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Deals & Dealmakers

$1M pay day for tenants overcharged in J-51 scam

Godwin Realty will repay tenants of a Bronx property around $1 million in rent it overcharged.

The Housing Rights Initiative announced that the tenants of 3045 Godwin reached the settlement in their class-action lawsuit filed by Newman-Ferrara LLP against the landlord who illegally overcharged its tenants.

Back in 2018, investigators from Housing Rights Initiative performed a major investigation of 3045 Godwin Terrace which participated in the J-51 Tax Incentive Program. In this investigation, HRI uncovered illegal actions & fraud conducted by the realty companies owning these properties.

Housing Rights Initiative’s investigative efforts were conducted with the support of Assemblymember Jeffrey Dinowitz’s office.

The settlement for 3045 Godwin Terrace has multiple aspects: a refund for the rent overcharges, up to $100,000 for certain tenants (combined amount for refunds total around $1 million), current tenants at 3045 Godwin will receive a major rent reduction (around 20% to 30%), and their units will be returned to rent-stabilization.

The J-51 Tax Incentive Program allows landlords to receive a tax abatement for building rehabilitation. J-51 requires landlords to treat their units as rent-stabilized for the duration of the benefit.

This lawsuit is one of a multitude of class actions generated by HRI which the group believes will ultimately recoup thousands to tens of thousands of rent-stabilized units and hundreds of millions of dollars in rent refunds for the tenants and taxpayers of New York City.

Aaron Carr, Founder and Executive Director of Housing Rights Initiative: “People may celebrate our organization for combating real estate fraud, but the truth of the matter is our existence is a tragedy. Our state housing enforcement agency should do its job and put our non-profit out of business.”

Assemblyman Jeffrey Dinowitz said: “This million-dollar settlement on behalf of tenants at 3045 Godwin Terrace is a great victory. This is an example of a property owner who effectively cheated and lied on their taxes, accepting J-51 and other abatements without fulfilling their obligation to provide rent regulated housing, and there are unfortunately countless others who run the same playbook throughout our city and state. Thank you to Housing Rights Initiative and Newman-Ferrara for working diligently towards this victory on behalf of tenants, and let this be a warning to any property owner who thinks they can perpetuate tax frauds at the expense of tenants.”

Godwin Realty is a general partnership created by the late Richard Albert that owns the property.

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