Attorney General James Announces Settlements With Two Sham Co-Ops To Return 90 Apartments To Rent Stabilization Program
NEW YORK—Attorney General Letitia James today announced settlements with two former cooperative corporations in New York City and the return of 90 apartments to the rent-stabilization program. Labe Twerski, the president of the co-op corporations, violated state law by using the cooperatives as rental buildings for decades, and depriving tenants of protections to which they are entitled under rent stabilization laws. Under the settlements, all tenants residing in the buildings (located at 447-448 Central Park West on the Upper West Side and 4395 Broadway in Washington Heights) will be entitled to rent-stabilized leases at affordable rents.
“My office is dedicated to preserving and promoting access to affordable, rent-stabilized housing for the people of New York,” said Attorney General Letitia James. “Landlords should be on notice that they cannot circumvent our state’s rent stabilization laws through the use of sham co-ops. We will always crack down on landlord greed and protect the rights of tenants.”
Under the terms of the settlements, all tenants residing in the buildings will be entitled to rent-stabilized leases at affordable rents and all apartments in each building are now subject to rent stabilization. The settlements reregulate thirty-one (31) apartments under rent stabilization at 447-448 Central Park West and reregulate fifty-nine (59) apartments under rent stabilization at 4395 Broadway.
Labe Twerski is the president of the co-op corporations which own 447-448 Central Park West on the Upper West Side and 4395 Broadway in Washington Heights, respectively. In the late 1980s, both buildings converted from residential rental buildings to co-ops. With some exceptions, apartments in co-operatives are generally exempt from rent stabilization under New York law, given that the purpose of a co-operative is to provide home ownership opportunities. In fact, the certificates of incorporation for both co-operative corporations stated that the purpose of each corporation was to provide homes for shareholders in the co-operative.
Soon after the conversions, however, Twerski’s companies stopped selling shares to homebuyers. Instead, he reacquired all of the shares that had been sold and began renting out all of the apartments at market rate, circumventing the protections of New York’s rent stabilization laws. Operating the buildings exclusively as for-profit rental buildings thus exceeded the authority conferred upon the co-op corporations in their certificates of incorporation, in violation of New York Executive and Business Corporation Law.
Under the terms of the settlements, the owner of the buildings has agreed to abandon the offering plans and re-register the apartments in each building with the New York State Division of Housing and Community Renewal as subject to rent stabilization.
The case was handled by Assistant Attorney General Ryan Goodland, under the supervision of Bureau Chief Brent Meltzer and Chief of Enforcement Louis Solomon in the Real Estate Finance Bureau.
Assurance of Discontinuance - 447/448 Owners Corp., and Dirot Realty Corp.
Assurance of Discontinuance - 4395 Broadway Owners Corp., and Dirot Delaware Corp.