Attorney General James Preserves Dozens of Affordable Housing Units in Manhattan

560-568 Audubon Realty Violated Rent-Stabilization Laws;

Has Agreed to Reverse Illegal Rent Increases and Refund Tenants


NEW YORK – New York Attorney General Letitia James today announced an agreement with a landlord, real estate management company, and its owners to preserve affordable housing and secure refunds for rent-stabilized tenants who were overcharged. The agreement with 560-568 Audubon Realty LLC, Hayco Corp, and its principals — Fred Hay and Alex Hay — resolves an investigation into repeated violations of rent-stabilization laws at 560-568 Audubon Avenue in Manhattan and for overcharging dozens of tenants in rent. Under the terms of the agreement, 560-568 Audubon Realty and its affiliates are required to properly recalculate the legal rents for 59 rent-stabilized tenants in the building and issue tens of thousands of dollars in refunds to tenants who were overcharged, some since 2016.


“Our state has been struggling with rising homelessness and an affordable housing crisis, and we must do all we can to keep New Yorkers in their homes,” said Attorney General James. “Too often, landlords exploit and harass vulnerable tenants to line their own pockets, but this should serve as a clear message that we will not tolerate this behavior. New Yorkers deserve better, and we will go after anyone who violates our laws or threatens peoples’ homes.”


The Office of the Attorney General’s (OAG) investigation, initiated in May 2019, was opened after the 560-568 Audubon Tenant Association and a group of tenants sued 560-568 Audubon Realty and its affiliates for violating multiple rent-stabilization laws. The OAG’s investigation found that 560-568 Audubon Realty and its affiliates were illegally raising rents; using unproven apartment improvements as excuses for the unlawful rent increases; and fraudulently providing tenants with unregulated leases for rent-stabilized apartments. Additionally, the companies were allegedly registering non-existing tenants on annual registration statements submitted to the New York State Division of Housing and Community Renewal (DHCR).


Under the terms of the agreement, 560-568 Audubon Realty and its affiliates will comply with all rent-stabilization laws; recalculate rent for rent-stabilized tenants and properly register stabilized units with DHCR; and provide refunds to tenants who were overcharged.

“I commend Attorney General James on her ongoing commitment to preserve affordable housing throughout our communities,” said U.S. Representative Adriano Espaillat. “Ensuring the availability and preservation of these housing options improves the quality of life for families and cements the economic vitality of our neighborhoods. I have the highest concentration of rent-stabilized housing in my congressional district and have long championed affordable housing to help keep residents in their homes. New Yorkers should never have to fear housing displacement due to the exploitation of landlords, and this settlement is an important step in our efforts to hold anyone who violates our housing laws accountable.”

“Wrongfully profiting off of tenants is disgraceful, especially in the face of an affordable housing crisis in New York City. Rent-stabilization laws are a key strategy to keeping people in their homes, and this must be a warning to any landlord who violates these laws,” said Manhattan Borough President Mark Levine. “I applaud Attorney General James for being an advocate for the tenants of 560-568 Audubon Avenue and securing tens of thousands of dollars in reimbursements for years of excessive rent.”

“One of the roots of homelessness is the affordability crisis, and landlords illegally raising rents intensifies that crisis,” said State Senator Robert Jackson. “This unlawful practice also reduces affordable housing opportunities, pushing New York state's housing crisis over the edge, exacerbating disparities and insecurities in communities, and this is not right. I applaud Attorney General James for her work in bringing justice to the working-class tenants in my district at 560-568 Audubon, who lived in fear of losing their homes. This agreement should put any property owners who fail to obey our rent-stabilization laws on notice. Our state will no longer tolerate this behavior from landlords and will protect all New Yorkers from predatory tactics that stem from greed.”

“We applaud Attorney General James’ steadfast commitment to holding predatory landlords accountable as we look to strengthen and preserve the affordable housing stock in Upper Manhattan,” said Council Member Carmen De La Rosa. “When we say housing is a human right, we mean that the action of guaranteeing dignified housing for tenants must be prioritized. Our community has faced mounting displacement and the Attorney General James' actions today will go a long way in ensuring long-time residents keep their homes in our communities.”

“NMIC strongly supports the work of Attorney General James to enforce the rights of tenants in our community,” said Maria Lizardo, executive director, Northern Manhattan Improvement Corporation (NMIC). “This case represents a significant step towards holding landlords accountable for systemic abuses that have resulted in thousands of tenants being displaced from affordable apartments seriously exacerbating New York City’s housing crisis. NMIC will continue to work with the Attorney General’s Office to build upon this outcome as the fight to preserve our communities continues.”

This case was handled by Senior Enforcement Counsel Rachel Hannaford and Housing Protection Unit Chief Brent Meltzer, with assistance from Research and Analytics Director Jonathan Werberg and Senior Data Analyst Akram Hasanov. The Housing Protection Unit is a part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.