SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

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THE PEOPLE OF THE STATE OF NEW YORK,
By ERIC T. SCHNEIDERMAN, Attorney General of the
State of New York,
Plaintiff,
-against-

COMPLAINT
Index No.____________

MAROLDA PROPERTIES, INC.;

GREEN LEAF ASSOCIATES, LLC;
FORSYTH GREEN, LLC;
FORSYTH BLUE, LLC;
83-85 BAXTER STREET, LLC;
7 RIVINGTON STREET, LLC;
90 ELIZABETH ST., LLC;
LUDLOW 65 REALTY LLC;
13-15 ESSEX STREET, LLC;
145 AVE. C, LLC;
100 FORSYTH ASSOCIATES, LLC,

IAS Part ____________

Defendants.
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The People of the State of New York, by their attorney, ERIC T. SCHNEIDERMAN,
Attorney General of the State of New York, respectfully allege, upon information and belief:
INTRODUCTION
1.

Defendants are managers and owners of rent-regulated buildings in New York

City who have engaged in repeated illegal and deceptive practices, including serving notices that
threatened to terminate the tenancies of rent-regulated tenants for baseless reasons, bringing
repeated and unsupported housing court cases against rent-regulated tenants, refusing to issue
tenants legally required renewal leases, overcharging tenants, failing to properly account for rent
paid, ignoring requests for repairs and conducting unnecessarily burdensome and obstructive
repairs and renovations, all in an effort to wear rent-regulated tenants down and convince them to
accept buyout offers and/or vacate their apartments. Once vacated, Defendants could then raise
the legal regulated rent for these apartments or deregulate them altogether, thus increasing their

profits.
2.

Beginning in October 2013, various community-based non-profit organizations

began referring tenant complaints about Defendants conduct to the Tenant Protection Unit
(TPU) of the New York State Division of Housing and Community Renewal (DHCR). A
subsequent investigation by TPU, later joined by Plaintiff, uncovered further evidence that
corroborated the tenants complaints of illegal and deceptive conduct.
3.

Defendant Marolda Properties, Inc. (hereinafter Marolda Properties), which is

owned, managed and controlled by various members of the Marolda family including but not
limited to: William Marolda, Lawrence Marolda, and until his recent death, Fred Marolda has
managed as many as approximately 75 buildings, many or most of which contain or contained
rent-regulated apartments. Many of these buildings are located in the East Village and
Chinatown areas of lower Manhattan, but Marolda Properties also manages property throughout
the New York City area and surrounding counties, including in the Bronx, Brooklyn, upper
Manhattan, Yonkers and White Plains. The Marolda family and related investors began
purchasing these buildings in New York City as early as 1976, with the bulk of the buildings
being purchased in the East Village between 1996 and 2001. In 2010, they began a second wave
of purchasing buildings primarily located in the Chinatown neighborhood. Over the past year or
more, the Maroldas and their affiliates have begun to sell some of these buildings.
4.

With respect to many of these properties, the Maroldas have partnered with others

to finance, purchase and own the buildings that Marolda Properties then manages. The Maroldas
and these related investors operate various real estate entities, including the various LLCs entities
that are named as Defendants in this matter (hereinafter collectively the LLC Defendants), and
which were or are engaged in financing and owning the buildings managed by Marolda
Properties. For example, the Maroldas have partnered with Amarjit Lucky Bhalla (sometimes
known as Shalla or Shaula), who founded and controls non-party Ascot Properties NYC,
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LLC, a New York real estate firm which, upon information and belief, Defendants have used to
purchase some or many of their rent-regulated apartment buildings. Amarjit Bhalla is or was
also a manager of Defendants Forsyth Blue, LLC, 100 Forsyth Associates, LLC, and holds or
held significant property interests together with the Maroldas. Similarly, the Maroldas have
partnered with Parvinder Obhrai (also known as Vinny Singh), a manager of Defendants 83-85
Baxter Street, LLC, Ludlow 65 Realty LLC, 13-15 Essex St., LLC, and Forsyth Green LLC.
5.

Most of the LLC Defendants and Marolda Properties share a common address of

46 Trinity Place, New York, NY 10006. Marolda Properties, the LLC Defendants, the Law
Offices of Santo Golino (the Maroldas most frequently used housing court attorneys), the law
office of Coritsidis & Lambros (the Maroldas attorneys for certain real estate purchases and
transactions), and Ascot Properties NYC, LLC maintain offices in this building.
PARTIES AND JURISDICTION
6.

Plaintiff is the People of the State of New York by their attorney, Eric T.

Schneiderman (NYAG).
7.

The NYAG brings this action pursuant to: (i) Executive Law 63(12), under

which the NYAG is empowered to seek injunctive relief, restitution, damages and other
equitable relief, including disgorgement, when a person or business entity engages in repeated
fraudulent or illegal acts or persistent fraud or illegality in carrying on, conducting or transacting
of business; and (ii) General Business Law (GBL) Article 22-A, 349, under which the
NYAG is empowered to seek injunctive relief, restitution, civil penalties, and other equitable
relief, including disgorgement, against any person or business entity that has engaged in
deceptive acts or practices in the conduct of business.
8.

Defendant Marolda Properties is a domestic corporation with its principal place of

business at 46 Trinity Place, New York, New York 10006. Marolda Properties is a property
management company managed and controlled principally by CEO Fred Marolda, recently
3

deceased, and his relatives Lawrence and William Marolda. Marolda Properties manages
residential buildings, including rent-regulated buildings in New York City and Westchester. The
buildings are primarily owned by individual LLCs and partnerships, many of whom are
Defendants, which are or were controlled by members of the Marolda family and a group of
other non-familial investors. During the period relevant to the allegations in this Complaint and
until his death in or around December of 2015, Fred Marolda was the individual who controlled
the day-to-day managerial operations of the buildings. Fred Marolda held and Lawrence and
William Marolda hold active membership or other controlling roles in Marolda Properties and in
many of the Defendant LLCs and partnerships.
9.

Defendant Green Leaf Associates, LLC is a domestic corporation with a place of

business at 46 Trinity Place, 2nd Floor, New York, New York 10006. Green Leaf Associates,
LLC was the owner of the buildings with rent-regulated apartments located at 83-85 Baxter
Street, New York, New York 10013 and is the partial or co-owner of the buildings with rentregulated buildings located at 13 and 15 Essex Street, New York, New York 10002.
10.

Defendant Forsyth Green, LLC is a domestic corporation with a place of business

at 46 Trinity Place, 2nd Floor, New York, New York 10006. Defendant Forsyth Green, LLC
was the partial or co-owner of the buildings with rent-regulated apartments located at 72 Forsyth
Street, 74 Forsyth Street, and 104 Forsyth Street, New York, New York 10002.
11.

Defendant Forsyth Blue, LLC is a domestic corporation with a place of business

at 46 Trinity Place, 2nd Floor, New York, New York 10006. Defendant Forsyth Blue, LLC was
the partial or co-owner of the building with rent-regulated apartments located at 100-102 Forsyth
Street, New York, New York 10002.
12.

Defendant 83-85 Baxter Street, LLC is a domestic corporation with a place

of business at 46 Trinity Place, 2nd Floor, New York, New York 10006. 83-85 Baxter Street,
LLC is the owner of the building with rent-regulated apartments located at 83-85 Baxter Street,
4

New York, New York 10013.

13.

Defendant 7 Rivington Street, LLC is a domestic corporation with a place

of business at 111 5th Ave., 9th Floor, New York, New York 10003. 7 Rivington Street, LLC is
or was the owner of the building with rent-regulated apartments located at 7 Rivington Street,
New York, New York 10002.
14.

Defendant 90 Elizabeth St., LLC is a domestic corporation with a place

of business at 46 Trinity Place, 3rd Floor, New York, New York 10006. 90 Elizabeth St., LLC
was the owner of the building with rent-regulated apartments located at 90 Elizabeth Street, New
York, New York 10013.
15.

