Letitia James is going after a prominent Brooklyn landlord, accusing the firm of illegally deregulating rent-stabilized units.
The New York Attorney General’s office and the Division of Housing and Community Renewal sued Peak Capital Advisors on Monday, Crain’s reported. The lawsuit alleges Peak illegally deregulated more than 150 units across 30 properties in Queens and Brooklyn, including buildings located in Greenpoint, Astoria, Sunnyside and Long Island City.
Since 2019, Peak deregulated dozens of units by using the state’s “substantial rehabilitation” program, designed for full-system replacements. Peak’s properties, however, didn’t warrant “substantial rehabilitation,” according to the agencies’ investigation.
Peak allegedly tried covering its tracks by reassigning apartment numbers to make it harder to track where regulations should’ve been in place, according to the lawsuit. The company also allegedly had a consultant draft false affidavits about the quality of the buildings’ systems.
The plaintiffs are seeking a return of the overcharged rents, in addition to damages, though no amount is specified in the lawsuit. They also want an independent administrator to audit the company’s real estate portfolio.
Peak could not be reached by The Real Deal for comment.
The landlord is part of Balanced Housing Solutions, which is pushing against the very same rules at the heart of the lawsuit against Peak.
Last week, Balanced Housing Solutions sued New York’s Division of Homes and Community Renewal over alleged unlawful retroactive application of new rules concerning “substantial rehabilitations” at rent-stabilized properties.
The lawsuit argues that HCR is trying to enforce new rules on projects completed before a November 2023 rule change.
Gov. Kathy Hochul approved the measure, but with key changes, including striking the retroactive nature of the bill; the new application rule applies to substantial renovations initiated on or after January 1, 2024. Owners, from that point on, would need to submit applications within one year of completing a substantial rehab to legally deregulate the building.
Balanced Housing Solutions, which renovated 31 buildings that were at least 80 percent vacant — which matches the building count in the state’s lawsuit against Peak — is seeking an injunction to stop HCR from applying the new rules retroactively.
— Holden Walter-Warner
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