State A.G. Settles with Firm Over Maintenance, Harassment Issues

New York State Attorney General Eric Schneiderman recently announced that his office has reached a settlement with Colonial Management over the company’s maintenance of 42 rent-regulated buildings in New York City and its treatment of tenants at those properties.

The agreement requires Colonial Management Group, LLC to provide more than $225,000 in rent credits and restitution to tenants. The agreement also requires that delayed maintenance projects be completed within one year.

The agreement with Colonial Management Group, LLC followed a separate agreement with the majority owners of the 42 buildings. That agreement provided extensive relief for tenants, including more than $1 million in rent credits and restitution.

In November 2013, tenants filed complaints with the attorney general’s office that Colonial Management was engaged in an aggressive campaign to deny them their right to organize, a protected activity under Section 230 of New York’s Real Property Law. Documents reviewed by the attorney general’s office revealed that the owner of Colonial Management had ordered his employees to take down signs posted by tenants to prevent them from holding meetings. According to tenants, Colonial posted false notices throughout the buildings, retaliated against tenants who participated in tenant association meetings, and, in several instances, resorted to intimidation to break up peaceful meetings.

During the investigation, the attorney general found that: (1) Colonial didn’t maintain the buildings; (2) the buildings had multiple outstanding code violations under New York City’s Housing Maintenance Code; and (3) at least two of the buildings were in the city’s Alternative Enforcement Program—a designation that indicates they were among the 200 most physically distressed properties in the city.

The settlement requires the owner and Colonial Management to:

• Provide a one-time rent credit of $600 to tenants in the seven buildings. That money will compensate tenants for illegal fees and overcharges and amounts to more than $140,000 in overall rent credits;
• Provide $50,000 in restitution to tenants of all 42 buildings;
• Dissolve Colonial Management and select a new company to manage the seven buildings;
• Conduct outstanding repairs and correct all code violations within one year;
• Forgo any rent increases for work required to bring the properties into compliance with the city’s Housing Maintenance Code; and
• Provide all tenants with notice of their right to organize and participate in tenant associations, and their right to use community spaces to facilitate their efforts.