Defendant Ludlow 65 Realty LLC is a domestic corporation with a place of

business at 46 Trinity Place, 2nd Floor, New York, New York 10006. Defendant Ludlow 65
Realty LLC is the owner of the building with rent-regulated apartments located at 65 Ludlow
Street, New York, New York 10002.
16.

Defendant 13-15 Essex Street, LLC is a domestic corporation with a place of

business at 46 Trinity Place, 2nd Floor, New York, New York 10006. Defendant 13-15 Essex
Street, LLC is the partial or co-owner of the buildings with rent-regulated apartments located at
13 and 15 Essex Street, New York, New York 10002.
17.

Defendant 145 Avenue C, LLC is a domestic corporation with a place of business

at 46 Trinity Place, 3rd Floor, New York, New York 10006. Defendant 145 Avenue C, LLC was
the partial or co-owner of the buildings with rent-regulated apartments located at 72 Forsyth
Street, 74 Forsyth Street, and 104 Forsyth Street, New York, New York 10002, as well as the
building with rent-regulated apartments located at 145 Avenue C, New York, New York 10009.
18.

Defendant 100 Forsyth Associates, LLC is a domestic corporation with a place of

business at 46 Trinity Place, 2nd Floor, New York, New York 10006. Defendant 100 Forsyth
5

Associates, LLC was the partial or co-owner of the building with rent-regulated apartments
located at 100-102 Forsyth Street, New York, New York 10002.
19.

Personal Jurisdiction exists as to each Defendant because each Defendant is

domiciled within the State of New York and/or regularly transacts business within the State of
New York.
20.

On September 27, 2016, the NYAG sent Defendants a pre-litigation notice,

pursuant to GBL Article 22-A, by certified mail, return receipt requested. The NYAG also sent
Defendants known counsel a courtesy copy of the pre-litigation notice by electronic mail on
September 27, 2016.
The Regulatory Framework of Rent-Regulated Apartments
21.

In New York City, the laws regulating rent-stabilized tenancies are set forth

primarily in the Rent Stabilization Law (RSL), codified at Chapter 4 of Title 26 of the New
York City Administrative Code (NYC Admin. Code), and the Rent Stabilization Code
(RSC), Title 9, Subtitle S, Chapter VIII of the New York Codes, Rules and Regulation
(NYCRR). Similarly, the laws regulating rent-controlled tenancies are set forth primarily in
the New York City Rent and Rehabilitation Law (NYCRRL), codified at Chapter 3 of Title 26
of the New York City Administrative Code and the New York City Rent and Eviction
Regulations (NYCRER), Title 9, Subtitle S, Chapter VII of the NYCRR.
22.

Aside from small annual increases typically permitted by the New York City Rent

Guidelines Board and increases for specific types of major capital improvements that benefit all
tenants in a building, landlords of rent-stabilized units generally may only raise the rent for such
units when there is a vacancy. NYC Admin. Code 26-511(c)(5-1); 9 NYCRR 2522.8(a).
These rent increases may be even larger when there have been substantial improvements to the
space, services, equipment or furnishings of a vacant rent-stabilized apartment. NYC Admin.
Code 26-511(c)(13); 9 NYCRR 2522.4(a)(1). Further, landlords can deregulate rent6

regulated apartments after the rent-regulated tenants vacate if the legal rent reaches the
deregulation threshold. NYC Admin. Code 26-403(e)(2)(k) and 26-504.2(a); 9 NYCRR
2520.11(r) and 2200.2(f)(19). As a result, landlords of rent-regulated apartments are often
advantaged when rent-regulated tenants vacate their apartments, since this allows them to raise
the legal regulated rent, often substantially, and sometimes to deregulate the apartments entirely
if the threshold is met.
23.

Among other requirements, these laws provide that prior to bringing a holdover

proceeding on the grounds that a rent-stabilized tenant no longer occupies the premises as his or
her primary residence, a landlord is required to serve, in a period from 90 to 150 days prior to
expiration of the lease, a notice (known as a Golub notice) on the tenant under 9 NYCRR
2524.2(a) & (c). The Golub notices must set forth, among other things, the grounds for the
removal or eviction of the tenant, including the facts necessary to establish the existence of such
grounds. 9 NYCRR 2524.2(b). Simply alleging in conclusory fashion that a tenant is residing
elsewhere, or even at a specific alternative address, without more, is insufficient to satisfy this
standard. Similarly, boilerplate allegations that building personnel have not seen the tenant are
insufficient.
24.

If a landlord does not serve a rent-stabilized tenant with a Golub or other notice of

a proceeding for removal he or she must provide the tenant with, again in a period from 90 to
150 days prior to the expiration of the lease, notice of expiration and an offer to renew the lease
or rental agreement at the legal regulated rent on the same terms and conditions as the expiring
lease. 9 NYCRR 2523.5(a).
25.

Further, any refusal to provide an offer of a renewal lease to a rent-stabilized

tenant or any attempt to remove a rent-stabilized tenant by eviction other than on a basis
provided for by the Rent Stabilization Code is illegal under 9 NYCRR 2524.1(a). Similarly, 9
NYCRR 2204.1 prohibits any attempt to remove a rent-controlled tenant by eviction other than
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on a basis provided for by the NYCRR or the NYCRER.

26.

If a tenant dies or permanently vacates a rent-stabilized apartment, 9 NYCRR

2523.5(b)(1) requires the owner to accept as a named tenant on the renewal lease for the
apartment family members of the vacating tenant, so long as the family member has lived for at
least two continuous years (or in the case of senior or disabled persons, one continuous year) at
the apartment. The family member who becomes the new named tenant is often referred to as a
successor tenant. Under 9 NYCRR 2523.5(b)(2), the calculation of periods of time required
for a family member to become a successor tenant under 9 NYCRR 2523.5(b)(1) may not be
interrupted while the family member is engaged in active military duty, full-time attendance of
school, or certain other listed activities that take him or her away from the apartment.
27.

New York City Admin. Code 26-512(a) and 9 NYCRR 2525.1 each prohibit

owners of rent-stabilized apartments from charging or collecting any rent in excess of the legal
regulated rent until the end of any lease or rental agreement in effect. Similarly, New York City
Admin. Code 26-412(a) and 9 NYCRR 2205.1(a) prohibit demanding or receiving any rent
for a rent-controlled apartment in excess of the legal regulated rent.
28.

9 NYCRR 2525.2(a) prohibits an owner from evading the legal regulated rent

for a rent-stabilized apartment, including by requiring a tenant to pay or obligating him or her to
pay membership or other fees, or by modification of the practices relating to the payment of
charges, or by modification of the services furnished or required to be furnished with the
apartment. Similarly, 9 NYCRR 2205.2 prohibits the owner from evading the legal regulated
rent for a rent-controlled apartment through such means. One means by which an owner could
attempt to evade the legal regulated rent, as confirmed by an opinion letter of the DHCR, dated
January 5, 2006, 1 is by failing to provide keys free of charge to legal occupants of a suitable age,
thus failing to maintain the services furnished. See 9 NYCRR 2520.6(r) (defining required
1

Available at http://www.nyshcr.org/Rent/OpinionLetters/COL-1938-Services.pdf
8

services under the Rent Stabilization Code); 9 NYCRR 2200.3(b) (defining essential
services under the Rent Control Regulations).
29.

New York City Admin. Code 26-516(c)(2) and 9 NYCRR 2525.5 prohibit an

owner or an owners agent from harassing or engaging in conduct that interferes with, disturbs or
is intended to disturb a rent-stabilized tenants enjoyment of his or her apartment in order to
obtain a vacancy of the apartment or to cause the tenant to waive any right afforded by the rent
stabilization laws. Similarly, NYC Admin. Code 26-412(d) and 9 NYCRR 2205.1(b)
prohibit an owner or an owners agent from harassing or engaging in conduct that interferes
with, disturbs or is intended to disturb a rent-controlled tenants enjoyment of his or her
apartment in order to obtain a vacancy of the apartment or to cause the tenant to waive any right
afforded by the rent regulation laws.
30.

