Landlord Settles Tenants' Harassment Suit

Recently, a settlement deal was reached between the Pinnacle Group, a large New York City landlord, and its rent-regulated tenants, who claimed in a class-action lawsuit that they had been subjected to harassment, unlawful rent increases, and aggressive eviction attempts during the real estate boom. They claimed that the owner had skirted the state's rent regulation and other housing laws and had violated federal racketeering laws.

Under the settlement, the landlord will pay $2.5 million to legal and tenant-rights groups to help current and former tenants make legal claims for damages. The $2.5 million is separate from any damage awards. A court-appointed claims administrator will hear the complaints and decide whether to award compensation. The landlord, which owns about 15,000 apartment units citywide, must also set up a help line and follow new protocols, like carefully notifying tenants of plans to increase rents or start evictions.

The Pinnacle Group, which spent hundreds of millions of dollars buying hundreds of apartment buildings from May 2004 to May 2006, has consistently denied any wrongdoing, saying it was trying to improve conditions in deteriorating buildings. But in 2006, a forensic auditor examined the rents for each of Pinnacle's rent-stabilized units, and as a result of the audit, Pinnacle paid $1 million in rent overcharges and interest to about 300 tenants.