AG: No Mid-Lease Rent Hikes at Stuy-Town

NEW YORK CITY-The owners of Peter Cooper Village and Stuyvesant Town have agreed to revoke mid-lease rent increases for nearly 1,000 tenants whose leasing agents told them that such increases wouldn't occur, New York State Attorney General Eric Schneiderman said Tuesday afternoon. The agreement with the AG's office also includes a ban on mid-lease increases for more than 2,000 other tenants whose leases allowed for such rent adjustments.

Tenants at the massive Midtown South apartment complex who have already filed to terminate their leases may withdraw the terminations and instead stay in their apartments without rent increases, according to Schneiderman's office. They must submit an affidavit postmarked by June 30 to the AG's office, describing how and when they claim they were misled by a leasing agent.

CWCapital Asset Management, the special servicer that oversees the 11,227-unit complex, informed nearly 1,000 tenants on May 14 that they'd be subject to mid-lease rent hikes. The leases included a rider allowing such increases, but Schneiderman's office received more than a dozen complaints—forwarded by City Council Member Daniel Garodnick, a Stuy-Town resident himself—alleging that leasing agents had misrepresented the rider's meaning, both verbally and by email, when encouraging tenants to sign leases, according to the AG.

In a release, Schneiderman says he's pleased the 11,227-unit complex's owners “cooperated with our office's investigation and have entered into an agreement that ensures tenants are treated fairly: no one who was promised a steady rent will be socked with a mid-lease increase.” He adds that the settlement's prohibition of any additional mid-term rent increases “ensures an end to this latest struggle to keep the neighborhood a haven for the middle class. My office will keep a close watch in the coming weeks to ensure that all aspects of the agreement are honored.”

Following Schneiderman's announcement, CWCAM issued a statement saying that despite “an exhaustive effort” to solicit complaints from residents that leasing agents had misled them “we have received only 10 complaints from affected residents.” Although any such representation would have been superseded by the $173-million class action settlement that was announced in April, “we volunteered to make official our practice of deferring rent increases to the end of a lease term for any resident that has a factual basis for their confusion.”

In addition, according to CWCAM's statement, “we agreed to make official our intention not to issue additional mid-term rent increases. We appreciate the attorney general's assistance in balancing our legal rights with a desire to accommodate any resident that was confused about the content of their lease due to purported misstatements by employees of the managing agent.”

Within Scheniderman's office, the investigation and settlement agreement negotiations were handled by Karla G. Sanchez, executive deputy AG for economic justice; Marissa Piesman, chief of the Real Estate Finance Bureau; Jeffrey Rendin, chief of enforcement for the bureau; Elissa Rossi, assistant AG at the bureau; and Micah Lasher, the AG's chief of staff.