Both 9 NYCRR 2524.1(b) and New York Real Property Law 223-b(1)(b),

prohibit landlords from taking actions, such as commencing eviction proceedings or failing to
renew leases in retaliation for any action taken by a rent-stabilized tenant that is authorized or
required by the rent stabilization laws or that is taken to secure or enforce his or her rights under
such laws. Similarly, NYC Admin. Code 26-412(b) prohibits removing or attempting to
remove any rent-controlled tenant from his or her apartment for refusing to renew a lease
because such tenant or occupant has taken or proposes to take any action authorized by the New
York rent laws or the health code of the city of New York.
31.

In addition, Defendants also violated a number of other laws. For instance, the

New York City Construction Code, NYC Admin. Code 28-105.1, prohibits conducting
construction on or making repairs, replacements or modifications to the use and occupancy of
any building without a written permit having been issued by the Commissioner of Buildings.
Moreover, if owners engage in construction in a building where tenants are currently residing,
they must file a Tenant Protection Plan with the New York City Department of Buildings (NYC
9

DOB) setting forth procedures and requirements to ensure the health and safety of the tenants
under NYC Admin. Code 28-104.8.4.
32.

New York Penal Law 210.45 makes it a class A misdemeanor for a person to

knowingly make a false written statement which he does not believe to be true in a document
that contains a legal notice to the effect that false statements made therein may be punished.
33.

New York GBL, Article 29-H, 601(8) prohibits creditors from claiming or

attempting or threatening to enforce a right with knowledge or reason to know that the right does
not exist.
34.

Finally, GBL, Article 22-A, 349 prohibits deceptive acts and practices in the

conduct of any business, trade, or commerce in the state of New York and Executive Law
63(12) prohibits repeated or persistent illegal conduct or fraud in the carrying on, conducting, or
transaction of business in the state of New York.
Defendants Illegal and Deceptive Legal Proceedings Challenging Tenants Residency and
Succession Rights
35.

From the period of at least 2010 until 2015, Defendants repeatedly filed or

threatened to file illegal and deceptive holdover and non-payment lawsuits against rent-regulated
tenants who reside in buildings owned and/or managed by Defendants. This conduct, and the
time and resources it requires tenants to expend in order to defend these suits, wears tenants
down, coercing them into accepting buyout offers and vacating their apartments so that
Defendants can then raise rents or deregulate the apartments completely.
36.

In the Golub notices that Defendants served on rent-regulated tenants before

bringing holdover proceedings against them, Defendants frequently failed to provide even
minimally specific factual support for their claims that the tenants apartments were not their
primary residences. In some instances, the Defendants failed to list a purported alternative
address for the tenants, instead relying merely on allegations that [a]gents of the landlord have
10

not seen [the tenant(s)] at the subject premises for an extended period of time.
37.

For example, on or around June 18, 2014, Defendants Forsyth Blue, LLC and

Marolda Properties served a rent-stabilized tenant residing at 100 Forsyth Street with a Golub
Notice that provided no basis to support the termination of the tenancy other than Defendants
allegations that:
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38.

Upon information and belief, you do not occupy the subject premises as your primary
residence.
Agents of the landlord have not seen either of you at the subject premises for an
extended period of time.
In fact, many of the tenants who received such notices, a large percentage of

whom are elderly and non-English proficient, have not lived anywhere other than in Defendants
buildings for years or even decades.
39.

For example, in or around January, 2014, Defendants Forsyth Green, LLC, 145

Avenue C, LLC and Marolda Properties served a Golub notice and later a lawsuit on an elderly
rent-regulated tenant who is not proficient in English and resides at 72 Forsyth Street, claiming
that the tenant and his wife did not reside at the apartment as their primary residence. The notice
referred to three other addresses that the tenants supposedly lived at or had recently lived at, even
though the tenant had no knowledge of those other addresses, and had lived at the apartment at
72 Forsyth for 35 years, and even though they do everything in their day-to-day lives near the
apartment and all of their documents refer to the address as their residence. Additionally, even
though the notice alleged that [a]gents of the landlord have not seen you at the subject premises
for an extended period of time, the tenants have known the superintendent of the building for
many years and they see each other almost every day.
40.

Indeed, Defendants frequently sent Golub notices to rent-regulated tenants

claiming that the tenants had not been observed recently at their apartments when, in fact,
superintendents, repairmen or other agents of Defendants commonly ran into or observed them in
11

their buildings and knew or should have known that they were residing at their apartments at the
time the Golub notices were served.
41.

For example, on or around April, 2014, Defendants 83-85 Baxter Street, LLC and

Marolda Properties served a Golub notice on an elderly rent-regulated tenant who is not
proficient in English and resides at 83 Baxter Street, claiming that agents of the landlord had not
seen her at the premises for an extended period of time, even though the tenant has lived at the
apartment since 1971, rarely if ever travels, is active in the local neighborhood and sees the
building superintendent most weekdays at 7 a.m. Indeed, shortly before she received the Golub
notice, the tenant had spoken to Defendants employees at her apartment on several occasions to
discuss issues related to repairs and new keys.
42.

Often, in those instances where Defendants both timely served Golub notices and

listed actual alternative addresses for tenants, the tenants had never lived at the alternative
address or had only lived there many years ago, before moving to their current apartments within
Defendants buildings.
43.

For example, on or around September 30, 2013, Defendants 90 Elizabeth St. LLC

and Marolda Properties served a Golub notice and later court papers on a rent-regulated tenant
who is not proficient in English and resides at 90 Elizabeth Street, alleging that the apartment
was not the tenants primary residence and that his primary residence was in fact either an
address in Brooklyn, New York and/or an address in Little Neck, New York. Yet the tenant
has never heard of the Brooklyn address and the Little Neck address was actually that of one of
his brothers, with whom he had lived for 10 to 12 months in 1998 when he first moved to New
York City. He has not lived at that address since then.
44.

Additionally, Defendants used Pan Associates, a company owned by a former

NYPD detective, to conduct comprehensive online electronic searches, called skip traces, of
more than 100 of their tenants, in an attempt to generate evidence that these tenants primary
12

residences were not in fact in Defendants apartments, ostensibly justifying holdover proceedings
against those tenants.
45.

An analysis of these skip traces, conducted by the TPU and the NYAG, shows

that tenants had frequently ceased residing at, owning, or having some interest in the alternative
address listed in the Golub notices many years before, and instead indicated that the tenants
resided at the apartment owned and managed by Defendants.
46.

For instance, a Golub notice served by Defendants 90 Elizabeth St. LLC and

Marolda Properties on or around April 21, 2014, on an elderly rent-regulated tenant residing at
90 Elizabeth Street claims that the tenant is believed to primarily reside in Brooklyn, NY. Yet
an October 11, 2013 skip trace lists the tenants address as 90 Elizabeth Street, from Jan[uary]
2007 to Present and notes that there are No other addresses listed for the tenants name.
47.

Similarly, a Golub notice served by Defendants Forsyth Blue, LLC and Marolda

Properties on or around October 16, 2013, on a rent-regulated tenant residing at 100 Forsyth
Street claims that tenant is believed to primarily reside at 4717 White Plains Road, Bronx, NY
10470. Yet the skip trace for the same tenant, dated October 4, 2013, clearly states that 100
Forsyth Street is the tenants address and has been since May 2001. It lists as an Other
Address under the tenants name the White Plains address, but this address was in fact the
address of the tenants small business, a Chinese restaurant he owned and operated.
48.

Thus, despite having information in their possession indicating that rent-regulated

tenants are residing in the buildings Defendants own and/or manage, Defendants nevertheless
frequently served the Golub notices and brought suit against these tenants.
49.

In other instances, in response to Golub notices, rent-regulated tenants provided

Defendants with clear documentation of their primary residence in Defendants apartment

buildings, including utility bills, health care correspondence, and benefit documents. Defendants
nevertheless pursued illegal and deceptive holdover lawsuits against them and failed to issue
13

these tenants renewal leases, despite their entitlement to them under the law.
50.

