  
  Renting by the room is gaining popularity in gentrifying Brooklyn, Gothamist reported, and it’s easy to see why. Both landlords and brokers can reap the benefits of a rotating pool of tenants. The rooms, which can go for under $1,000 a month, appeal to young singles who may not have the finances or willingness to make a long-term commitment.
  
  Landlords “are essentially gutting apartments and turning them into relatively nice places to live,” Bernard Klein, a realtor with Blooming Sky, told Gothamist. “Then, to increase their rental yield they get a broker to market it by the room.”
  
  David Maundrell TRData LogoTINY, who runs the Brooklyn and Queens division for Citi Habitats, told the website that the practice of renting by the room was a common one in emerging neighborhoods. “If you go out to a cool restaurant and you have a younger waiter, they all live in these neighborhoods,” he said. “And this is how they do it.”
  
  Renting by the room is illegal, however, unless all the tenants co-sign a lease.
  
  In the case of 80 New York Avenue, however, the landlords and broker were less-than-upfront about the living arrangements, the tenants allege. Some didn’t realize they’d be co-leasing an apartment with four other people, or that the landlords would have so much control over who lived with them.
  
  The tenants have sued the landlords alleging illegal deregulation and rent overcharges.
  
  Their lawyer, Brian Sullivan of MFY Legal Services,(2) said they are “exactly the sort of tenants to live in an SRO.” They’re working but not making a lot of money and need cheap, no-frills accommodations, Sullivan told Gothamist. “That whole section of the housing market just got demolished, and it creates conditions where landlords can take advantage.”

Source: Landlords in gentrifying Brooklyn are increasingly renting by the room (Demand for quick and cheap housing prompts some to consider SRO-like arrangements: report).

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(1) See 'Slumlord' Matchmaker: Brooklyn Landlord Turns Desperate Strangers Into Sudden Roommates.

(2) MFY Legal Services is a New York City-based non-profit, public interest law firm that works in concert with neighborhood social service providers and community advocates to reach and provide legal representation and education to low-income New Yorkers in the following areas: housing, public benefits, consumer, employment, civil rights, disability rights, and family matters.