Attorney General James Stops New York City Landlords That Harassed Rent-Stabilized Tenants and Lied to Banks
August 5, 2022
Ink Property Group Illegally Bought Out Tenants, Deregulated Rent-Stabilized Units, and Forced Residents to Live in Hazardous Conditions
AG James Secures Over $400,000 for Impacted Tenants and Up to $1.75 Million to Preserve Affordable Housing
NEW YORK – New York Attorney General Letitia James today announced a settlement with Ink Property Group LLC (Ink) for violating rent stabilization laws and illegally harassing tenants. Ink — managed by Eden Ashourzadeh, Alex Kahen, and then-Public Advocate James’ 2016 Worst Landlords List offender Robert Kaydanian — bought dozens of rent-stabilized buildings in low-income communities of color with the intention of illegally deregulating affordable housing for profit. Through a variety of illegal activities, Ink forced out rent-stabilized tenants so their units could be offered at market rate. Ink also intentionally submitted false documents to financial institutions, lying about rents and occupancy to obtain loans. As part of the settlement, Ink will pay up to $1.75 million to preserve affordable housing, and over $400,000 in restitution to tenants. Ink will also bring at least 28 apartments that were illegally deregulated back into rent stabilization, making them permanently affordable. Ink is also required to install a monitor and external property management company to ensure compliance with rent stabilization laws and manage their buildings, which will be overseen by the Office of the Attorney General (OAG).
“As New Yorkers faced soaring rents and struggled to find affordable housing, Ink tried to get rich quick by preying on vulnerable tenants and their families,” said Attorney General James. “Lying and cutting corners to evade rent stabilization is one of the oldest tricks of the trade, but Ink’s years of exploiting our hardworking neighbors without consequences end here. These tenants organized and fought back, and because of their efforts, they will be compensated for the suffering they’ve survived. My office will continue to fight for tenants and to preserve affordable housing by ensuring bad actors like Ink are held accountable.”
Between 2014 and early 2019, Ink bought 32 multifamily buildings in New York City, primarily in north Brooklyn and other predominantly low-income communities of color. Ink also served as property managers for 12 additional buildings. The company implemented a strategy of purchasing small- to medium-sized apartment buildings with units that were primarily rent-stabilized. Ink would then engage in a campaign to force out all the rent-stabilized tenants — first illegally approaching tenants with buyouts, then repeatedly and persistently subjecting tenants to harassment, and in some cases, creating hazardous conditions so tenants were forced to leave because their apartments were no longer habitable. Ink even provided monetary commissions to employees who successfully convinced tenants to move out, offering up to $5,000 for each buyout.
Once the rent-stabilized tenants were pushed out, Ink would renovate the units with cosmetic updates and rent the apartments at the highest rate the market would allow. Ink ignored the Individual Apartment Improvement (IAI) system set forth in the Rent Stabilization laws, instead treating every new vacancy as an unregulated unit, regardless of whether the renovations made met the criteria to achieve deregulation. Ink also failed to appropriately document any IAI calculations and repeatedly failed to file annual rent registration statements with the New York State Department of Homes and Community Renewal (HCR) for the majority of buildings in their portfolio. The registration statements that were filed often contained misrepresentations and false information about many of the apartments’ occupancy and regulated status.
Despite the renovations, buildings averaged more than 1,000 open housing violations, including 115 of the most hazardous violations for conditions such as lead-based paint and broken window guards. Some of the violations that remain open today were issued as early as 2017.
One tenant, Maria de la Rosa, lived in her rent-stabilized apartment in Brooklyn for more than 30 years before Ink bought the building. Not long after, Ink employees approached her, repeatedly and aggressively offering buyouts, even after she explicitly refused. Ink succeeded in displacing nearly half of Ms. de la Rosa’s neighbors, but then left the vacant units to fall into disrepair to such an extent that conditions impacted Ms. de la Rosa’s health and safety. Since Ink acquired the building, she has dealt with cracks on the walls, leaks, and rats.
As Ink continued to grow their portfolio, they submitted false rent rolls to financial institutions to successfully obtain more favorable loans or refinance their mortgages. The false documents reported inflated rents and fake leases — often with family, friends, and associates listed as “renters” — to feign high profitability. A four-year investigation conducted by OAG with assistance from HCR found Ink repeatedly and consistently committed various fraudulent acts for their own gain, and violated the New York State Rent Stabilization Code, the New York City Rent Stabilization Law, and the New York City Housing Maintenance Code.
As part of the settlement announced today, Ink will pay up to $1.75 million to Attorney General James’ Affordable Housing Fund with the New York City Department of Housing Preservation and Development (HPD), which finances the preservation and creation of affordable housing in New York City. Ink will also pay $400,000 in restitution to tenants who were harassed by Ink to vacate their apartments and $2,500 each to tenants who were forced to live in hazardous conditions intentionally created by construction. At least 28 apartments will be reregulated as determined by independent counsel engaged by the monitor, and tenants who were previously overcharged for these units will also receive overcharge awards at amounts yet to be determined. These funds are to be disbursed by the monitor and the new independent property manager will take over management of 15 buildings that Ink currently owns and manages.
