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Bad landlords owe city millions in unpaid fines, says comptroller

Tens of millions of dollars in fines from bad landlords go uncollected every year, according to an audit by comptroller Scott Stringer.

The Department of Housing Preservation and Development (HPD) fails to collect more than 97 percent of settlements and judgments, according to the report.

And the thousands of tenants face no heat or hot water, lead paint, and other violations while landlords go unpunished.

“We are not giving these families, our fellow New Yorkers, a fair shot. Even though we know these tenants – many who need us most – are often living in unfathomable conditions, we aren’t holding landlords accountable. It’s unfair and it’s unacceptable,” said Stringer .

“When we fail to protect affordable housing for our neighbors, we’re giving landlords a free pass to break the law. When bad landlords win, tenants lose. This system must be based on a higher standard of accountability. This is $34 million that could help address record homelessness, provide more affordable housing, support tenants, and help give working families a fair and fighting chance. Instead, it’s been left on the table, and tenants are suffering. It’s just not right.”

The audit found a massive bureaucratic backlog of more than 1,000 cases exists, some on hold for nearly a decade.

In Fiscal Years 2014 and 2015, nearly $35.1 million in judgments and settlements was to be collected from landlords across more than a thousand cases by HPD’s Judgment Enforcement Unit.

However, $34.2 million was still uncollected as of October 29, 2015, a collection rate of just 2.46 percent.

The audit recommended HPD explore hiring additional attorneys and working with other City agencies to improve its collection rate. The agency agreed with the Comptroller’s recommendations.

When HPD issues violations, it is authorized to impose civil penalties up to $1,000 per day until the hazardous condition is corrected and take landlords to Housing Court to force repairs.

If a landlord fails to make repairs or pay a judgment, the case is transferred to HPD’s Judgment Enforcement Unit for collection.

The investigation uncovered a massive backlog of cases at HPD’s Judgement Enforcement Unit. As of the end of March 2016, nearly half of the 2,100 open cases of violations were not assigned to an attorney – with some left open for nearly a decade.

The audit recommended the HPD work with other City agencies to identify payments to building owners – including, but not limited to rental assistance and tax abatements – which can be redirected to pay back HPD fines and judgments.

It also suggested hiring additional attorneys or reassigning attorneys from other parts of the organization to work through the backlog .

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