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Six NYC Landlords Facing Prosecution For Rent Misconduct

Six NYC Landlords Facing Prosecution For Rent Misconduct

In a first-of-its-kind case, six New York City landlords are facing prosecution for overcharging tenants to take advantage of tax breaks.

The New York Times shared key details about the story, noting that the real estate developers -- Joel Kohn, Michael Ambrosino, Alen Paknoush, Mendel Gold, Ioan Sita and Gheorghe Sita -- have been accused of submitting false tax documents to both New York City and New York State departments in a bid to take advantage of the tax break known as 421a. 

The controversial 421a exemption allows multi-unit property owners to apply for a property tax exemption if their property value changed because they did construction on a multi-family residential building.

Per the Times, the program has long been exploited by certain landlords, leading to high rent and other problems, especially for low-income households.

NYC authorities estimate that approximately $1.77 billion in annual tax revenue is lost as a result of 421a exemptions, which are monitored by the city's Department of Housing Preservation and Development (HPD).

At a press conference on Wednesday, October 19, Manhattan district attorney Alvin L. Bragg said, “This illegal activity was perpetuated for years. When we have a housing crisis like we have right now, every unit of affordable housing counts."

Jocelyn Strauber, the Commissioner of the NYC Department of Investigation, also spoke out, noting that rent misconduct "harms the city in more than one way," by both reducing the availability of affordable housing and taking away from the city's revenue base. 

The charges against the six men come on the heels of Bragg announcing the Housing and Tenant Protection Unit last week.

This new agency will focus on targeting criminal conduct by. landlords and real estate developers throughout New York City's boroughs. 

Although this particular case seems to be the first of its kind, according to the Times, there are many other instances of litigation against landlords in NYC. Earlier in October, for example, tenants in three buildings that received the 421a exemption accused their landlords of illegally raising their rent.

Aaron Carr, the executive director of the Housing Rights Initiative (HRI), told the Times that his watchdog group is "ecstatic" about these new charges, and that his organization discovered nearly 1,500 buildings across the metro area may not be in compliance with 421a regulations, yet have taken the exemption.

HRI has a national presence looking into real estate fraud and tenants' rights nationwide. 

What do you think about 421a and New York's crackdown on rent misconduct?

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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