Governor Kathy Hochul and RuthAnne Visnauskas, Commissioner of New York State Homes and Community Renewal, have announced a $3.1 million settlement with the Lefrak Organization. This agreement follows an investigation by the Tenant Protection Unit (TPU), which found that tenants in 59 rent-regulated buildings across New York City were improperly charged for water use.
The settlement requires Lefrak to stop collecting these surcharges, refund affected tenants with nine percent interest, and implement independent oversight to ensure compliance. All current tenants will receive credits refunding every dollar paid for water charges since they moved in.
“We are committed to making the State more affordable and livable for all New Yorkers and will not allow illegal fees to drive up costs for millions of rent regulated tenants,” Governor Hochul said. “Today’s settlement will refund these prohibited charges back into the pockets of tenants and send a powerful message that our Tenant Protection Unit is working tirelessly to defend millions of New Yorkers by upholding our rent laws and preserving our rent regulated housing stock.”
The TPU began its investigation in 2024. During this time, Lefrak agreed to halt water charge collections until the Office of Rent Administration (ORA) resolved a legal appeal. The ORA later confirmed that Lefrak had been charging tenants improperly. As part of the settlement, Lefrak has given up rights to further appeals on this matter and agreed to discontinue related legal actions in State Supreme Court.
Under the terms of the agreement:
– Lefrak stopped collecting water usage charges beyond monthly rent as of October 31, 2024.
– Current tenants will receive credits covering all payments made for water charges since their tenancy began.
– Refunds will include nine percent interest.
– An independent auditor will be hired at Lefrak’s expense to monitor ongoing compliance.
“This is a good day for tenants and for the LeFrak Organization, which chose to swiftly engage in resolving this regulatory dispute and ensure that relief extended well beyond the original complaining tenants. This is how government works best, delivering decisive successes for New Yorkers and safeguarding affordability. I commend the Tenant Protection Unit for recovering more than $3.1 million for nearly two thousand tenants, and their continued work protecting a million rent regulated households,” Commissioner Visnauskas said.
The TPU focuses on detecting landlord fraud or harassment through audits, investigations, and legal action while educating both landlords and renters about their rights under state regulations.
Earlier cases handled by TPU included settlements such as $400,000 against Bottem Realty last March over fraudulent registrations and tenant harassment, as well as a $514,000 settlement against Steve Croman in February 2024 regarding overcharges and violations of rent laws.
Tenants who believe they are being overcharged or harassed can contact the Tenant Protection Unit at 212-872-0788 or via email at [email protected].
