Attorney General James Secures Agreements with Condo Owner, Management Company, and Security Firm to Protect Rent-Stabilized Tenants

Pinnacle Managing and SW Security Violated Rent-Stabilization Laws,  
Investigated Chinese Tenants Without Cause

QUEENS – New York Attorney General Letitia James today announced agreements with a condo owner, its principals, and a security firm over repeated violations of rent stabilization laws and guidance. The agreements with 132-40 Sanford LLC, the sponsor of the Summit at Infinity 8 Condominium located at 132-40 Sanford Avenue, its real estate management company, Pinnacle Managing Co., LLC, and security firm SW Security Services, LLC, resolves violations relating to the modification of a front door lock of the rent-stabilized building located in Flushing, Queens, which ultimately led to several of the building’s tenants, mostly Chinese tenants, forfeiting their rent-stabilized apartments. Under the terms of the agreements, the companies will implement a series of measures that are inclusive of all tenants, undergo anti-discrimination trainings, and donate $50,000 to nonprofit organizations that focus on tenant organizing in Asian communities.

“Tenants have a right to remain in their homes, and we must do all we can to protect affordable housing,” said Attorney General James. “These companies failed to deliver the pinnacle of service to tenants, and their actions forced individuals — particularly Chinese tenants — out of their rent-stabilized homes. Let this serve as a warning that we will not tolerate anyone or any entity that violates our housing laws and threatens New Yorkers’ right to a safe and decent home.”

In 2017, after acquiring the occupied rent-stabilized rental building at 132-40 Sanford Avenue and submitting initial offering documents to the Office of the Attorney General (OAG) to convert the building to a condominium, the sponsor hired SW Security Services to change the building’s front door lock system to an electronic access system. However, the sponsor and Pinnacle Managing failed to apply to the New York State Division of Housing and Community Renewal (DHCR) for permission to change the door lock, in violation of the state’s rent stabilization guidance.

The subsequent key fob distribution process was also overly burdensome on tenants and excluded certain individuals. Tenants were incorrectly told to present a valid New York state ID or other government-issued ID to receive their new key fob. At the time, only U.S. citizens and legal permanent residents qualified for government-issued IDs, leaving the significant number of non-citizen and non-legal permanent resident Chinese tenants of the building with the impression that they were not entitled to access their own homes. According to DHCR guidance, owners must accept any form of identification from tenants as long as it contains a photo of the tenant and it is impermissible for a rent-stabilized owner to require an ID issued by a certain state or jurisdiction.

Additionally, the OAG’s investigation found that in March 2018, when SW Security Services distributed key fobs to tenants, the company’s Director of Investigations impermissibly recorded information from tenant IDs, including the jurisdiction issuing the ID and the address listed. The security company then used the information from the IDs as a basis for recommending 13 private investigations into certain tenants. Ten of the 13 tenants were individuals with Chinese surnames. Both the sponsor and management company authorized those investigations, which resulted in seven of the tenants — six of whom had Chinese surnames — to forfeit their apartments.

As part of the agreement with OAG, 132-40 Sanford LLC and Pinnacle Managing are required to implement a series of measures, including:

  • Donating $50,000 to nonprofit organizations that focus on tenant organizing on behalf of the Asian community;
  • Conducting anti-discrimination training for staff through the New York City Commission on Human Rights;
  • Implementing a form flyer for key fob distribution that does not require a New York ID. Pinnacle Managing is also required to have these flyers (and all applications for keys) translated into languages that are spoken in the building;
  • Agreeing not to record any data from IDs when handing out key fobs to tenants and their guests. The company will also be required to implement a system for key fob distribution that does not require any ID other than one that proves identity and does not require listing of individuals residing in the apartment;
  • Agreeing not to hire any security services firm to distribute key fobs; and
  • Agreeing to comply with DHCR guidance and regulations.

SW Security Services will also implement similar measures pertaining to their own staff, including:

  • Requiring investigators to attend anti-discrimination and rent-stabilization trainings;
  • Implementing policies for interactions with minors; and
  • Agreeing that investigators will not record any data from tenant IDs when handing out key fobs.

“It seems clear that the owners and operators of the Infinity 8 Condominium and the security firm deliberately attempted to target members of our Asian American community in an effort force them out of their own homes,” said State Senator Toby Stavisky. “This practice is abhorrent, shameful, and cannot be tolerated. I applaud Attorney General Letitia James for investigating this discriminatory practice and protecting the rent-stabilized tenants.”

“This is certainly a big step in the right direction and it shows the impact of a pro-tenant attorney general,” said Assemblymember Ron Kim. “I want to thank Attorney General Letitia James for continuing to put the needs of our most vulnerable members first, and I look forward to working more closely with her and her office to hold predatory landlords and developers accountable.”

“Targeting rent-stabilized tenants with private investigations is despicable beyond words, and I am very grateful to Attorney General James for making sure these condo owners are held accountable for their blatant harassment,” said Council Member Peter Koo. “I sincerely hope others looking to flip our rent-stabilized housing stock by intimidating immigrant tenants take note of this case and know that our community is watching, law enforcement is watching, and there are serious repercussions for playing fast and loose with tenants’ rights.”

This matter was handled by Rachel Hannaford, Senior Enforcement Counsel in the Housing Protection Unit, with assistance from Jang W. Lee, Review Section Chief in the Real Estate Finance Bureau, and Jane Landry-Reyes, Assistant Attorney General in the Housing Protection Unit. The Housing Protection Unit is led by Unit Chief Brent Meltzer. The Real Estate Finance Bureau is led by Bureau Chief Jacqueline Dischell. The Housing Protection Unit and Real Estate Finance Bureau are part of the Division for Social Justice, which is overseen by Chief Deputy Attorney General Meghan Faux. The Division for Social Justice is overseen by First Deputy Attorney General Jennifer Levy.

 

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