The OAG would like to thank HCR, HPD, and the Ink Tenant Coalition for their support and partnership. The Ink Tenant Coalition is led by St. Nicks Alliance, and includes the Fifth Avenue Committee and the Flatbush Tenant Coalition. Additional thanks to Communities Resist (CoRe), TakeRoot Justice, and Stabilizing NYC for providing representation and support to the Ink Tenant Coalition and local community groups organizing tenants against predatory landlords.
“Ink Property Group’s illegal activities have caused tremendous pain for their tenants, many of whom are people of color,” said U.S. Representative Nydia Velázquez. “Housing discrimination and landlord mistreatment of tenants is unfortunately not a rare occurrence, which is why I introduced the Landlord Accountability Act which would help to prevent the despicable actions taken by Ink. I will continue to fight in Congress to provide federal protections for tenants and I thank to Attorney General James for leading the effort to ensure financial repercussion for Ink and helping secure restitution to impacted tenants.”
“Landlords in our city take advantage of loose regulations to illegally harass tenants, implement excessive rent increases, and pursue evictions without due cause, but we’re not taking this lightly anymore,” said Brooklyn Borough President Antonio Reynoso. “As a Council Member — and working with St. Nick’s Alliance, I led the creation of the North Brooklyn Housing Taskforce that pursued some mismanaged Ink Proprieties, the group Attorney General James is reaching a settlement with today for their poor actions against tenants. Thank you to Attorney General James for her leadership around this issue, letting landlords and property groups know that we will hold them accountable for unfair treatment of tenants.”
“In the middle of this severe affordable housing crisis, all levels of government must work relentlessly to protect every precious rent-stabilized unit and the New Yorkers who call them home,” said Assemblymember Emily Gallagher. “Attorney General James' settlement with Ink Property Group should serve as a warning to landlords who prey on tenants and evade our laws: You're on notice. I'm grateful to the attorney general and her team for steadfastly defending tenants in my district and across New York.”
“We must crack down on every predatory landlord that is harassing tenants, eliminating affordable housing, and destabilizing our communities,” said New York City Council Member Lincoln Restler. “This settlement secured by our Attorney General Letitia James is exactly the type of aggressive accountability we need every time against bad landlords.”
“The settlement is a crucial and important landmark that sends a strong message to shady LLCs like Ink Property Group, who believe that they can come into our neighborhoods to target and displace low-income communities of color,” said New York City Council Member Jennifer Gutiérrez. “This decision is a reminder that tactics like harassing tenants, and falsifying financial documents has real consequences and that these exploitative behaviors cannot rein free in our city.”
“Despite New York's robust housing laws, landlords such as Ink Property Group routinely betray the public's trust by warehousing units, exploiting and harassing low-income tenants, and evicting families in a relentless pursuit of profit,” said New York City Council Member Sandy Nurse. “Thanks to the leadership of the attorney general, St. Nick's Alliance, and tenant leaders who faced these abhorrent conditions, Ink Property Group will be held accountable, and tenants will see some justice. Let today be a message to similar landlords: Don't harass our constituents and don't warehouse in a housing crisis.”
“St Nicks Alliance and the Ink Tenant Coalition celebrate this action and justice finally being served,” said Frank Lang, housing director, St. Nicks Alliance. “The families have endured undue hardship and threats to their housing security under the hands of Ink Property Group. Ink utilized unlawful and aggressive practices to displace long term tenants. Unfortunately, this is not an isolated incident as many New Yorkers suffer as a result of unlawful landlords. To those tenants that continue to suffer, our message is ‘you are not alone, we are here to help.’”
“Fifth Avenue Committee is proud to stand with Ink property tenants who are demanding justice and respect and say enough to all the harassment tactics and illegal buyouts that the tenants suffered for years! Thank you to Attorney General Letitia James for her and her team's commitment for ensuring that New York tenants get justice,” said Michelle de la Uz, executive director, Fifth Avenue Committee. “This settlement is a precedent to support our communities of colors that are being displaced by the abuse of these predatory companies that have a clear agenda of harassment and displacing families from rent stabilized apartments. This is a victory for the tenants and the tenant’s movement in New York City that was years in the making. The FAC is committed to fighting alongside tenants to protect their rights.”
This matter was handled by Senior Enforcement Counsel Rachel Hannaford, Assistant Attorney General Jane Landry-Reyes, and Housing Protection Unit Chief Brent Meltzer, as well as Assistant Attorney General Hannah Baek of the Bureau of Internet and Technology, Special Assistant for Housing and Community Development Kerri White, and Director of Research and Analytics Jonathan Werberg. The Housing Protection Unit is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.