Attorney General James and Tenant Harassment Prevention Task Force Secure More than $672,000 from NYC Landlord for Creating Unsafe Living Conditions for Tenants

NEW YORK – New York Attorney General Letitia James and the Tenant Harassment Prevention Task Force today announced a settlement with Steven Kashanian and his real estate company, BlueSky Management NY, LLC (BlueSky), for violating the New York City construction codes and creating unsafe and unsanitary conditions for hundreds of tenants. BlueSky owns 72 buildings comprising 1,150 units, including rent stabilized units in Brooklyn, Queens, Manhattan, and the Bronx. Tenants at BlueSky’s properties were subjected to dangerous living conditions, including but not limited to illegal construction and frequent interruption of essential services such as gas and water. As a result of today’s settlement, Kashanian and BlueSky will pay $672,578 in civil penalties, provide refunds for tenants who were overcharged rent after February 2023, give tenants $100 credit for each day there was no heat or hot water during the 2022-2023, 2023-2024 and 2024-2025 heat seasons, correct open construction violations, and hire monitors to oversee construction activity and compliance.

The Tenant Harassment Prevention Task Force is comprised of the Office of the Attorney General (OAG), the Tenant Protection Unit (TPU) of New York State Homes and Community Renewal (HCR), the New York City Department of Housing Preservation and Development (HPD), the New York City Department of Buildings (DOB), and the New York City Law Department (NYCLD).

“No family should ever feel unsafe in their home,” said Attorney General James. “BlueSky consistently forced tenants to live in dangerous and unsanitary conditions, putting the safety of New Yorkers and their families at great risk. Today we are putting money back into tenants’ pockets and requiring BlueSky to make their buildings safer and cleaner for the New Yorkers who call them home.” 

“We have zero tolerance for those who target vulnerable tenants to exploit them for profit and attempt to unlawfully deregulate apartments,” said HCR Commissioner Visnauskas. “Working alongside Attorney General Letitia James and New York City’s regulatory agencies, HCR’s Tenant Protection Unit has imposed additional penalties against a landlord for erroneous or missing apartment registrations. This $100,000 fine levied against BlueSky is an essential deterrent to thwart the illegal deregulation of apartments and demonstrates our commitment to protecting the rights of millions of rent regulated tenants.”  

“This settlement against BlueSky, led by the mission-driven and determined agencies and government entities that make up the Tenant Harassment Prevention Task Force, demonstrates the value of coordinated enforcement and how, together, we can do more to ensure that no tenant lives in fear in their own home,” said Acting HPD Commissioner Tigani. “The Task Force acted decisively, drawing on the unique strengths of each agency to secure justice for these tenants. HPD is proud to have played a role in this case, and, more generally, is proud to stand alongside our partners in this important work every day. Let this serve as a clear message: we will not stand idly by while landlords let buildings fall into disrepair – we will take action to ensure our neighbors are protected and housing is made habitable.”

“When city agencies order a landlord to fix ongoing safety issues at their buildings, the nonnegotiable expectation is that those owners will live up to their legal obligations and make the needed repairs,” said DOB Commissioner Oddo. “This important settlement will mean that these repairs will finally happen, and the New Yorkers living at properties owned by BlueSky Management will no longer be put in harm’s way due to hazardous building conditions. We are grateful of the combined efforts of this Task Force, working alongside DOB’s Office of the Tenant Advocate and our Borough Enforcement Unit, to spotlight the important public safety issue of proper building maintenance.”

Between 2018 and 2022, BlueSky purchased scores of distressed buildings in New York City and began construction projects. During their management and operation of these buildings, Task Force members received numerous complaints from tenants about conditions in the buildings, including complaints of unsafe conditions, unpermitted and unsafe construction activities, lack of proper maintenance and repairs, failures to comply with the requirements of rent regulation, and harassment.

The Task Force conducted its own investigation into these complaints, including site inspections, interviews with tenants, and review of documents and agency records. The Task Force found that BlueSky engaged in illegal and unsafe construction projects without the appropriate permits, leaving tenants without access to essential resources such as water, heat, and gas. BlueSky also consistently failed to file the required annual building and unit registrations for rent-stabilized tenants, often denying rent stabilization rights to their tenants, overcharging renters, or deregulating rent-stabilized housing accommodations.

HCR’s TPU found that most of the BlueSky portfolio had not been registered for multiple years. Registrations often ended immediately after BlueSky purchased the building, and some buildings had never been registered by the prior owner, impeding HCR’s oversight in an attempt to obscure the rent stabilized status of apartments and buildings.

Overall, BlueSky has had over 3000 violations in its portfolio and 798 open violations as of May 20, 2025.. Some of the most dangerous violations include lead-based hazards, unsafe or exposed electrical wiring, leaky roofs, pest nuisances, missing or defective smoke and carbon dioxide detectors, and construction work without a permit.  The Task Force also found seven buildings with 20 open lead-based paint hazard violations that remained open for extended periods of time.

The settlement requires BlueSky to file missing registrations, conduct an audit of its rent stabilized apartment portfolio to be reviewed by HCR’s TPU, bring back to regulation any units that were wrongly or erroneously deregulated, provide or amend rent stabilized leases to tenants with correct legal regulated rent, and refund any overcharges.

Kashanian and BlueSky will pay $272,578 in open violations, $300,000 in civil penalties to HPD for Housing Maintenance Code violations and $100,000 to HCR for failing to file rent registrations. BlueSky must also provide credits of $100 for each day tenants had no heat or hot water in the 2022-2023, 2023-2024, and 2024-2025 winter seasons. The settlements also require BlueSky to correct all construction code violations issued by DOB and the Task Force and all Housing Maintenance Code and Multiple Dwelling Law violations and submit all documents and fees for a dismissal request inspection to HPD. BlueSky will also be required to provide affordable housing opportunities in any of the company’s buildings where tenants faced harassment.

For a period of three years, BlueSky will be subject to an independent construction monitor, who will review ongoing construction and BlueSky properties and make unannounced visits to inspect construction projects.

This case is the latest action by Attorney General James to protect low-income tenants. In August 2025, Attorney General James and New York State Homes and Community Renewal (HCR) Commissioner filed a lawsuit against Zara Realty Holding Corp. (Zara Realty), its principals, and affiliated entities for repeatedly violating rent stabilization laws and overcharging rent-stabilized tenants in Jamaica and Elmhurst, Queens. In February, Attorney General James and Commissioner Visnauskas announced the re-regulation of 21 rent stabilized apartments and return of more than $50,000 to tenants who were overcharged. In September 2024, Attorney General James, in partnership with HCR’s TPU, re-regulated 263 illegally deregulated apartments and reduced rents in 43 additional units. In August 2022, Attorney General James secured $4 million from a group of 29 New York City landlords after uncovering an illegal kickback scheme to deregulate hundreds of rent-stabilized apartments in New York City.

This matter was handled by Housing Protection Unit Chief Brent Meltzer, Senior Enforcement Counsel Rachel Hannaford, and Legal Assistant 2 Cecily Mills of the Housing Protection Unit. The Housing Protection Unit is 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.