Attorney General James and HCR Commissioner Visnauskas Sue New York City Real Estate Developer for Illegally Deregulating Rent Stabilized Apartments

NEW YORK – New York Attorney General Letitia James and New York State Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas today filed a lawsuit against Peak Capital Advisors, LLC (Peak), a real estate development company based in New York City, and its operators – Juan David Gomez, Alex Rabin, Amnay Labou, Michael Lohan, Bryan Anderson, Alex Kaskel, and Alex Mendik – for illegally deregulating at least 159 rent stabilized apartments across 31 buildings in Brooklyn and Queens while deceiving tenants, investors, lenders, and state housing regulators about the true status of these units. With this lawsuit, Attorney General James and HCR are seeking the return of overcharged rents plus treble damages, enforcement of the units’ rent stabilized status, penalties for violations of law, and the appointment of an independent administrator to audit the entire Peak portfolio for illegal activity.  

“It is no secret that New York City is already battling an affordable housing crisis, and yet Peak and its operators still chose to line their own pockets at New Yorkers’ expense,” said Attorney General James. “As these bad actors illegally raked in profits, affordable housing in New York grew even more scarce, and that is unacceptable. Let this lawsuit be a warning: when corporate developers and bad landlords try to cheat housing laws, my office will always take aggressive action to stop them.”

“HCR's Tenant Protection Unit, in partnership with the Office of the Attorney General, conducted an extensive investigation resulting in a lawsuit against Peak Capital Advisors for improperly deregulating dozens of buildings in New York City,” said New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas. “The investigation showed that none of these Peak properties met legal requirements for deregulation. We look forward to returning these buildings to their proper status under the rent stabilization law. HCR’s Tenant Protection Unit and the Office of the Attorney General will not allow unlawful profiteering and deregulation.”

A joint investigation by the Office of the Attorney General (OAG) and HCR’s Tenant Protection Unit (TPU) found that Peak orchestrated a deceptive scheme to bypass New York City’s rent stabilization laws in order to rent apartments at inflated rents and make more money. Since 2019, Peak has acquired and developed dozens of buildings in New York City, many of which were rent stabilized. Peak falsely claimed that apartments qualified for deregulation under the “substantial rehabilitation” exemption, which only applies if a building is in substandard condition or seriously deteriorated before renovation, and if it has undergone a full system replacement. The OAG and HCR’s investigation determined that none of Peak’s properties met these strict legal requirements because they were not substandard or seriously deteriorated before they were renovated.

The OAG and HCR uncovered that Peak’s business plan from the outset was to market the apartments to young professionals willing to pay high rents without regard for rent stabilization laws. Peak specifically looked for buildings with “significant upside potential” in gentrifying neighborhoods such as Sunnyside, Astoria, Long Island City, and Greenpoint. By exploiting an exemption intended to incentivize the rehabilitation of seriously deteriorated buildings, Peak ignored the law and renovated solely to increase its profits. Records clearly show that Peak’s buildings did not require extensive renovations to be habitable, as they were in average or good condition when Peak bought them. Therefore, Peak did not meet the legal requirement for deregulation.

The OAG investigation also uncovered several deceptive tactics Peak used to cover up its illegal scheme. After completing renovations, the company reassigned apartment numbers to make it difficult for tenants and regulators to track lawful rents. Peak also provided misleading rent roll projections to investors and lenders, promising inflated rents that could not legally be charged under rent stabilization. When subpoenaed by HCR for records substantiating deregulation, Peak hired a consultant to draft 31 fraudulent affidavits for Peak’s architect to sign, which falsely claimed all building systems were substandard. Peak also deceived new tenants about their apartments’ rent-stabilized status and made them sign leases agreeing that the apartments were deregulated. 

The 31 buildings involved in the investigation are:

• Queens
  • 48-36 41st Street
  • 48-33 47th Street
  • 47-21 47th Street
  • 5-13 51st Avenue
  • 45-35 41st Street
  • 5-35 47th Road
  • 47-34 45th Street
  • 47-25 44th Street
  • 53-17 Skillman Avenue
  • 35-34 32nd Street
  • 30-70 44th Street
  • 47-45 43rd Street
  • 47-07 47th Avenue
  • 47-09 47th Avenue
  • 30-93 44th Street
  • 41-27 49th Street
  • 45-42 Vernon Boulevard
  • 32-30 41st Street
  • 45-44 40th Street
  • 25-59 35th Street
• Brooklyn
  • 70 Middagh Street
  • 131 Greenpoint Avenue
  • 586 Manhattan Avenue
  • 94 Milton Street
  • 311 Eckford Street
  • 250 North 6th Street
  • 515 Graham Avenue
  • 251 North 8th Street
  • 154 Atlantic Avenue
  • 724 Metropolitan Avenue
  • 101 Greenpoint Avenue

In the lawsuit filed today, Attorney General James and HCR are asking the court to mandate that Peak reregulate all illegally deregulated units, pay treble overcharge penalties to all tenants who were overcharged for illegally inflated rents, return all ill-gotten profits, and pay penalties for violating consumer protection laws. 

The OAG would like to thank the members of the Tenant Harassment Prevention Task Force, including HCR’s TPU, the New York City Department of Buildings, New York City Housing Preservation and Development, and the New York City Law Department, for their ongoing partnership and collaboration in fighting for New York tenants.

This matter is being handled by Senior Enforcement Counsel Rachel Hannaford and Special Assistant Attorney General Stephanie Cunningham under the supervision of Housing Protection Unit Chief Brent Meltzer, with assistance from Legal Assistant Cecily Mills. The Housing Protection Unit is part of the Division for Social Justice, which is led by Chief Deputy Attorney General Meghan Faux and overseen by First Deputy Attorney General Jennifer Levy.