New York Office of the Attorney General (OAG) and the DHCR recently announced the re-regulation of 21 New York City apartments owned by Emerald Equity Group, LLC, a real estate company with a number of buildings in East Harlem, Manhattan. Investigations found that Emerald had improperly and illegally deregulated rent-stabilized units, overcharged tenants, and failed to keep tenants’ security deposits in separate accounts as required by law.

Attorney General Letitia James and NYS Homes and Community Renewal Commissioner (HCR) Commissioner RuthAnne Visnauskas have emphasized that this case exemplifies their agencies’ ongoing commitment to tenant protections. In a statement, Visnauskas said, “This case exemplifies how the longstanding enforcement partnership between HCR’s Tenant Protection Unit and Attorney General James continues to protect New Yorkers from unlawful schemes to deregulate apartments and overcharge tenants. By systematically rooting out fraudulent deregulation and restoring legal rents, we are securing the rights of millions of rent-regulated tenants and building on Governor Hochul’s efforts to strengthen tenant protections and improve enforcement of the rent laws.”

In March 2020, both agencies independently began investigations into the rent stabilization status of Emerald’s properties and the enforcement of legal rents at certain rent-stabilized units. Both OAG and HCR found that Emerald had illegally deregulated units and overcharged tenants for rent, in clear violation of New York’s Rent Stabilization Law.

As a result of the settlement, 21 illegally deregulated units must be reinstated under rent stabilization within 60 days. Additionally, tenants who were charged above the legal rent thresholds are receiving direct reimbursements totaling $54,799.66. Emerald is also required to correct rent registrations and notify impacted tenants within 30 days. The failure to meet any aspect of these obligations carries a financial penalty of $500 per day per violation.

Emerald has filed for bankruptcy for several of its rent-stabilized properties, including those re-regulated as part of this settlement. With some of the buildings soon to be transferred to Emerald’s lender, OAG and HCR have also secured an agreement with the lender ensuring that new owners will be bound to the settlement in the event that Emerald isn't able to comply with the rent regulation and security deposit measures before the transfer of the buildings.