We are two tenant associations who joined together to defend ourselves against a corporate real estate investment hydra that seeks to expel us from our homes in order to maximize their profits.

Saturday, February 11, 2012

AJ Clarke’s Role in this Mess

Okay, so you’ve heard some of our issues, but some of you may be wondering, “HOW did this all come about?  How can a new landlord come in, empty half the building and basically double the rents?”

Well, they had help.

AJ Clarke Realty was the management company for our buildings prior to the current landlord/management agency, Fortune East.  Back then we had an actual PERSON to go to with issues, our managing agent, Steve Kaplan.  The buildings were well maintained, spotlessly clean, and there was no funny business with rent checks or lease renewals.  We thought Steve was, if not the most personable guy, at least somewhat efficient and accessible.   Too many NYC tenants were (and are) unaware that a building’s management company (and Realtors and landlords too) may not have their best interest at heart; that they may indeed have a separate agenda that does not include their future living arrangements.  Over a period of about seven years, AJ Clarke stealthily destabilized a good number of apartments.  We can surmise now that AJ Clarke’s REAL role was to prepare the property for sale. 

Here’s how it works:

Say you’re managing a building that the owner is looking to sell and you have X number of rent stabilized apartments.  You know the building will fetch a higher price if only those apartments were market rate.  What do you do?  You take a stabilized apartment and offer it at LESS than the legal rent.  This is called preferred rent.  A tenant moves in thinking they're getting a deal, but when their lease is up, the preferred rent is rescinded.  So they are faced with, not only that rent increase, but the additional percentage tacked on by the Rent Guidelines Board that year.  The tenant moves out and the managing agent can now add an additional 20% vacancy increase.  For instance; if you have an apartment whose rent is registered as $1300 a month, you give it to a new tenant with the preferred rent of $1000 a month.  When it's time to renew the rent is now $1300, plus the RGB approved yearly increase (say, 5%).  The rent is now $1365.  If the tenant is unable or unwilling to absorb the $365 increase they leave and another 20% is tacked on.  The new legal rent is $1638.  Now they don’t pass on these increases to the next tenant, maybe they offer it as $1300…until their lease is up. Bang!  The cycle starts anew.

This is perfectly legal.  Our politicians (our rent laws are controlled by Albany, not the city) have bent to the will of one of the most powerful lobby groups in the state; The Real Estate Board of New York.  Their tireless efforts, combined with generous donation from real estate moguls (see: http://www.observer.com/2010/real-estate/tishman-speyer-lead-pack-cuomo-campagin-contributions ) have effectively eroded our rent laws to the point where we are losing an estimated 20, 0000 units to destabilization a year!


  1. What is going on? How can this be legal? Where is the city agency that oversees all this?

  2. Well, the surprise is surely unkind and unfair. The other point of course is that it helped Kaplan keep the buildings full. Why anyone should think that Rent Stabilized buildings should be exempt from the kind of machinations that caused the mortgage/bank crisis is beyond me. Ever since the Schneider Brothers sold the buildings, surely much of what was done was about turning the buildings and apartments over to maximize their value and the return on investment of any investors. Renting an apartment to someone who doesn't realize that he/she may soon not be able to afford the true rent of the place is not much different from giving a mortgage to someone with insufficient credit.

  3. This has nothing to do with the economic situation and variations on the theme have been going on for as long as there have been landlords and tenants. It has escalated when rent regulations were removed, creating two classes of apartments. Tactics haven't changed dramatically in the last 20 years. The laws keep shifting slightly and landlords find new loopholes to get rent regulated tenants out and non-regulated tenants in. You think you've seen everything and they invent something new.

  4. I think that I just got this trick.... They raised my next rent almost 8% for 1yr. It is unfair....

  5. I need some advice for this