New York Attorney General Letitia James and New York State Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas on Monday, Dec. 1, filed a lawsuit against Peak Capital Advisors, LLC (Peak), a real estate development company based in New York City, and its operators – Juan David Gomez, Alex Rabin, Amnay Labou, Michael Lohan, Bryan Anderson, Alex Kaskel, and Alex Mendik – for illegally deregulating at least 159 rent stabilized apartments across 31 buildings in Brooklyn and Queens, “while deceiving tenants, investors, lenders, and state housing regulators about the true status of these units.”
With this lawsuit, Attorney General James and HCR are seeking the return of overcharged rents plus treble damages, enforcement of the units’ rent-stabilized status, penalties for violations of law, and the appointment of an independent administrator to audit the entire Peak portfolio for illegal activity.
“It is no secret that New York City is already battling an affordable housing crisis, and yet Peak and its operators still chose to line their own pockets at New Yorkers’ expense,” said Attorney General James. “As these bad actors illegally raked in profits, affordable housing in New York grew even more scarce, and that is unacceptable.
“Let this lawsuit be a warning: when corporate developers and bad landlords try to cheat housing laws, my office will always take aggressive action to stop them,” she added.
“HCR’s Tenant Protection Unit, in partnership with the Office of the Attorney General, conducted an extensive investigation resulting in a lawsuit against Peak Capital Advisors for improperly deregulating dozens of buildings in New York City,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas.
“The investigation showed that none of these Peak properties met legal requirements for deregulation,” she added. “We look forward to returning these buildings to their proper status under the rent stabilization law.
“HCR’s Tenant Protection Unit and the Office of the Attorney General will not allow unlawful profiteering and deregulation,” Visnauskas continued.
James said a joint investigation by the Office of the Attorney General (OAG) and HCR’s Tenant Protection Unit (TPU) found that Peak orchestrated a “deceptive scheme to bypass New York City’s rent stabilization laws in order to rent apartments at inflated rents and make more money.”
Since 2019, James said Peak has acquired and developed dozens of buildings in New York City, many of which were rent-stabilized.
She said Peak “falsely claimed that apartments qualified for deregulation under the ‘substantial rehabilitation’ exemption, which only applies if a building is in substandard condition or seriously deteriorated before renovation, and if it has undergone a full system replacement.”
James said the OAG and HCR’s investigation determined that none of Peak’s properties met these strict legal requirements “because they were not substandard or seriously deteriorated before they were renovated.”
She said the OAG and HCR uncovered that “Peak’s business plan from the outset was to market the apartments to young professionals willing to pay high rents without regard for rent stabilization laws.
“Peak specifically looked for buildings with ‘significant upside potential’ in gentrifying neighborhoods such as Sunnyside, Astoria, Long Island City, and Greenpoint,” James said.
When subpoenaed by HCR for records substantiating deregulation, the attorney general said Peak hired a consultant to draft 31 fraudulent affidavits for Peak’s architect to sign, “which falsely claimed all building systems were substandard.”
She claimed that Peak also deceived new tenants about the rent-stabilized status of their apartments and made them sign leases agreeing that the apartments were deregulated.
The 31 buildings involved in the investigation are: Queens – 48-36 41st St.; 48-33 47th St.; 47-21 47th St.; 5-13 51st Ave.; 45-35 41st St.; 5-35 47th Road; 47-34 45th St.; 47-25 44th St.; 53-17 Skillman Ave.; 35-34 32nd St.; 30-70 44th St.; 47-45 43rd St.; 47-07 47th Ave.; 47-09 47th Ave.; 30-93 44th St.; 41-27 49th St.; 45-42 Vernon Blvd.; 32-30 41st St.; 45-44 40th St.; and 25-59 35th St.
Brooklyn: 70 Middagh St.; 131 Greenpoint Ave.; 586 Manhattan Ave.; 94 Milton St.; 311 Eckford St.; 250 North 6th St.; 515 Graham Ave.; 251 North 8th St.; 154 Atlantic Ave.; 724 Metropolitan Ave.; and 101 Greenpoint Ave.
In the lawsuit filed on Monday, Attorney General James and HCR are asking the court to mandate that Peak reregulate all units that were illegally deregulated, pay treble overcharge penalties to all tenants who were overcharged for illegally inflated rents, return all ill-gotten profits, and pay penalties for violating consumer protection laws.
