Brooklyn landlord accused of inflating rent, skirting 421a rules

A group of Brooklyn tenants claim Renaissance Realty repeatedly overcharged tenants for rent and didn’t register its apartments as rent stabilized, violating the rules of a popular tax break program and the state’s rent law.

Tenants of 527 Lincoln Place are seeking class action status in a lawsuit that accuses their landlord of misrepresenting the legal rent of their rent stabilized apartments as “part of a fraudulent scheme to charge tenants excessive rents with impunity, while enjoying 421a tax benefits,” according to a complaint filed in Brooklyn Supreme Court on Friday. According to the lawsuit, Renaissance failed to properly register the Crown Heights apartment building, which was constructed in 2008, with the state’s Home Community and Renewal agency as required under the 421a tax break program.

Renaissance’s attorney, Nativ Winiarsky, a partner at Kucker & Bruh, said he believes the court ultimately won’t certify the lawsuit as a class action. He noted that he had only seen drafts of the complaint but hadn’t yet read the official version.

“Assuming the complaint filed earlier today mirrors the proposed complaint we previously received, we have undertaken an analysis of each and every unit in the building and strongly believe that there is no absolutely no merit to any and all allegations of rampant overcharges and that the landlord will ultimately be vindicated,” he said.

The lawsuit accuses Renaissance of registering a majority of the building’s apartments for the first time in mid-2012, when the landlord should’ve initially done so in 2010. Renaissance also failed to regularly file annual registration information for apartments, according to the lawsuit. The landlord allegedly misrepresented initial legal rents — which is either an amount set by the city’s Department of Housing Preservation and Development or a lower rate — by offering a lower preferential rent to subsequent tenants. By presenting tenants with an inflated initial legal rent, the landlord attempted to “lull the tenant[s] into believing that the rent charged was a bargain,” according to the lawsuit. Renaissance also allegedly didn’t offer lease renewals to tenants, as is required by the rent law.

The lawsuit seeks to certify a class of current and former tenants who were overcharged while living in the building, starting on April 15, 2013. The class size, however, will likely be determined, in part, by the application of the new rent law, which extends the statute of limitations for rent overcharge claims from two to six years. Robert Grimble, who is representing seven tenants in the lawsuit, said the potential class size will be greater if the courts ultimately determine that this new statute of limitations should be retroactive.

This is the second proposed class action suit filed as part of what the Housing Rights Initiative dubbed a “421a crusade.” In April, tenants filed a lawsuit against landlord Jacob Neiss, alleging that he failed to register apartments at 74 Grand Avenue and subsequently masked rent overcharges. The Lincoln Place lawsuit is also a result of an HRI investigation.

Rich Bockmann contributed reporting.