For instance, in or around June 2013, Defendants Ludlow 65 Realty LLC and

Marolda Properties issued a Golub notice to rent-regulated tenants residing at 65 Ludlow Street.
The Golub notice did not allege an alternative primary residence, and after the tenants provided
Defendants with documents including utility bills, health care correspondence, and social
security benefit and food stamp documents all with their address at 65 Ludlow printed on them,
the Defendants pursued a holdover proceeding against them anyway, before discontinuing it a
few months later.
51.

Defendants also brought at least one deceptive and illegal lawsuit based on a rent-

regulated tenants supposed lack of succession rights. On or about September 12, 2013,
Defendants 83-85 Baxter St. LLC and Marolda Properties issued a notice to quit and refused to
provide a legally required lease to the child of a deceased rent-regulated tenant living at 83-85
Baxter Street. The notice to quit and lawsuit alleged that the tenants son was merely a licensee
even though as a family member who has lived in the apartment for 22 years, and whose only
time away from the apartment was during statutorily excepted periods for college and military
service, the tenants son was entitled to remain in the apartment as a successor. Indeed, a skip
trace dated January 24, 2013, shows that Defendants were aware the tenant had resided at the
apartment for more than 17 years since 1996 when he was only 19 years old along with two
other older individuals with the same last name.
52.

In many instances in which Defendants served a Golub notice and/or filed a

holdover or non-payment lawsuit against one of their rent-regulated tenants, Defendants quickly
offered the tenant a buyout, often for just thousands or tens of thousands of dollars, and often in
court once the holdover or non-payment proceedings had commenced. Defendants offered these
unconscionably low buyouts even to those tenants who contested or possessed clear documentary
evidence that the apartment at issue was the tenants primary residence. While the offering of
14

buyouts to tenants is permitted, owners are not allowed to use deception, coercion or harassment
in order to induce tenants into signing these agreements.
53.

For instance, a successor tenant residing at 83-85 Baxter Street was offered

buyouts of $10,000 and $15,000 despite his clear statutory rights as a successor tenant once he
appeared in court for his holdover proceedings.
54.

Additionally, Defendants repeatedly failed to offer renewal leases to rent-

regulated tenants who were entitled to them by law, or provided non-stabilized leases to tenants
they knew or should have known were rent-regulated tenants.
55.

For example, in or around May, 2014, Defendants 83-85 Baxter Street LLC and

Marolda Properties served a rent-regulated tenant residing at 83-85 Baxter Street with a Golub
notice indicating that they would not renew her lease, allegedly because the apartment was not
her primary residence. However, the tenant has lived in the apartment since 1971, is very active
in the neighborhood, and frequently sees the buildings superintendent on weekday mornings.
About five months later, without any explanation, in or around October, 2014, Defendants
informed the tenant that they would be offering her a renewal lease after all.
56.

Further, on or around July, 2012, Defendants 145 Avenue C, LLC, Forsyth Green

LLC, and Marolda Properties provided a rent-stabilized tenant residing at 104 Forsyth Street
with a one-year non-stabilized lease with a rent of $2,500, even though they had registered the
same apartment with DHCR as stabilized with a legal regulated rent of $1,600.
Defendants Non-payment Suits and Overbilling of Tenants
57.

In addition to the actions noted above, Defendants also brought repeated

deceptive litigation against rent-regulated tenants for allegedly failing to timely pay the entirety
of their rent.
58.

For instance, Defendants brought lawsuits against several rent-regulated tenants

for non-payment despite the absence of any documentary evidence demonstrating a rent deficit
15

and/or the tenants submission of evidence to the contrary.

59.

Defendants also charged tenants for rent that they had already received in the

form of credits from New York Citys Senior Citizen Rent Increase Exemption (SCRIE)
program or New York Citys Disability Rent Increase Exemption (DRIE) program.
60.

For instance, in or around March of 2013, Defendants 145 Avenue C, LLC and

Forsyth Green, LLC brought a non-payment action against rent-regulated tenants residing at 104
Forsyth St, including nearly $1,000 in rent that had been had been paid by SCRIE as
specifically noted in the tenants lease by a Marolda employee just two months earlier and
which Defendants therefore knew was not owed by the tenants.
61.

In some cases, Defendants brought non-payment suits against tenants despite the

fact that the tenants had submitted checks for months or more, but which Defendants had failed
to accept, cash or account for.
62.

For instance, in or around June of 2013, Defendants 7 Rivington Street, LLC and

Marolda Properties sent a rent demand letter to two rent-stabilized tenants (one of whom is
elderly), residing at 7 Rivington Street demanding more than $2,400 in rent allegedly owed and
then, in or around July of 2013, filed a non-payment proceeding against the tenants for more than
$1,200 allegedly owed in rent over the course of three months the third such proceeding
brought against the tenants without success. Defendants refused to dismiss the case despite the
tenants insistence that they had paid the rent, instead accusing the tenants of having years earlier
filed the wrong renewal leases with incorrect rent listed in their SCRIE applications, leading the
landlords not to receive the full SCRIE credits. However, contemporaneous SCRIE documents
clearly showed that the SCRIE program acknowledged the correct rent and had fully credited
Defendants.
63.

Additionally, upon taking over ownership and/or management of buildings,

Defendants have repeatedly installed new locks and then required that tenants provide personal
16

documentation including social security numbers to obtain keys.

64.

According to the sworn testimony, dated December 13, 2013, of Minerva Negron,

a Marolda Properties employee, Marolda Properties changes the locks in newly purchased
buildings as part of their meet and greet procedure. The purpose of the meet and greet is to
meet [the tenants]greet them, were going to check their identification, were going to change
the locks in order to know whos who . . . Ms. Negron also stated that this was especially
important [p]articularly in Chinatown, because we dont know peoples last names
65.

Similarly, Defendants have frequently charged existing tenants up to $100 for

each additional set of keys beyond the first two, costing families with more than two legal
occupants hundreds of dollars.
66.

For example, in or around October of 2013, Defendants charged rent-regulated

tenants residing at 90 Elizabeth Street $200 for two extra sets of keys.
Defendants Other Illegal, Deceptive, and Harassing Conduct
67.

In addition to bringing deceptive and illegal suits and overbilling their tenants,

Defendants have engaged in harassment of tenants through a number of other means.

68.

For instance, Defendants locked out rent-regulated tenants by changing the locks

to their apartments or building entrances without providing new keys and/or removing tenants
belongings from their apartments while they were out, sometimes forcing them to go to court to
regain lawful, unobstructed possession and use of their apartments.
69.

For instance, on February 4, 2014, a rent-regulated tenant residing at 90 Elizabeth

Street won a Judgment against Defendant 90 Elizabeth St., LLC for illegally locking him out of
his apartment and removing his possessions under the pretense that he had abandoned it, despite
the fact that his rent had been fully paid and that the apartment contained items that were
inconsistent with abandonment.
70.

Defendants have also failed or refused to make repairs to damaged apartments,

17

including leaking and collapsed ceilings, or to clean up debris from nearby repairs, again
sometimes leaving apartments obstructed or uninhabitable for days or longer.
71.

For instance, in or around January 2014, a ceiling leak occurred in an apartment

of 74 Forsyth Street and a yellowish colored water began leaking into the tenants apartment
from the apartment above. The rent-regulated tenants who reside there called the landlord but he
did not make the repairs. Only when the tenants called the City did the Defendants (Marolda
Properties, Forsyth Green, LLC and 145 Ave. C, LLC) agents come to the apartment, but even
then they merely placed wood over the leak, rather than repairing it. In the same apartment,
shortly after Defendants took over ownership of the buildings, renovations to the building began,
causing dust to fill the air for days at a time and making the tenants 9 year-old child sick.
72.

