New York Attorney General Letitia James and RuthAnne Visnauskas, Commissioner of New York State Homes and Community Renewal (HCR), have filed a lawsuit against Zara Realty Holding Corp., its principals, and related entities. The suit alleges that Zara Realty repeatedly violated rent stabilization laws by overcharging tenants in Jamaica and Elmhurst, Queens, particularly those who paid rent through New York City Department of Social Services (DSS) housing subsidy programs. According to the complaint, Zara Realty ignored rent reduction orders from HCR’s Office of Rent Administration and sued tenants who did not pay the higher rents, putting them at risk of eviction.
“While hardworking families are battling an affordable housing crisis and fighting to make ends meet, Zara Realty shamelessly took advantage of vulnerable tenants,” said Attorney General James. “New Yorkers should not have to worry that their landlords are willfully deceiving them just to line their own pockets. Let this be a warning: any landlord who tries to cheat their tenants and evade our rent stabilization laws will be hearing from my office.”
“Our Tenant Protection Unit is fighting for New Yorkers every day by protecting them from predatory landlords who try to illegally overcharge their tenants and defy our State’s rent laws,” said HCR Commissioner Visnauskas. “The message from our office and Attorney General James is clear – if landlords fail to abide by the rent laws, if landlords seek fraudulent rent increases, or initiate unlawful evictions – we will not hesitate to take action on behalf of millions of rent-regulated tenants in New York.”
The lawsuit claims that since at least 2022, Zara Realty charged DSS-subsidized tenants the maximum amount allowed under their subsidy program rather than adhering to legal limits set by the Rent Guidelines Board. This resulted in significant overcharges beyond what was legally permitted.
Additionally, the company allegedly disregarded orders from the Office of Rent Administration requiring reductions or freezes in tenant rents due to failure to provide essential services or maintain properties properly. Despite these orders following tenant complaints, Zara Realty continued collecting inflated rents.
Specific cases cited include one tenant whose annual lease saw an eight percent increase when only 3.25 percent was legally allowed; the following year her rent increased by 44 percent. When she refused payment, she faced legal action from Zara Realty. Another tenant continued being overcharged for two years despite a court-ordered freeze on his rent; after refusing further payments on illegal charges, he too faced eviction proceedings.
With this lawsuit, OAG and HCR seek a court order stopping Zara Realty from collecting unlawfully high rents, identifying all affected current and former tenants for refunds and damages, correcting official records with HCR, and issuing new leases as required.
Attorney General James and HCR previously brought suit against Zara Realty in March 2019 for similar alleged practices involving excessive fees and improper leases targeting immigrant middle- and low-income residents across dozens of buildings; litigation remains ongoing.
“We applaud Attorney General James and HCR Commissioner Visnauskas for holding these bad actors accountable and for sending a clear message that this type of predatory behavior will not be tolerated,” said DSS Commissioner Molly Wasow Park. “The allegations are particularly appalling since the defendants sought to enrich themselves by taking advantage of subsidies intended to support low-income New Yorkers with a history of housing instability. DSS has taken concrete steps to change rental subsidy processes to prevent bad actors from being able to overcharge tenants in receipt of city-administered rental subsidies in the future. We look forward to further collaboration with the Office of the Attorney General and HCR to ensure vital government resources are protected.”
“For years, Zara Realty has lined their pockets by exploiting and harassing low-income and immigrant tenants, blatantly disregarding rent laws,” said Maansi Shah, Tenant Organizer at Chhaya Community Development Corporation. “This lawsuit is a major victory for tenants to recover stolen rent and a critical first step in holding this predatory landlord accountable. But the fight for justice is far from over—we need stronger oversight, increased penalties, and closed loopholes to prevent landlords from weaponizing the system against vulnerable tenants.”
This case follows other recent actions by Attorney General James’ office aimed at enforcing tenant protections under state law. Earlier this year they announced re-regulation of 21 apartments with more than $50,000 returned to overcharged renters; last September saw re-regulation or reduced rents in hundreds more units; previous settlements included $4 million recovered after uncovering illegal deregulation schemes as well as bans on individuals found responsible for harassment or violations.
HCR’s Tenant Protection Unit has also updated its audit algorithms since 2023 in order to better identify patterns such as non-compliance or harassment among landlords; recent enforcement actions included settlements totaling hundreds of thousands of dollars against owners found violating regulations.
For OAG’s Housing Protection Unit—part of its Division for Social Justice—the matter is managed by Unit Chief Brent Meltzer along with Senior Enforcement Counsel Rachel Hannaford and Legal Assistant Cecily Mills.
