Brooklyn Tenants Sue Empire Holdings for Illegally Overcharging Low-Income Seniors

October 13, 2016, BROOKLYN, N.Y.—Legal Services NYC’s Brooklyn program today filed a lawsuit on behalf of twelve low-income, longtime tenants facing eviction because they cannot afford the exorbitant rent increases that their landlord, Empire Holdings L.P., is illegally demanding from them. The tenants, mostly seniors, are supported by IMPACCT Brooklyn (formerly known as Pratt Area Community Council).

Under New York City’s Neighborhood Entrepreneur Program, the Department of Housing Preservation and Development (HPD) enables neighborhood-based property managers to purchase and manage clusters of City-owned buildings. The properties are eligible for tax credits and tax abatements that are supposed to keep rents affordable for tenants. The new owners enter into regulatory agreements that obligate them and any successors to comply with certain terms and restrictions— in this case, Empire Holdings agreed that rents for longtime tenants including the plaintiffs would start at the lesser of a rent established by HPD or 30% of their income, and then increase by rent stabilized guideline amounts.
 
Despite the fact that the agreement does not expire until December of 2031, the landlord demanded dramatic and unlawful increases when the tenants’ most recent leases expired. Instead of the 0% or 2% increases mandated by rent stabilization, in some cases the rents nearly doubled, making the tenants susceptible to eviction and homelessness. Four of the tenants have already had nonpayment proceedings brought against them because they are unable to afford their new rent.
 
Lidia Quevedo has lived in her Prospect Lefferts Gardens apartment for 17 years, and suffers from asthma and a heart condition. Her sole income derives from Social Security. When her last lease expired, Empire offered her a new one that raised her rent from $543 to $936 a month. She signed the lease because she was afraid of losing her home, but she was unable to pay the full rent. Despite the agreement with HPD that stipulates that Ms. Quevedo’s rent should be no more than 30% of her income, Empire has brought her to court and is trying to evict her from her home.
 
“Since my husband died I have little income and with the rent increase I cannot afford my rent,” said Ms. Quevedo. “I think it is wrong that my landlord is taking advantage of low income people.”
 
Another tenant, Terry Morman, is a veteran whose income derives from disability benefits and food stamps. Last summer, Empire informed her that the rent for her Crown Heights apartment was being raised from $408 to $668. Like Ms. Quevado, she felt she had no choice but to sign and she is currently facing eviction proceedings.
 
“I’m on a fixed income and I’m disabled and this has been very stressful,” said Ms. Morman. “It wasn’t until I talked to people from IMPACCT that I was told that what was happening wasn’t legal, and then I found the papers that showed there was a contract with the city and they weren’t supposed to do that. They act like they are above the law.”
 
“This case is an example of a widespread problem of landlords receiving benefits from the City and then violating their own contractual obligations to the detriment of low income tenants,” said Andrea Tan, Staff Attorney at Brooklyn Legal Services. “Here, Empire is overcharging low-income seniors to illegally line its pockets. This needs to stop, so we are seeking a declaration from the Court stating that the landlord violated its agreement with HPD, and illegally overcharged plaintiffs. In addition we would like the court to establish what the legal rents should be and award plaintiffs damages for the rent they have overpaid. Finally, we are asking the Court to order Empire to stop charging illegal rents and suing plaintiffs and other tenants who are being affected and don’t have legal representation.”

###
 
Contact: Kate Whalen, kwhalen (at) legalservicesnyc.org, 646-442-3654