In a still ongoing and particularly appalling example, Defendants Marolda

Properties, Green Leaf Associates, LLC and 13-15 Essex Street, LLC in early August 2016
removed the toilet used by two elderly rent-stabilized tenants who are not proficient in English
and reside on the third floor of 13-15 Essex Street, ostensibly because the toilet was in the same
room as various gas meters, which apparently would have been problematic when the gas
company, Con Edison, came to inspect. The Defendants now require the tenants to climb three
flights of stairs and use a different toilet on the sixth floor, even though both of the tenants are
elderly and one of them is handicapped, has serious joint issues, and gets cramps when
attempting to use the sixth-floor toilet in the middle of the night. The same tenants have been
without gas for their stove since February of 2016, and instead must use a barely effective hot
plate, which forces them to cook their meals one item of food at a time. Further, if the tenants
leave their kitchen and bathroom windows open, strong smells of food as well as smoke and
grease enter from the ventilator installed directly below the windows, which belongs to the
burger restaurant on the first floor, a commercial tenant. This forces the tenants to leave the
windows of their apartment closed during the summer even though they do not have air
18

conditioning. The tenants and their son have complained about all of these conditions to the
building superintendent on numerous occasions without a substantive response or action being
taken to remedy the situation.
73.

Indeed, a number of Defendants apartment buildings had dozens of open

Housing Maintenance Code violations during the period of 2013 to 2014, including at 83-85
Baxter Street and 13 Essex Street.
74.

Defendants have also harassed tenants by conspicuously serving multiple tenants

in apartments in two adjacent buildings, 72 and 74 Forsyth Street, with Golub notices on their
doors on Christmas Eve, 2012.
75.

Frequently, as Defendants have engaged in such practices with regards to specific

tenants, they have simultaneously used the resulting conditions to attempt to pressure and coerce
the tenants to accept buyout offers and permanently vacate their apartments.
76.

For example, after the lease of a rent-regulated tenant residing at 90 Elizabeth

Street expired without renewal on December 31, 2013, Defendants 90 Elizabeth St., LLC and
Marolda Properties served court papers on the tenant, alleging that the apartment was not the
tenants primary residence. Shortly thereafter, in mid-2014, the tenant spoke to his
superintendent about fixing a leak in his apartment, but the superintendent told him it was not his
business and to call the office. The tenant called twice to ask them to repair the leak, but nobody
ever came. Meanwhile, at the tenants first court appearance, the landlords attorney asked if he
would accept money in exchange for leaving his apartment, and the tenant told the landlord he
did not want to leave.
77.

As noted above, Defendants have also harassed rent-regulated tenants by

repeatedly and illegally requiring them to provide Defendants with their social security numbers
or face lockouts or other consequences.
78.

For instance, in or around October 2013, Defendants Marolda Properties and 90

19

Elizabeth St, LLC took over the building at 90 Elizabeth Street, changed the locks to the front of
the building, and told a rent-regulated tenant residing there that in order to receive his new key
for the door he would need to provide identification, including utility bills and his social security
card.
79.

Additionally, Defendants have repeatedly and illegally engaged in repairs,

renovations and construction without obtaining the legally required permits from NYC DOB.
And even when Defendants did obtain such permits, Defendants frequently engaged in work that
was outside the scope of those permits.
80.

The NYC DOB repeatedly cited Defendants for building violations or issued stop-

work orders to Defendants for engaging in work without the proper permits or for performing
work outside the scope of such permits between the years of 1997 and 2015.
81.

For instance, on or about October 30, 2013, the NYC DOB issued a violation

against Defendant Forsyth Green, LLC, for electrical work, plumbing, and renovations to kitchen
fixtures at apartment 4 of 74 Forsyth Street, which was done without an appropriate permit or the
approval of NYC DOB.
82.

In the instances where Defendants did obtain permits, they often did so by falsely

stating in permit filings that their buildings were unoccupied or did not contain rent-regulated
apartments when in fact the buildings were occupied and did contain rent-regulated units. When
owners answer affirmatively to either question, additional requirements are triggered. For
instance, when an owner reports that the building will remain occupied during construction, they
are required to also submit with their filings a Tenant Protection Plan, which contains
requirements to protect the health and safety of remaining tenants during construction.
83.

The permit applications submitted by Defendants require that the property owner

indicate whether the buildings are occupied and contain units subject to rent regulation and to
sign after reading a warning that any [f]alsification of any statement is a misdemeanor and is
20

punishable by a fine or imprisonment, or both.

84.

Despite this warning, Defendants repeatedly submitted permit applications that

stated buildings were unoccupied and did not contain rent-regulated units, even though they in
fact did. Indeed, Defendants filed corresponding registrations with DHCR listing the same
buildings as both occupied and rent regulated. By falsely reporting that their buildings were
unoccupied during construction, Defendants were able to evade the requirements of the Tenant
Protection Plans they would have been required to create.
85.

For example, on September 26, 2014, the contractor and agent for Defendants

Marolda Properties, Forsyth Blue, LLC and 100 Forsyth Associates, LLC filed an application for
a permit with the NYC DOB for interior renovation for an apartment at 100 Forsyth Street.
Under the Owners Certification the Defendants agent responded No to the questions of
whether the building was occupied and whether it contained rent-controlled or rent-stabilized
units, despite the fact that the building was occupied and contained numerous rent-regulated
units. Thus, Defendants not only signed a false statement under a warning of criminal liability,
but illegally evaded the requirement to create a Tenant Protection Plan to ensure the safety and
health of tenants during the construction.
86.

Moreover, in a number of instances, Defendants have engaged in the conduct

discussed above, including filing holdover and non-payment proceedings or engaging in

unnecessary and unnecessarily burdensome repairs, immediately following and in direct
retaliation for tenants refusal to waive their rights as rent-regulated tenants by accepting buyout
offers.
87.

For example, after Defendants purchased the building at 72 Forsyth Street,

employees of Defendants Marolda Properties, Forsyth Green, LLC and 145 Ave. C., LLC came
to a rent-regulated tenant residing there and asked him if he would be willing to move. When the
tenant, who is not proficient in English, said no, the employee replied court, court, court and in
21

January, 2014, the tenant received a Golub notice stating that the Defendants were not renewing
his lease. Defendants filed a holdover proceeding against him shortly thereafter.
Defendants Illegal, Deceptive, and Harassing Conduct has Caused Pecuniary and NonPecuniary Damage to Defendants Tenants
88.

As a result of Defendants deceptive, fraudulent, and illegal conduct, rent-

regulated tenants in Defendants buildings have been injured, including by:

a. being deceived, misled and coerced by Defendants into giving up their legal
rights to rent-regulated apartments, and thus having to spend thousands of
dollars more per month on rent or move away from neighborhoods where they
have lived for years or decades;
b. missing work and expending time, resources and effort in opposing
Defendants illegal and deceptive holdover, successor, licensee and nonpayment proceedings;
c. being forced to expend time, resources and effort to look for alternative
housing as a result of Defendants deceptive and illegal Golub and other
notices and deceptive and illegal holdover, successor, licensee and nonpayment proceedings and threats of such proceedings;
d. experiencing stress, anxiety, and worry from Defendants deceptive and
illegal Golub and other notices and deceptive and illegal holdover, successor,
licensee and non-payment proceedings and threats of such proceedings;
e. paying excess rent because of Defendants overbilling, overcharging, and
failure to cash, account for, accept or credit rent payments, and interest
thereon, including the payments Defendants charged for additional keys;
f. experiencing stress, anxiety, and worry from Defendants demands for rent
that had already been paid or was not legally due;
22

g. having to expend time, effort, costs and expenses of searching for and paying
rent for alternative housing while tenants were locked out of their apartments,
either literally or constructively, or while Defendants were engaged in
unnecessary and unnecessarily lengthy, burdensome and obstructive repairs
and renovations of tenants apartments;
h. losing some or all enjoyment of their apartments due to Defendants
unnecessary and unnecessarily lengthy, burdensome and obstructive repairs,
modifications and renovations of tenants apartments;
i. losing some or all enjoyment of their apartments due to Defendants failure to
properly engage in necessary repairs, despite tenants notice of conditions of
disrepair and/or violations of the Housing Maintenance Code.
CAUSES OF ACTION
FIRST CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
SERVING UNSUPPORTED EVICTION NOTICES
IN VIOLATION OF 9 NYCRR 2524.2(b)
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 90 Elizabeth St., LLC; 145 Ave. C., LLC;
100 Forsyth Associates, LLC)
89.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

90.

