Property Owner Samy Mahfar Settles With State AG For $250,000

113 Stanton St. is one of Mahfar's Lower East Side buildings.

113 Stanton St. is one of Mahfar’s Lower East Side buildings.

State Attorney General Eric Schneiderman announced this morning a $250,000 settlement agreement with several companies controlled by Lower East Side property owner Samy Mahfar.

According to a press release from the AG’s office, the properties in question include: 22 Spring St., 102 Norfolk St., 113 Stanton St. and 210 Rivington St.:

These companies employed several illegal methods to harass rent-regulated tenants, including engaging in construction work that put dangerous amounts of lead into the air, failing to provide essential services such as heat and hot water, and hiring a “relocator” company that used illegal tactics in seeking buyouts from tenants. A number of the affected tenants were Chinese or Spanish-speaking families who had lived in the buildings for many years… Between 2013 and 2016, the Mahfars’ companies… undertook a deliberate campaign to coerce their rent-stabilized tenants to move out of their apartments.  The companies engaged in widespread demolition and construction work in the buildings, which failed to comply with federal, state, and local requirements for protecting the health and safety of residents. Repeated inspections found areas under construction containing unsafe lead concentrations, requiring repeated stop-work orders and immediate remediation measures.  At 102 Norfolk St., for instance, inspectors found lead levels as high as 40,000 and 110,000 micrograms per square foot.  Under the New York City Health Code, the limit for lead concentration on floors is 40 micrograms per square foot… Further, the companies failed to make certain required filings with city and state housing agencies and made false filings with the New York City Department of Buildings, including misrepresenting on permit applications for construction that the buildings were not occupied by residential tenants entitled to protections of the rent regulation laws. Tenants complained that, while undertaking extensive renovations of vacant apartments, the companies failed to correct pending building code violations, including loss of electricity, lack of heat and hot water, and lack of janitorial services, or make needed repairs in rent-regulated apartments.

The agreement requires Mahfar to pay $175,000 to the NYC Department of Housing Preservation and Development (HPD) for lead remediation and/or enforcement and $50,000 in penalties, fees, and costs to the state. The city plans to use the money to purchase new x-ray equipment to detect lead based paint. Mahfar also must hire an independent management company approved by the Attorney General’s office to manage the buildings he still owns.

In a statement, Schneiderman said, “Landlords must not use harassment or subject tenants to unsafe construction to drive rent-stabilized tenants out of their homes.  Unfortunately, across the city, unscrupulous landlords look to take advantage of New York’s real estate market at the expense of their rent-regulated tenants – and we won’t hesitate to fight back using all tools at our disposal… But landlords who harass and force their tenants to endure unsafe conditions should also face criminal charges – and I call on the legislature to act on my new bill, which would criminalize this type of activity.”

We received the following statement today from Samy Mahfar:

SMA Equities and its related entities (‘SMA’ or ‘we’) are very pleased that after the Attorney General reviewed a substantial amount of evidence, the Attorney General’s office worked with us to resolve this matter by a mutually acceptable agreement that avoids the need for expensive and protracted litigation and contains no admission of guilt. Allegations of deliberate misconduct have been completely denied and contradicted by substantial evidence and have never been proven in a court. The settlement is a very positive development, since the settlement, which both the Attorney General and SMA entered into, enables our client to concentrate on new real estate opportunities and further grow their business. When these buildings were acquired, they were very old, had multiple violations and were generating relatively low taxes. Of course, when you improve old buildings and remove violations, there will be some inconvenience and issues relating to the construction. Although some tenants complained, other tenants have praised SMA for substantially improving the quality of life in their buildings. Millions of dollars were invested in these buildings. Building systems were replaced, repaired or upgraded, including installation of a video intercom and security systems. The tenants of one of the buildings, never had leases. We were the first landlord in over 50 years to offer regulated tenants leases assuring them of their regulated status. In one instance, because of improvements and proper reporting of rental income, the building now generates about five times estate taxes for the City. Thus, we significantly improved the buildings and removed violations. They now are in excellent condition and contribute more taxes to the City. The Attorney General acknowledged the removal of a “vast” number of violations. The settlement reaffirms our commitment to the neighborhood and to our long standing policy of fair housing to local residents, improving aging buildings, and to our continued investment in New York City. We believe that our interests, the interests of the tenants and the public officials are aligned. We all want excellent housing. This also reflects our dedication to an ongoing program of capital improvements in aging buildings in order to maintain our properties at the highest possible level.”

You can see the AG’s full news release here, including comments from local elected officials and the Cooper Square Committee, which has advocated on behalf of Mahfar tenants during the past several years.