By Forum Staff
State Attorney General Tish James and State Homes and Community Renewal Commissioner RuthAnne Visnauskas recently filed a lawsuit against Zara Realty Holding Corp., its principals, and affiliated entities for repeatedly violating rent stabilization laws and overcharging rent-stabilized tenants in Jamaica and Elmhurst.
The lawsuit alleges that Zara Realty illegally took advantage of tenants who paid their rent through City Department of Social Services housing subsidy programs and brazenly disregarded rent reduction orders issued by HCR’s Office of Rent Administration. Zara Realty would then sue tenants who did not pay these unlawfully inflated rents, putting multiple tenants at risk of eviction. The Office of the Attorney General and HCR’s Tenant Protection Unit are seeking a court order to stop Zara Realty from charging or collecting illegally inflated rents and force them to refund all tenants who were overcharged.
New York City’s rent stabilization laws place limits on how much a landlord can increase rent in a renewal lease or after a vacancy. The lawsuit filed last Wednesday argues that since at least 2022, Zara Realty ignored the legal limits to exploit tenants who received DSS housing subsidies, charging them the highest possible amount allowable under their program, regardless of the legal rent for their unit as dictated by the Rent Guidelines Board. As a result, OAG and TPU contend that tenants were charged rent increases that were significantly higher than the legal amount.
In addition to violating legal rent increase limits, Zara Realty also ignored rent reduction orders issued by the Office of Rent Administration. The ORA orders landlords to reduce rent when a landlord fails to provide essential services or maintain the property to required standards. Tenants filed complaints with ORA, which then ordered Zara Realty to reduce and freeze their rents. Despite receiving these rent reduction orders, the lawsuit alleges that Zara Realty continued to overcharge tenants.
The OAG and TPU allege that Zara Realty’s complete disregard for rent stabilization laws forced multiple tenants into financial distress and put them at risk of eviction. In one case cited in the lawsuit, a DSS voucher-holder signed a one-year lease with a company owned by Zara Realty in 2022. The following year, the company increased her rent by eight percent, even though the legal limit for increases was just 3.25 percent. The next year, Zara Realty raised the same tenant’s rent by 44 percent. When the tenant refused to pay, Zara Realty took her to court. Another tenant’s rent had been frozen pursuant to a court order, but Zara Realty continued to overcharge the tenant for a period of two years. When ordered to provide the tenant with a rent credit and stop overcharging him, Zara Realty refused and continued to attempt to collect the inflated rent. When the tenant stopped paying the illegal rent, Zara Realty began eviction proceedings.
With this lawsuit, OAG and HCR are seeking a court order requiring Zara Realty to:
- Stop charging or collecting illegally inflated rents;
- Identify every former and current tenant that was illegally overcharged;
- Refund all illegally collected rent to former and current tenants;
- Pay damages to all former and current tenants, and
- Correct all rent registrations with HCR and issue new leases to tenants.