Title 9 of the NYCRR governs, among other things, the notice and procedure

herein.

requirements for evicting or attempting to evict rent-stabilized tenants.

91.

Title 9, NYCRR 2524.2(b) requires that every Golub notice served on a rent-

stabilized tenant must state the grounds under the Rent Stabilization Code upon which the owner
relies for removal or eviction, the facts necessary to establish the existence of such ground, and
the date when the tenant is required to surrender possession.
92.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated 9

23

NYCRR 2524.2(b) by engaging in acts and practices, including, but not limited to: serving
Golub notices on rent-stabilized tenants that do not set forth the facts necessary to establish
grounds under the Rent Stabilization Code upon which the Defendants may rely to remove or
evict a rent-stabilized tenant.
93.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

SECOND CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
PURSUING UNLAWFUL EVICTIONS IN VIOLATION OF 9 NYCRR
2523.5(a) AND (b), 2524.1(a) AND 9 NYCCR 2204.1(a)
(Defendants Marolda Properties; Green Leaf Associates, LLC; 83-85 Baxter Street, LLC;
90 Elizabeth St., LLC)
94.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

95.

Title 9 of the NYCRR governs, among other things, the terms and conditions of

herein.

leases for rent-stabilized tenants and the terms and conditions of evicting or attempting to evict
both rent-stabilized and rent-controlled tenants.
96.

Title 9, NYCRR 2523.5(a) requires that every owner of a rent-stabilized

apartment provide each rent-stabilized tenant, by mail or personal delivery, notice of the
expiration of his or her lease term not more than 150 days and not less than 90 days prior to the
expiration of the tenants lease, and offer to renew the lease or rental agreement at the legal
regulated rent and on the same terms and conditions as the expiring lease.
97.

Title 9, NYCRR 2523.5(b)(1) requires that an owner of a rent-stabilized

apartment must accept as a named tenant on the renewal lease for the apartment, any family
member of a rent-stabilized tenant who is vacating the apartment, so long as that family member
has lived for at least two continuous years at the apartment, or in the case of a senior citizen or
disabled person, has lived at the apartment for at least one continuous year. Title 9, NYCRR
24

2523.5(b)(2) provides that the calculation of periods of time required for a family member to
become a named tenant under 9 NYCRR 2523.5(b)(1) shall not be deemed to be interrupted
during the time in which a family member is engaged in active military duty, full-time
attendance of school, or certain other listed activities.
98.

Title 9, NYCRR 2524.1(a) prohibits denying a rent-stabilized tenant a renewal

lease or removing a tenant from a rent-stabilized apartment by an action to evict or recover

possession except on a basis permitted by the Rent Stabilization Code.
99.

Title 9, NYCRR 2204.1(a) prohibits removing, evicting or attempting to remove

or evict a rent-controlled tenant except on bases permitted by law, as set forth in the NYC Rent
Control Regulations.
100.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated 9

NYCRR 2523.5(a) and (b)(1), 2524.1(a) and 9 NYCRR 2204.1(a) by engaging in acts and
practices, including, but not limited to: denying and failing to offer renewal leases to rentregulated tenants who were entitled to them by law and filing holdover, succession and licensee
proceedings against rent-regulated tenants without sufficient factual basis under the applicable
rent laws.
101.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

THIRD CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
EVADING THE LEGAL REGULATED RENT AND CHARGING
EXECESS RENT IN VIOLATION OF NYC ADMIN. CODE 26-512(a)
AND 26-412(a)
(Defendants Marolda Properties; Forsyth Green, LLC; 7 Rivington Street, LLC; 90
Elizabeth St., LLC; 145 Ave. C., LLC)
102.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

herein.
25

103.

NYC Administrative Code Title 26 governs, among other things, the rents that

may be charged to rent-regulated tenants.

104.

NYC Admin. Code 26-512(a) prohibits charging or collecting any rent in excess

of the legally stabilized rent until the end of any lease or rental agreement in effect.
105.

NYC Admin. Code 26-412(a) prohibits demanding or receiving any rent for a

rent-controlled apartment in excess of the legal regulated rent.

106.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

NYC Admin. Code 26-512(a) and NYC Admin. Code 26-412(a) by engaging in acts and
practices, including, but not limited to: failing to cash and account for their rent-regulated
tenants rent checks; demanding rent from rent-regulated tenants that has already been paid;
overbilling for public benefit credits that are not legally due; charging rent-regulated tenants for
additional keys for locks that Defendants unilaterally changed; and by filing and threatening to
file suit against rent-regulated tenants for rent charges that they did not owe.
107.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

FOURTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
EVADING THE LEGAL REGULATED RENT AND CHARGING
EXECESS RENT IN VIOLATION OF 9 NYCRR 2525.1 AND 2525.2(a)
AND 9 NYCRR 2205.1(a) AND 2205.2
(Defendants Marolda Properties; Forsyth Green, LLC; 7 Rivington Street, LLC; 90
Elizabeth St., LLC; 145 Ave. C., LLC)
108.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

109.

Title 9 of the NYCRR governs, among other things, the rents that may be charged

herein.

to rent-regulated tenants.
110.

Title 9, NYCRR 2525.1 prohibits demanding or receiving any rent for a rent26

stabilized apartment in excess of the legal regulated rent.

111.

Title 9, NYCRR 2525.2(a) prohibits evading the legal regulated rent for a rent-

stabilized apartment, including by requiring a tenant to pay or obligating him or her to pay
membership or other fees, or by modification of the practices relating to the payment of charges,
or by modification of the services furnished or required to be furnished with the apartment.
112.

Title 9, NYCRR 2205.1(a) prohibits demanding or receiving any rent for a rent-

controlled apartment in excess of the legal regulated rent.

113.

Title 9, NYCRR 2205.2 prohibits evading the legal regulated rent for a rent-

controlled apartment, including by requiring a tenant to pay or obligating him or her to pay
membership or other fees, or by modification of the practices relating to the payment of charges,
or by modification of the services furnished or required to be furnished with the apartment.
114.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated 9

NYCRR 2525.1 and 2525.2(a) and 9 NYCRR 2205.1(a) and 2205.2 by engaging in acts
and practices, including, but not limited to: failing to cash and account for their rent-regulated
tenants rent checks; demanding rent from rent-regulated tenants that has already been paid;
overbilling for public benefit credits that are not legally due; charging rent-regulated tenants for
additional keys for locks that Defendants unilaterally changed; and by filing and threatening to
file suit against rent-regulated tenants for rent charges that they did not owe.
115.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

27

FIFTH CAUSE OF ACTION

PURSUANT TO EXECUTIVE LAW 63(12)
TENANT HARASSMENT IN VIOLATION OF NYC ADMIN. CODE
26-516(c)(2) AND 26-412(d)
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 90 Elizabeth St., LLC; Ludlow 65 Realty
LLC; 13-15 Essex Street, LLC; 145 Ave. C., LLC; 100 Forsyth Associates, LLC)
116.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

117.

New York City Administrative Code Article 26 prohibits, among other things,

herein.

harassing rent-regulated tenants with the intent to obtain a vacancy.

118.

New York City Admin. Code 26-516(c)(2) prohibits harassing a rent-stabilized

tenant to obtain vacancy of his or her accommodation.

119.

New York City Admin. Code 26-412(d) prohibits engaging in any course of

conduct that interferes with, disturbs, or is intended to interfere with or disturb the comfort,
peace, repose or quiet of a rent-controlled tenant in his or her use or occupancy of an apartment,
with an intent to cause the tenant to vacate or surrender his or her apartment or waive any right
as a tenant.
120.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

NYC Admin. Code 26-516(c)(2) and 26-412(d) by engaging in acts and practices, including,
but not limited to: serving deceptive and illegal Golub and other predicate notices; filing
deceptive and illegal holdover, succession and licensee proceedings against rent-regulated
tenants; failing to offer renewal leases to rent-regulated tenants who were entitled to them by
law; failing to cash and account for tenants rent checks; demanding rent that had already been
paid; overbilling tenants for public benefit credits that are not legally due; charging tenants for
additional keys for locks that Defendants unilaterally changed; filing and threatening to file suit
against tenants for rent charges that they did not owe; engaging in lockouts; refusing to conduct
28

necessary repairs; and conducting unnecessary repairs, each for the purpose of causing
Defendants tenants to vacate their rent-regulated housing accommodations.
121.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

SIXTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
TENANT HARASSMENT IN VIOLATION OF
9 NYCRR 2525.5 AND 2205.1(b)
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 90 Elizabeth St., LLC; Ludlow 65 Realty
LLC; 13-15 Essex Street, LLC; 145 Ave. C., LLC; 100 Forsyth Associates, LLC)
122.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

123.

