New York Attorney General Letitia James and New York State Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas announced the re-regulation of 21 New York City apartments owned by Emerald Equity Group, LLC (Emerald), a real estate company with a number of buildings in East Harlem, Manhattan. An Office of the Attorney General (OAG) and HCR investigation found that Emerald had improperly and illegally deregulated rent-stabilized units, overcharged tenants, and failed to keep tenants’ security deposits in separate accounts as required by law. In addition to returning the illegally deregulated apartments to rent stabilization, Attorney General James is requiring Emerald to repay $54,799.66 to the tenants who were overcharged for their rent.
“Emerald blatantly ignored rent stabilization laws, denying many New Yorkers access to affordable, reliable housing,” said Attorney General James. “By returning these units to rent stabilization and ensuring tenants are reimbursed for overcharges, we are bringing justice to the families that Emerald harmed and ensuring more fair and equitable housing for future renters. Every New Yorker deserves a fair, stable, and secure place to live.”
“This case exemplifies how the longstanding enforcement partnership between HCR’s Tenant Protection Unit and Attorney General James continues to protect New Yorkers from unlawful schemes to deregulate apartments and overcharge tenants,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas. “By systematically rooting out fraudulent deregulation and restoring legal rents, we are securing the rights of millions of rent-regulated tenants and building on Governor Hochul’s efforts to strengthen tenant protections and improve enforcement of the rent laws.”
In March 2020, OAG and HCR separately opened investigations into the rent stabilization status of Emerald’s properties and the enforcement of legal rents at certain rent-stabilized units. Both OAG and HCR found that Emerald had illegally deregulated units and overcharged tenants for rent, in clear violation of New York’s Rent Stabilization Law. When investigating the illegal deregulation and improper rents, OAG and HCR also discovered that Emerald had failed to keep tenants’ security deposits in separate security deposit savings accounts, as is required by New York law. These individual accounts are necessary to protect tenants’ funds from being mixed with their landlord’s general business funds and can shield security deposits from being used for improper purposes. It also ensures that security deposits accrue the appropriate interest while being held by the landlord.
Emerald must return 21 improperly deregulated units to rent stabilization within 60 days and correct the rent price for any apartments whose rents were improperly inflated. Emerald has 30 days to notify all impacted tenants of the changes and, for any tenants that were overcharged, return the excess rent money they illegally collected directly to the renters. It must also establish segregated accounts for all tenant security deposits and ensure all of its units are brought into compliance with rent regulation laws moving forward. If Emerald fails to execute any aspect of this agreement, they must pay a $500 daily penalty for each violation until resolved.
Emerald has filed for bankruptcy for several of its rent-stabilized properties, including those re-regulated as part of this settlement. As part of bankruptcy proceedings, the company was required to conduct an audit of its portfolio, which uncovered at least 20 units whose registered rents differed from the legal regulated rent. Those units’ legal rents are being adjusted accordingly.
Emerald owns and manages several rent-stabilized properties in New York, including:
- 203 West 107th Street;
- 210 West 107th Street;
- 220 West 107th Street;
- 230 West 107th Street;
- 124 - 136 East 117th Street;
- 215 East 117th Street;
- 231 East 117th Street;
- 235 East 117th Street;
- 244 East 117th Street;
- 316 East 117th Street;
- 322 East 117th Street;
- 326 East 117th Street; and
- 1661 Park Avenue.
These 13 buildings are currently the subject of Emerald’s bankruptcy proceeding and will soon be transferred to Emerald’s lender. The OAG and HCR have also secured an agreement with the lender ensuring that new owners will be bound to the settlement as well in the event that Emerald is not able to comply with the rent regulation and security deposit measures before the transfer of the buildings.
This settlement is the latest action in Attorney General James’ ongoing efforts to protect tenants and enforce New York’s rent regulation laws. In September 2024, Attorney General James, in partnership with HCR, 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. In January 2022, Attorney General James banned Raphael Toledano from real estate business in New York, after he failed to uphold his 2019 $3 million agreement with Attorney General James for harassing tenants and violating rent stabilization laws. In December 2020, Attorney General James also won more than $1 million in rent credits from Madison Realty Capital for aiding and abetting Toledano’s harassment and illegal deregulation.
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