A.G. Schneiderman Announces $225K Settlement With Lower East Side Landlord For Harassing Rent-Stabilized Tenants

News from Attorney General Eric T. Schneiderman

May 4, 2017

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Companies Controlled By Sami Mahfar Harassed Rent-Stabilized Tenants Through Unsafe Demolition And Renovations, Creating Unsafe Levels Of Lead

Settlement Includes $175,000 To Support NYC Lead Remediation Efforts In Rent Stabilized Housing 

Attorney General’s New Proposed Legislation Would Subject Landlords to Criminal Penalties for Tenant Harassment

NEW YORK—Attorney General Eric T. Schneiderman today announced a settlement agreement with several companies controlled by Sassan “Sami” Mahfar and Sina Mahfar, which own or owned four residential buildings: 22 Spring Street, 102 Norfolk Street, 113 Stanton Street, and 210 Rivington Street, on New York City’s Lower East Side.  These companies employed several illegal methods to harass rent-regulated tenants, including engaging in construction work that put dangerous amounts of lead into the air, failing to provide essential services such as heat and hot water, and hiring a “relocator” company that used illegal tactics in seeking buyouts from tenants. A number of the affected tenants were Chinese or Spanish-speaking families who had lived in the buildings for many years.

In April, the Attorney General proposed new legislation that would make it easier to criminally prosecute landlords who engage in tenant harassment, including the type of conduct covered in this settlement. Current state law demands prosecutors reach an inexplicably high bar in order to criminally charge landlords with harassment of rent-regulated tenants.

“Landlords must not use harassment or subject tenants to unsafe construction to drive rent-stabilized tenants out of their homes.  Unfortunately, across the city, unscrupulous landlords look to take advantage of New York’s real estate market at the expense of their rent-regulated tenants – and we won’t hesitate to fight back using all tools at our disposal,” said Attorney General Schneiderman. “But landlords who harass and force their tenants to endure unsafe conditions should also face criminal charges  and I call on the legislature to act on my new bill, which would criminalize this type of activity.” 

Between 2013 and 2016, the Mahfars’ companies  which included SMA Equities, LLC, 22 Spring SM, LLC, 22 Spring SMSIS, LLC, 102 Norfolk Street, LLC, 102 Norfolk Street SM, LLC, SM Stanton, LLC, SMSIS Rivington, LLC, and SMBRO Rivington, LLC  undertook a deliberate campaign to coerce their rent-stabilized tenants to move out of their apartments.  The companies engaged in widespread demolition and construction work in the buildings, which failed to comply with federal, state, and local requirements for protecting the health and safety of residents. Repeated inspections found areas under construction containing unsafe lead concentrations, requiring repeated stop-work orders and immediate remediation measures.  At 102 Norfolk Street, for instance, inspectors found lead levels as high as 40,000 and 110,000 micrograms per square foot.  Under the New York City Health Code, the limit for lead concentration on floors is 40 micrograms per square foot.

The companies hired Misidor LLC, a tenant “relocator,” to negotiate buyouts at 22 Spring Street and 210 Rivington.  Misidor’s principal, Michel Pimienta, repeatedly harassed tenants and threatened that, if tenants did not accept buyouts, they would suffer through unsafe and disruptive construction. In October 2014, the Attorney General’s office reached a settlement with Misidor and Pimienta enjoining them from engaging in tenant relocation work and imposing financial penalties. 

Further, the companies failed to make certain required filings with city and state housing agencies and made false filings with the New York City Department of Buildings, including misrepresenting on permit applications for construction that the buildings were not occupied by residential tenants entitled to protections of the rent regulation laws.

Tenants complained that, while undertaking extensive renovations of vacant apartments, the companies failed to correct pending building code violations, including loss of electricity, lack of heat and hot water, and lack of janitorial services, or make needed repairs in rent-regulated apartments. 

The settlement agreement requires that the companies pay $175,000 to the New York City Department of Housing Preservation and Development for lead remediation and/or enforcement and $50,000 in penalties, fees, and costs to the State, comply with all laws and regulations applicable to any residential buildings owned or controlled by the companies or by Sami Mahfar or Sina Mahfar, follow additional procedures designed to protect tenants from harm caused by any future renovations, and hire an independent management company approved by the Attorney General’s office to manage the buildings which they still own.  A number of tenants have already secured substantial rent abatements and other concessions, including the waiver of major capital investment-based rent increases, through their own lawsuits in housing court.  The vast majority of the housing code violations in the buildings have now been cleared.

