Infamous Queens building owner overcharged rent-stabilized tenants, suit claims

Zara Realty Holding Company was sued for allegedly illegally overcharging rent-stabilized tenants in Queens. Screenshot from Google Maps

By Noah Powelson

A Queens real estate company was sued for violating rent stabilization laws, putting tenants in Jamaica and Elmhurst at risk of eviction, according to the New York attorney general’s office.

New York Attorney General Letitia James alleged on Wednesday that the Zara Realty Holding Company illegally took advantage of Queens tenants for years by ignoring court orders and city laws to limit rent increases on stabilized apartments. Zara Realty was accused of overcharging tenants who made their rent payments through the city’s housing subsidy programs and disregarding rent reduction orders issued by the Office of Rent Administration.

In one instance in the lawsuit, Zara Realty allegedly increased a tenant’s rent by eight percent even though the legal limit established by the Rent Guidelines Board was 3.25 percent. Zara Realty allegedly raised rent on the same tenant again the following year, this time by 44 percent. When the tenant refused to pay the rent, Zara Realty sued the tenant.

Another tenant listed in the lawsuit had their rent frozen through a court order, but Zara Realty allegedly continued to overcharge the tenant for two years. The company also allegedly refused orders by the court to give the tenant rent credit, and eventually began eviction proceedings after the tenant refused to pay the allegedly illegal rent.

The lawsuit against Zara Realty seeks to identify every tenant the company allegedly overcharged, refund all illegally collected rent, provide additional tenant reimbursement as well as compensation for damages. The lawsuit also seeks to reissue new leases to all tenants.

“While hardworking families are battling an affordable housing crisis and fighting to make ends meet, Zara Realty shamelessly took advantage of vulnerable tenants,” James said in a statement. “New Yorkers should not have to worry that their landlords are willfully deceiving them just to line their own pockets. Let this be a warning: any landlord who tries to cheat their tenants and evade our rent stabilization laws will be hearing from my office.”

This is not the first time Zara Realty has been in the OAG’s crosshairs. In March 2019, the OAG sued Zara Realty for targeting immigrant tenants in at least 38 rent-stabilized buildings by charging excessive fees, coercing them into signing improper leases and illegally raising rents. That lawsuit is ongoing.

New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas, said her Tenant Protection Unit had recently implemented an updated audit algorithm to identify signs of harassment and unlawful deregulation sooner.

“Our Tenant Protection Unit is fighting for New Yorkers every day by protecting them from predatory landlords who try to illegally overcharge their tenants and defy our State’s rent laws," Visnauskas said. “The message from our office and Attorney General James is clear – if landlords fail to abide by the rent laws, if landlords seek fraudulent rent increases, or initiate unlawful evictions – we will not hesitate to take action on behalf of millions of rent-regulated tenants in New York.”