The New York State Supreme Court ruled that a realty company that owns low-income housing in Queens can be held responsible for multiple allegations of targeting and scamming tenants who live in their properties earlier this week.
Zara Realty, a real estate company in Jamaica, attempted to dismiss a 2019 lawsuit from New York Attorney General Letitia James over violations of New York’s rent stabilization and tenant harassment laws. However, Justice Katheryn E. Freed ruled against Zara’s claims earlier this week.
“This ruling ensures that the owners of Zara Realty can no longer hide behind an LLC, and can be held liable for their blatant pattern of tenant harassment,” James said. “We have zero tolerance for landlords who exploit tenants by ignoring rent regulation laws and forcing low-income families to pay excessive fees in exchange for bogus services.”
Zara Realty and it’s LLC, Jasmine Homes, stand accused of evading rent stabilization laws in order to profit thousands of dollars out of tenants through illegal charges.
“Courts routinely deny procedural motions made by a party early in a proceeding. Denial of a procedural motion has no bearing on the validity of the allegations,” said Niles Welikson and Randi Gilbert, two attorneys for Zara Realty. “This ruling does not change our view: That the allegations, many of them factually inaccurate, concern complex legal issues that are subject to various interpretations under the law, including conflicting judicial opinions, and will be vigorously contested. The terms of the leases Zara offers, as well as any late fees or security fees, have been and are in compliance with the law.”
In addition, Wlikson and Gilbert said that the turnover rate among rent regulated tenants in Zara Realty buildings is low and that the company has been providing free face masks to tenants, cleaning and disinfecting public spaces daily and cleaning individual units when needed during the COVID-19 crisis.
Zara Realty, which owns over 38 rent-stabilized buildings, often demanded and charged new tenants a fee for new keys, room reservation fees, advanced rent, and security deposits that were often three to four times larger than a month’s worth of rent, according to James. Zara Realty would charge tenants $200 for one new key – a payment that was required because the company would change the locks before each new tenant moved in – the attorney general alleges.
Once tenants moved into Zara’s property, the company would often charge illegal late fees and fees for entitled services, including regular apartment maintenance, according to James.
In addition to those illegal charges, Zara Realty would charge tenants moving apartments within the same building a brokers fee under the name Jasmine Homes, LLC, a company controlled by the Subraj family, the same family that controls the realty company, James said. This fee is illegal under the Rent Stabilization Code. In some cases, tenants paid more than $11,000 to move into one of Zara Realty’s rent-stabilized apartment, according to James.
“All New Yorkers deserve a safe, decent and affordable place to call home without fear of intimidation or bullying by their landlord,” said Gov. Andrew Cuomo. “We will always take action to stop this type of unscrupulous behavior, and anyone found guilty of it should be punished to the fullest extent of the law.”
Editor’s note: This story was updated at 10:55 a.m., on Monday, May 4, with a statement from Niles Welikson and Randi Gilbert, attorneys for Zara Realty.
Correction: An earlier version of this story listed George Subraj as the owner of Zara Realty. Subraj is deceased. Various members of the Subraj family now control the company.