Bronx tenants who said landlord cheated them out of rent control apartments score $1M settlement
A Bronx landlord accused of cheating tenants out of years of discounted rent must cough up $1 million to vindicated residents, the Daily News has learned.
Tenants of 3045 Godwin Terrace in Kingsbridge said their landlord, Godwin Realty Associates, dodged a city law requiring 100% of its apartments be rent regulated in exchange for tax breaks. The tenants, who filed a Bronx Supreme Court lawsuit in 2018, say they were overcharged since at least 2007.
The hefty $1 million settlement did not include an admission of wrongdoing by the landlord. The money will be distributed among roughly 40 tenants by a court-appointed special master. One family in the building will receive more than $100,000.
David Chen, 44, lived in the six-story building since 2007 and watched his rent rise, never knowing the one-bedroom apartment shared with his wife and kids should have been rent regulated.
“I’m just very grateful that a lot of the tenants were made aware of what was going on and if it weren’t for that, we would have never known,” Chen told The News. He declined to say how much money he’ll receive through the deal.
Chen’s rent was up to nearly $1,700 per month for his one bedroom when the tenants in the building took action and sued Godwin.
The housing watchdog group Housing Rights Initiative investigated the 73-unit building and alerted residents that they were allegedly getting cheated. About a third of the building’s residents were living in illegally deregulated apartments, according to HRI.
The landlord at the building was saving money through J-51 tax exemptions, which give landlords tax breaks in exchange for keeping apartments rent regulated, according to the suit.
Aaron Carr, the founder of Housing Rights Initiative, said an analysis found that more than 1,000 buildings are out of compliance with J-51 rent regulation requirements. His group has been involved in dozens of lawsuits alleging similar abuse of tax incentives meant to keep apartments affordable. He’s an outspoken critic of state agencies he says do not do enough to hold landlords accountable.
“Real estate companies are literally cheating on their tax benefits in broad daylight,” he said.
An HRI analysis of tax statements for the Godwin Terrace building showed the landlord was getting tax breaks, though many of the apartments had been deregulated.
As part of the settlement, tenants’ leases will revert to rent regulation.
“The rents were being raised continually,” Chen recalled of his first decade in the building. “It makes me feel not particularly good. But I’m kind of just happy that things are in a much better place now both in terms of the rent that we’re paying with the new lease and also how the building is managed.”
A lawyer for Godwin Realty did not respond to a request for comment.
Roger Sachar, a lawyer at Newman Ferrara who filed the suit, said the state’s Division of Housing and Community Renewal must pay closer attention to landlords who do not hold up their end of the deal for tax breaks.
“If there’s a speed limit, but never a cop to give a ticket, everyone is going to break the speed limit,” he said.
A Housing and Community Renewal spokesperson said the agency is reaching out to landlords to make sure they comply with the J-51 law, and has “conducted hundreds of investigations, returned more than 89,000 units to regulation, and recovered over $6 million in overcharges for tenants.”