LI Landlord Illegally Witheld Security Deposits From 900 Tenants: AG

LONG ISLAND, NY —One of the largest residential property owners on Long Island illegally withheld security deposits from about 900 tenants and will now be forced to pay the proverbial piper, New York State Attorney General Letitia James said Friday.

James said she recovered more than $422,000 for the hundreds of tenants whose funds were illegally withheld by Fairfield Properties. According to James, the real estate company illegally withheld full or partial security deposits without providing tenants with a written itemized list of deductions, inspected apartments without the tenant present, and did not allow tenants to make repairs before vacating their apartment to avoid penalties.

Fairfield must return those security deposits, including interest, and pay $90,000 in penalties, James said.

“New Yorkers shouldn’t have to worry that their landlord will illegally withhold money that belongs to them,” James said.. “Fairfield withheld thousands of dollars that belonged to hardworking people, and today, we are returning that money to tenants who were shortchanged. We will always go after landlords that violate the law and the rights of New Yorkers.”

Fairfield owns and operates 196 rental buildings, through single purpose entities, or SPEs, formed solely to own each of the buildings, the complaint said. Fairfield owns 13,620 rental units in Nassau, Suffolk, and Queens counties, the AG said. Of that number, 123 buildings are located in Suffolk, 66 in Nassau, and 7 in Queens — making Fairfield the largest apartment owner in the region, the complaint said.

The Office of the Attorney General, or the OAG, received complaints from tenants about the withheld funds and after an investigation, OAG found that the real estate company had violated several housing and tenant protection laws.

First, New York State law requires landlords to provide an itemized list of any deductions on security deposits within 14 days or else a security deposit must be returned in full, James noted. Fairfield withheld full security deposits or returned partial deposits without providing tenants a written itemized list of deductions.

Also, New York law also requires landlords to give tenants written notice of their right to be present when the apartment is inspected and must allow tenants the opportunity to clean or fix anything that would be deducted from their security deposit. Fairfield regularly inspected apartments without the tenant present and did not give tenants the opportunity to make repairs or clean their apartment before vacating it, James added.

As a result of today’s agreement, Fairfield will return $422,598.21 back to 899 former tenants; Fairfield will contact former tenants and send them their checks. The company will also be required to provide reports to OAG about its compliance with the agreement.

James said the company has agreed to comply with laws regarding security deposits and must send certificates affirming their compliance every year or whenever requested by OAG for three years. They will also train current staff on correct security deposit procedures and will provide annual trainings in the future.

"When renters provide security deposits, they are doing so in good faith that the landlord will return the deposit at the end of the lease if all criteria is met by the tenant," said Suffolk County Legislature Minority Leader Jason Richberg. "A large company illegally holding back funds from residents who need it the most, including low-income families and seniors, is disappointing at best. This agreement is a message to other landlords and property owners that they will be held accountable — and that this practice will not be tolerated."

Added Ian Wilder, executive director of Long Island Housing Services: "As both a Fair Housing and HUD-certified housing counseling agency, we see that laws passed by the legislature to ensure that tenants are on equal footing with their landlords are often ignored. Tenants regularly find themselves without the resources to ensure that their rights are obeyed."