Title 9 of the NYCRR prohibits, among other things, harassing rent-regulated

herein.

tenants with the intent to obtain a vacancy.

124.

Title 9, NYCRR 2525.5 prohibits an owner of a rent-stabilized apartment or his

or her agent from engaging in any course of conduct that interferes with, disturbs, or is intended
to disturb the privacy, comfort, peace, repose or quiet enjoyment of a tenant in his or her use or
occupancy of the housing accommodation, or that is intended to cause the tenant to vacate the
apartment or waive any right afforded by the Rent Stabilization Code.
125.

Title 9, NYCRR 2205.1(b) prohibits an owner of a rent-controlled apartment or

his or her agent from engaging in any course of conduct that interferes with, disturbs, or is
intended to disturb the privacy, comfort, peace, repose or quiet enjoyment of a tenant in his or
her use or occupancy of the housing accommodation, or that is intended to cause the tenant to
vacate the apartment or waive any right afforded by the Rent and Rehabilitation Law.
126.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated 9

NYCRR 2525.5 and 9 NYCRR 2205.1(b) by engaging in acts and practices, including, but
not limited to: serving deceptive and illegal Golub and other predicate notices; filing deceptive
29

and illegal holdover, succession and licensee proceedings against rent-regulated tenants; failing
to offer renewal leases to rent-regulated tenants who were entitled to them by law; failing to cash
and account for rent-regulated tenants rent checks; demanding rent that had already been paid;
overbilling rent-regulated tenants for public benefit credits that are not legally due; charging
rent-regulated tenants for additional keys for locks that Defendants unilaterally changed; filing
and threatening to file suit against rent-regulated tenants for rent charges that they did not owe;
engaging in lockouts; refusing to conduct necessary repairs; and conducting unnecessary repairs,
each for the purpose of causing Defendants tenants to vacate their rent-regulated housing
accommodations.
127.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

SEVENTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
RETALIATION IN VIOLATION OF NY
REAL PROPERTY LAW 223-b(1)(b)
(Defendant Marolda Properties)
128.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

129.

New York Real Property Law 223-b(1)(b) prohibits a landlord from serving a

herein.

notice to quit or commencing an action to recover possession of real property in retaliation for a
tenant taking an action in good faith to secure or enforce any rights under his or her lease or
under the laws of New York or New York City which has as its objective the regulation of
housing premises.
130.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

New York Real Property Law 223-b(1)(b) by engaging in acts and practices, including, but not
limited to: filing holdover and non-payment proceedings immediately following and in direct
30

retaliation for tenants opposition to Defendants prior holdover and non-payment proceedings
and in retaliation for tenants refusal to waive their rights by accepting buyout offers.
131.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

EIGHTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
RETALIATION IN VIOLATION OF NYC ADMIN. CODE 26-412(b)
(Defendant Marolda Properties)
132.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

133.

NYC Admin. Code 26-412(b) prohibits removing or attempting to remove any

herein.

rent-controlled tenant from his or her apartment for refusing to renew a lease because such tenant
or occupant has taken or proposes to take any action authorized by the New York rent control
laws or the health code of the city of New York.
134.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

NYC Admin. Code 26-412(b) by engaging in acts and practices, including, but not limited to:
filing holdover and non-payment proceedings immediately following and in direct retaliation for
tenants opposition to Defendants prior holdover and non-payment proceedings and in
retaliation for tenants refusal to waive their rights by accepting buyout offers.
135.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

NINTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
RETALIATION IN VIOLATION OF 9 NYCRR 2524.1(b)
(Defendant Marolda Properties)
136.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

herein.

31

137.

Title 9, NYCRR 2524.1(b) prohibits removing or attempting to remove any

rent-stabilized tenant from his or her apartment or refusing to renew a lease because such tenant
has taken or proposes to take any action authorized or required by the New York rent
stabilization laws or any order of the DHCR.
138.

As set forth in paragraphs 1 through 88, Defendant has repeatedly violated

NYCRR 2524.1(b) by engaging in acts and practices, including, but not limited to: filing
holdover and non-payment proceedings immediately following and in direct retaliation for rentstabilized tenants opposition to Defendants prior holdover and non-payment proceedings and in
retaliation for rent-stabilized tenants refusal to waive their rights by accepting buyout offers.
139.

By reason of the foregoing, Defendant has engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

TENTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
ENGAGING IN CONSTRUCTION AND REPAIRS WITHOUT A
PERMIT IN VIOLATION OF NYC ADMIN. CODE 28-105.1
(Defendants Marolda Properties; Forsyth Green, LLC; Forsyth Blue, LLC;
145 Ave. C, LLC; 100 Forsyth Associates, LLC)
140.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

141.

NYC Admin. Code 28-105.1 prohibits constructing, enlarging, altering,

herein.

repairing, moving, demolishing, removing or changing the use and occupancy of any building or
erecting, altering, repairing, removing, converting or replacing any gas, mechanical, plumbing,
or suppression or fire protection system without a written permit having been issued by the
Commissioner of Buildings.
142.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

NYC Admin. Code 28-105.1 by engaging in acts and practices, including, but not limited to:
engaging in repair and construction work without the proper Department of Buildings permits
32

and outside the scope of such permits.

143.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

ELEVENTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
MAKING FALSE STATEMENTS IN VIOLATION OF NY PENAL LAW
210.45
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC; 83-85
Baxter Street, LLC; 90 Elizabeth St., LLC; 13-15 Essex Street, LLC; 145 Ave. C., LLC)
144.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

145.

New York Penal Law 210.45 makes it a class A misdemeanor for a person to

herein.

knowingly make a false written statement which he does not believe to be true in a written
instrument that bears a legally authorized form notice to the effect that false statements made
therein are punishable.
146.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

New York Penal Law 210.45 by engaging in acts and practices, including, but not limited to:
filing false permit applications and forms that incorrectly stated that buildings were unoccupied
and/or not rent regulated, even though they were occupied and rent regulated, and even though
the applications warned that false statements are punishable by a fine, imprisonment, or both.
147.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

TWELFTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
FAILING TO FILE TENANT PROTECTION PLANS AS REQUIRED BY
NYC ADMIN. CODE 28-104.8.4
(Defendants Marolda Properties; Green Leaf Associates LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 90 Elizabeth St., LLC; 13-15 Essex Street,
LLC; 145 Ave. C., LLC; 100 Forsyth Associates, LLC)
148.

NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth

33

herein.
149.

NYC Admin. Code 28-104.8.4 requires a building owner who engages in

construction of an occupied building to file a Tenant Protection Plan, indicating with sufficient
detail the specific units that are or may be occupied during construction, and the means
employed to safeguard the safety and health of the occupants.
150.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

NYC Admin. Code 28-104.8.4 by failing to file Tenant Protection Plans for buildings in which
they were engaging in construction while the building was occupied by tenants.
151.

By reason of the foregoing, Defendants have engaged in repeated and

persistent illegal conduct in violation of Executive Law 63(12).

THIRTEENTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
VIOLATION OF GBL 601(8)
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC; 145
Ave. C, LLC)
152. NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth
herein.
153. GBL, Article 29-H, 601(8) prohibits creditors from claiming or attempting or
threatening to enforce a right with knowledge or reason to know that the right does not exist.
154. As set forth in paragraphs 1 through 88, Defendants have repeatedly violated
GBL 601(8) by engaging in acts and practices, including, but not limited to: demanding rent
that had already been paid; overbilling for public benefit credits that are not legally due; and by
filing and threatening to file suit against tenants for rent charges that they did not owe.
FOURTEENTH CAUSE OF ACTION
VIOLATION OF GBL 349
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 7 Rivington Street, LLC; 90 Elizabeth St.,
LLC; Ludlow 65 Realty LLC; 13-15 Essex Street, LLC; 145 Ave. C., LLC; 100 Forsyth
Associates, LLC)
155. NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth
34

herein.
156.

GBL, Article 22-A, 349 prohibits deceptive acts and practices in the conduct of

any business, trade, or commerce in the state of New York.

157.

As set forth in paragraphs 1 through 88, Defendants have repeatedly violated

GBL 349 by engaging in acts and practices, including, but not limited to: serving deceptive
Golub and other predicate notices; filing deceptive holdover, succession and licensee
proceedings against rent-regulated tenants; failing to offer renewal leases to rent-regulated
tenants who were entitled to them by law; failing to cash and account for their rent-regulated
tenants rent checks; demanding rent that had already been paid; overbilling for public benefit
credits that are not legally due; charging rent-regulated tenants for additional keys for locks that
Defendants unilaterally changed; filing and threatening to file suit against rent-regulated tenants
for rent charges that they did not owe; requiring existing rent-regulated tenants to provide their
social security numbers or face lockouts or other consequence.
FIFTEENTH CAUSE OF ACTION
PURSUANT TO EXECUTIVE LAW 63(12)
VIOLATION OF GBL 349
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 7 Rivington Street, LLC; 90 Elizabeth St.,
LLC; 145 Ave. C., LLC; 100 Forsyth Associates, LLC)
158. NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth
herein.
159. GBL, Article 22-A, 349 prohibits deceptive acts and practices in the conduct of
any business, trade, or commerce in the state of New York.
160. As set forth in paragraphs 1 through 88, Defendants have repeatedly violated
GBL 349 by engaging in acts and practices, including, but not limited to: serving deceptive
Golub and other predicate notices; filing deceptive holdover, succession and licensee
proceedings against rent-regulated tenants; failing to offer renewal leases to rent-regulated
35

tenants who were entitled to them by law; failing to cash and account for their rent-regulated
tenants rent checks; demanding rent that had already been paid; overbilling for public benefit
credits that are not legally due; filing and threatening to file suit against rent-regulated tenants for
rent charges that they did not owe; and requiring existing rent-regulated tenants to provide their
social security numbers or face lockouts or other consequence.
161. By reason of the foregoing, Defendants have engaged in repeated and persistent
illegal conduct in violation of Executive Law 63(12).
SIXTEENTH CAUSE OF ACTION
VIOLATION EXECUTIVE LAW 63(12) (FRAUD)
(Defendants Marolda Properties; Green Leaf Associates, LLC; Forsyth Green, LLC;
Forsyth Blue, LLC; 83-85 Baxter Street, LLC; 7 Rivington Street, LLC; 90 Elizabeth St.,
LLC; Ludlow 65 Realty LLC; 13-15 Essex Street, LLC; 145 Ave. C., LLC; 100 Forsyth
Associates, LLC)
162. NYAG repeats and re-alleges paragraphs 1 through 88 as if fully set forth
herein.
163. Executive Law 63(12) prohibits repeated and persistent fraud in the carrying on,
conducting, or transaction of business in the state of New York.
164. As set forth in paragraphs 1 through 88, Defendants have repeatedly committed
fraud in violation of Executive Law 63(12) by engaging in acts and practices, including, but
not limited to: serving deceptive Golub and other predicate notices; filing deceptive holdover,
succession and licensee proceedings against rent-regulated tenants; failing to offer renewal leases
to rent-regulated tenants who were entitled to them by law; providing non-stabilized leases to
rent-regulated tenants whose apartments were properly registered as rent stabilized; failing to
cash and account for their rent-regulated tenants rent checks; demanding rent that had already
been paid; overbilling for public benefit credits that are not legally due; filing and threatening to
file suit against rent-regulated tenants for rent charges that they did not owe; and requiring
existing rent-regulated tenants to provide their social security numbers or face lockouts or other
36

consequence.

RELIEF
WHEREFORE, the NYAG respectfully requests that a judgment and order be issued:
1.

Permanently enjoining Defendants from engaging in the fraudulent, deceptive and

illegal conduct alleged in the Complaint, including violating the applicable laws and regulations
governing Rent Stabilization and Rent Control, as contained in 9 NYCRR and NYC Admin.
Code Title 26, the New York City Construction Code, as contained in NYC Admin. Code Title
28, as well as N.Y. Penal Law 210.45, GBL 601(8), GBL 349 and Executive Law 63(12);
2.

Directing Defendants to pay damages to all tenants, known and unknown, who

were injured by their deceptive, fraudulent and illegal practices;

3.

Directing Defendants to create an interest bearing account (the Tenant Relief

Monetary Fund), for the NYAG and TPU to allocate and disperse the damages paid by
Defendants in a fair and equitable manner to those tenants who have been harmed by the illegal
and deceptive practices of Defendants pursuant to general criteria to be developed by the
NYAG, TPU and the Court.
4.

Directing Defendants to disgorge all profits resulting from their fraudulent,

deceptive and illegal practices;

5.

Directing Defendants to do each of the following:

a.

Dismiss or discontinue with prejudice all unsupported, deceptive and

illegal holdover and nonpayment proceedings against rent-regulated tenants;

b.

Issue renewal leases to all rent-regulated tenants who were denied renewal

leases without a basis supported by fact or law;

c.

Comply with all existing court orders in proceedings in which they are a

party, including all holdover and nonpayment proceedings;

d.

Repair all existing Housing Maintenance Code violations in all of the rent37

regulated properties that Defendants own or manage; and thereafter repair all such
violations within seventy-two (72) hours of receipt of notice of such violation,
whether verbally or in writing, or if the notice is of a hazardous condition as
defined by the New York City Housing and Maintenance Code, within twentyfour (24) hours;
e.

Maintain a hard copy file for each rent-regulated apartment they own or

manage (an Apartment File), which shall include all billing records, notices,
written communications, and all other documents that concern that regulated
apartment, as well as a log or entries recording the substance of all verbal or
telephone communications with the tenants or their representatives;
6.

Directing Defendants to ensure that their employees and agents abide by the

applicable laws and the Courts judgment and orders, including by creating comprehensive
written policies and procedures that are subject to the NYAGs approval (the Policies) in order
to implement and ensure compliance with the applicable laws and the Courts judgment and
orders, by providing employees and agents with the Policies and the Courts judgment and
orders, and by implementing appropriate training for employees and agents;
7.

Appointing an independent third-party administrator approved by the NYAG to

monitor and report to the NYAG on Defendants compliance with the Policies and the Courts
judgment and order and for reviewing and responding to all tenant inquiries and complaints
originating from tenants in Defendants buildings, whether those inquiries or complaints are
verbal, by telephone, by email, in writing, or in any other medium;
8.

Directing Defendants to demonstrate appropriate compliance with the Courts

judgment and order to the NYAG for a period of 6 years;

9.

Directing Defendants to pay a civil penalty of $5,000 to the State of New York

for each violation of GBL 349, pursuant to GBL 350-d;

38

10.

Awarding the NYAG additional costs of $2,000.00 against each Defendant

pursuant to CPLR 8303(a)(6);

11.

Granting such other and further relief as the Court deems just and proper.
ERIC T. SCHNEIDERMAN
Attorney General of the State of New York
120 Broadway
New York, NY 10271

New York, New York

November 1, 2016
By:

_____________________________________
Noah H. Popp, Esq.
Assistant Attorney General
Bureau of Consumer Frauds & Protection
120 Broadway, 3rd Floor
New York, NY 10271
(212) 416-8915

JANE M. AZIA
Bureau Chief
LAURA J. LEVINE
Deputy Bureau Chief
JORDAN FRIED
Special Assistant Attorney General
KARIS RASMUSSEN
Special Assistant Attorney General
of Counsel

39