Attorney General Schneiderman has continued his efforts to protect tenants who are being harassed by their landlords.  Last month, the office indicted Dean Galasso for mortgage fraud,as part of his work with the Tenant Harassment Prevention Task Force, a collaboration between city and state agencies. Attorney General Schneiderman also recently issued a “Know Your Rights” guidance for tenants who are being threatened based on immigration status.

The $175,000 in settlement money to HPD will be used to purchase 15 new X-Ray Florescence (XRF) Equipment. During apartment inspections, HPD’s Code Enforcement team uses XRF Technology to analyze the composition of paint in New York City apartments to identify whether or not lead-based paint is present and determine if it is a threat. The new devices are lighter, faster, more efficient, and will allow for more comprehensive inspection results. Building owners are required by law to remediate any threat of lead-based paint which can be extremely hazardous to children 6 years of age and under. For more information on building owner responsibilities with regard to lead-based paint, visit HPD’s Lead-Based Paint webpage. Rent-regulated tenants should be aware that they do not need to tolerate harassing tactics designed to force them to vacate their apartments. Under the law, landlords who seek to buy out tenants must not use threats, intimidation, frequent and persistent communication or any false information or misrepresentations in the course of making a buyout offer; refrain from offering any additional buyouts to tenants for 180 days if asked to do so in writing; provide all tenant buyout offers in writing; and accompany buyout offers with a full disclosure of tenants’ rights, including the right to refuse the buyout.  Rent-regulated tenants who believe they are being harassed by their landlord should visit the Tenant Harassment Prevention Task Force website at https://www1.nyc.gov/.  

"We cannot and will not stand idly by when unscrupulous building owners put their residents’ lives at risk by failing to correct hazardous conditions," said HPD Commissioner Maria Torres-Springer. "Thanks to the dedication of the NYS Attorney General’s office, this settlement money will allow for the purchase of state-of-the-art tools to better serve residents across the city. These devices will help HPD’s lead unit more effectively and efficiently protect the city’s families and children from the hazardous effects of lead exposure."

"Today's announcement yet again affirms that tenant harassment, poor housing conditions, and bad construction practices have no place in New York," said State Senator Daniel Squadron. "I'm proud to have partnered with the Attorney General, TPU, and state to help ensure Samy Mahfar and bad actors are held accountable in response to tenant concerns. Thank you to Attorney General Schneiderman, Cooper Square Committee, CAAAV, and community members and tenants across the district."

“It is critical that we hold unscrupulous landlords accountable, which is why these actions being taken by the Attorney General and the State around Mahfar’s pattern of tenant harassment are so important,” said Assemblymember Yuh-Line Niou. “The measures being taken here, such as introducing an independent management company, show that results can be achieved when tenants organize and push for their right to safe and stable housing. I thank the Attorney General, Cooper Square Committee, CAAAV and my colleagues for their work on this issue.” 

“After years of harassing, cheating, and intimidating hard-working tenant families, the Mahfars will finally be held accountable,” said Council Member Margaret S. Chin. “It’s my hope these significant fines will serve as a warning to other landlords in the Lower East Side and the rest of the city that these crimes will not be tolerated. I thank Attorney General Schneiderman for his continuing efforts to protect tenants.”

Brandon Kielbasa, Director of Community Organizer, Cooper Square Committee said, “Tenants of SMA Equities buildings endured being under siege from aggressive tenant relocators, construction-as-harassment, and toxic lead dust exposure – the latter two causing repeat violations of NYC’s Housing, Building, & Health Codes. Cooper Square Committee and the Mahfar Tenants Alliance applaud the Attorney General for his investigation into Samy Mahfar's ownership and harassment practices.”

This case was handled by the Bureau of Consumer Frauds and Protection Chief Jane M. Azia and Assistant Attorney General Sarah E. Trombley, under the supervision of the Executive Deputy Attorney General for Economic Justice Manisha M. Sheth.