NEW YORK — In a sweeping enforcement victory, the New York State Tenant Protection Unit (TPU) has secured a $3.1 million settlement with the Lefrak Organization, marking its most significant recovery to date. The agreement follows an investigation that exposed illegal water usage charges levied against nearly 2,000 rent-regulated tenants across 59 buildings in New York City.
Governor Kathy Hochul
Governor Kathy Hochul and New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas announced the settlement, calling it a significant win for tenant rights and housing affordability. Under the terms, affected tenants will receive full refunds, including nine percent interest, and Lefrak will permanently cease billing for water beyond standard rent.
“This decisive action puts millions of dollars back into tenants’ pockets and reinforces our unwavering commitment to protect New Yorkers from illegal fees,” Hochul said. “The message is clear: New York will not tolerate attempts to sidestep rent laws.”
Lefrak halted all water surcharges
The TPU launched its investigation in 2024. Upon engagement, Lefrak halted all water surcharges pending the outcome of a legal review by the Office of Rent Administration (ORA). The ORA later ruled that the charges violated rent regulations, prompting Lefrak to end its legal appeals and agree to broad restitution.
Settlement Terms:
- Illegal charges end permanently: As of October 31, 2024, Lefrak will permanently cease collecting water surcharges and will not resume them.
- Full tenant refunds: Current tenants will receive credits for all water charges paid during their tenancy.
- Interest applied: Refunds will include nine percent interest.
- Ongoing monitoring: Lefrak must hire an independent auditor to ensure future compliance.
“This is a good day for tenants and for Lefrak, which stepped up and acted swiftly once the legal issues were clear,” Visnauskas said. “This is how effective government works—delivering real results.”
The TPU operates by uncovering fraudulent landlord practices through audits, investigations, and legal action. It also educates tenants and property owners on their rights and responsibilities under state rent regulations.
This latest enforcement builds on TPU’s recent string of settlements, including $514,000 from landlord Steve Croman in February 2024 and $400,000 from Bottem Realty in March of the same year.
Tenants who suspect they’re being overcharged or harassed are encouraged to contact the TPU at (212) 872-0788 or via email at TPUinfo@hcr.ny.gov.
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Ten years of experience reporting. From car chases and courtroom verdicts to House fires, Holsford thrives during breaking news and finds it a privilege to help drive the conversation in Rockland County and the Greater New York Area. Born in San Bernardino, Thomas is a New York boy at heart. He received his bachelor’s degree in broadcast journalism, specializing in political science and sociology, from the University of Illinois
