A class-action lawsuit filed Monday on behalf of tenants of a Washington Heights building contends their landlord breached rent regulations it was required to abide by while receiving a state tax benefit.
Housing Rights Initiative, a nonprofit assisting the tenants, claims Beach Lane Management convinced residents of 651 W. 171st St. to sign away their right to regulated rent increases, which Beach Lane Management needed to follow while participating in the state’s J-51 tax program.
Gov. Andrew Cuomo launched the J-51 program in 2016 as part of an attempt to convince landlords to place some 50,000 homes back in the rent stabilization program they were illegally taken out of. Landlords that began abiding by the required rent regulations were given a tax benefit, which currently costs the city $250 million annually, according to the Housing Rights Initiative.
The complaint claims West 171 Associates, a subsidiary of Beach Lane Management, used rent discounts to convince at least two residents to sign paperwork waiving their right to the rent stabilization protections.
West 171 Associates then allegedly hiked rents beyond what was permitted under the J-51 program, and justified the increases by saying the firm would make apartment improvements. But the work done amounted to routine maintenance tasks and painting, according to the lawsuit.
“If the discounted rent is based on a fraudulent rent spike, it’s no longer a discount, it’s an overcharge hiding behind a larger overcharge,” Aaron Carr, the executive director of Housing Rights Initiative, said in a statement.
Beach Lane Management, which owns 100 city properties, did not return requests for comment.
Beyond seeking to recoup what they allegedly overpaid in rent, the plaintiffs are requesting an independent audit of Beach Lane Management’s accounting.
