On Friday of last week, Manhattan District Attorney Alvin L. Bragg announced the creation of the DA’s first-ever Housing and Tenant Protection Unit to target systemic criminal activity by landlords and developers and abuse of government programs. Housed within the Financial Frauds Bureau, the Unit will be led by Assistant District Attorney Chikaelo Ibeabuchi and staffed with three cross-designated Assistant District Attorneys, all with backgrounds in housing and real estate law, as well as financial crimes. In addition, a dedicated Housing Coordinator will support the Unit and supplemental funds have been committed by the DA’s Office to expand the Unit as needed.
The Unit will focus on long-term investigations of organized and structured criminal activity within the real estate industry and will prosecute, among other cases, deed theft and fraud, defrauding government subsidy programs, and patterned harassment of tenants for the purposes of eviction. The types of tenant harassment the Unit plans to prosecute include denying essential heat and hot water, deliberately withholding necessary repairs, commencing holdover proceedings without just cause where cause is required, and conducting hazardous construction designed to make premises uninhabitable.
In addition, the Unit will educate tenants to combat the practice of landlords forcing tenants to accept buyouts of lease agreements. If cases do not rise to the level of criminal activity, the Unit will refer them to other agencies, such as the Department of Buildings and the Department of Housing Preservation and Development, and advocacy groups.
The District Attorney’s announcement garnered support from various public officials, including Congressman Adriano Espaillat and State Senator Cordell Cleare, as well as advocacy groups and community organizations.
The creation of the Unit is another development in the recent trend of increased enforcement in the real estate industry. The Queens DA’s Office already has a Housing and Worker Protection Bureau dedicated to investigating allegations of tenant harassment, deed theft, and other tenant/real estate related crimes. Similarly, the Brooklyn DA’s Office has its own Real Estate Fraud Unit. And, the NY AG’s Office, where DA Bragg previously served as Chief Deputy Attorney General, still has its Real Estate Enforcement Unit (criminal) and Tenant Protection Unit (civil), as well as the Real Estate Finance Bureau (civil), investigating a full range of tenant/real estate matters. This is in addition to other city and state agencies dedicated to rooting out tenant harassment and wrongdoing, including the New York City Mayor’s Office to Protect Tenants (civil), and the Tenant Protection Unit at the New York State Homes and Community Renewal (civil).
The Manhattan DA has an array of statutes at his disposal to combat some of the wrongdoing noted in the press release. Below is a summary of the key statutes his office is likely to use.
- Penal Law §§ 241.02 and 241.05: Harassment of a Rent Regulated Tenant in the First and Second Degrees
- NYC Admin. Code § 26-521: Unlawful Eviction (NYC only)
- Real Property Actions and Proceedings Law § 768: Unlawful Eviction
- Penal Law Article 155: Larceny (Deed Theft and Bank Fraud)
- Penal Law Article 175: Falsifying Business Records and Offering a False Instrument for Filing
- Penal Law Article 187: Residential Mortgage Fraud
- Penal Law Article 470: Money Laundering
- Tax Law §§ 1801-06: Criminal Tax Fraud
The announcement also comes at a time when the economy is changing, COVID relief has dried up, and eviction moratoriums have ended. Landlords and property owners need to take immediate steps to avoid falling into the crosshairs of the new Housing & Protection Unit at the Manhattan DA’s office, as well as other city and state agencies that already exist to protect tenants.
Landlord and property owners are strongly advised to take immediate steps to ensure that their day-to-day policies and procedures fully comply with all local, state and federal law—a tall order in today’s highly regulated market.
Nixon Peabody stands ready to work with property owners to ensure that they are in full compliance with the law, and in unfortunate cases where they fall into the crosshairs of city and state agencies, represent them in both civil and criminal investigations and enforcement actions.
The authors of this alert have unique experience serving real estate divisions within the New York Attorney Generals’ office—Travis Hill served as head of the Real Estate Enforcement Unit of the Criminal Division, Erica F. Buckley served as head of the Real Estate Finance Bureau, and Richard Shore served as Assistant Attorney General of the Real Estate Finance Bureau.