New York Attorney General Letitia James recently announced a settlement with Ink Property Group, owner of dozens of NYC apartment buildings. 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. The group 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.
The context:Ink Property Group bought 32 buildings between 2014 and 2019 and forced out at least 80 tenants to offer units at market rate, among many other abuses and predatory practices. To flip the units, Attorney General James said the company worked to strategically force out tenants through buyouts, harassment, and worsening living conditions. An Attorney General's office probe into Ink Property Group began in 2019 following numerous complaints from tenants, according to the settlement.
One level deeper: 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, they would illegally approach tenants with buyouts, then repeatedly and persistently subject tenants to harassment, and in some cases, create hazardous conditions so tenants were forced to leave because their apartments were no longer habitable. The group 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. They would ignore the individual apartment improvement (IAI) system set forth in the rent stabilization laws and illegally treat every new vacancy as an unregulated unit, regardless of whether the renovations met the criteria to achieve deregulation.
Ink Property Group also failed to appropriately document any IAI calculations and repeatedly failed to file annual rent registration statements with the DHCR 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.
In addition, as Ink continued to grow its portfolio, it submitted false rent rolls to financial institutions to successfully obtain more favorable loans or refinance its mortgages. The false documents reported inflated rents and fake leases often with family, friends, and associates listed as “renters” to fake high profitability.
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