New York Attorney General Letitia James and New York State Homes and Community Renewal (HCR) Commissioner RuthAnne Visnauskas have filed a lawsuit against Zara Realty Holding Corp., its principals, and affiliated entities. The lawsuit alleges that Zara Realty repeatedly violated rent stabilization laws by overcharging tenants in Jamaica and Elmhurst, Queens, especially those paying rent through the New York City Department of Social Services (DSS) housing subsidy programs. According to the complaint, Zara Realty disregarded rent reduction orders issued by HCR’s Office of Rent Administration and initiated eviction proceedings against tenants who did not pay the unlawfully increased rents.
Attorney General James stated, “While hardworking families are battling an affordable housing crisis and fighting to make ends meet, Zara Realty shamelessly took advantage of vulnerable tenants. New Yorkers should not have to worry that their landlords are willfully deceiving them just to line their own pockets. Let this be a warning: any landlord who tries to cheat their tenants and evade our rent stabilization laws will be hearing from my office.”
HCR Commissioner Visnauskas added, “Our Tenant Protection Unit is fighting for New Yorkers every day by protecting them from predatory landlords who try to illegally overcharge their tenants and defy our State’s rent laws. The message from our office and Attorney General James is clear – if landlords fail to abide by the rent laws, if landlords seek fraudulent rent increases, or initiate unlawful evictions – we will not hesitate to take action on behalf of millions of rent-regulated tenants in New York.”
The lawsuit claims that since at least 2022, Zara Realty charged DSS subsidy recipients the maximum amount allowed under their program without regard for legal limits set by the Rent Guidelines Board. In addition to ignoring legal caps on rent increases, Zara Realty allegedly failed to comply with ORA orders requiring reduced rents when essential services were not provided or property standards were not met.
Specific examples cited include a DSS voucher-holder whose rent was raised by eight percent in one year—above the legal limit of 3.25 percent—and then again by 44 percent the following year. When she refused to pay, she was taken to court. Another tenant continued being charged after a court-ordered freeze on his rent; when he stopped paying illegal charges, eviction proceedings began.
The OAG and TPU are seeking a court order barring Zara Realty from charging or collecting inflated rents, requiring identification and compensation for all current and former overcharged tenants, correction of official records with HCR, issuance of new leases reflecting lawful amounts, as well as payment of damages.
Attorney General James and HCR previously sued Zara Realty in March 2019 for alleged targeting of immigrant middle- and low-income tenants across at least 38 buildings through excessive fees and improper lease practices; litigation is ongoing.
DSS Commissioner Molly Wasow Park commented on recent changes intended to prevent similar abuses: “We applaud Attorney General James and HCR Commissioner Visnauskas for holding these bad actors accountable… DSS has taken concrete steps to change rental subsidy processes to prevent bad actors from being able to overcharge tenants in receipt of city-administered rental subsidies in the future. We look forward to further collaboration with the Office of the Attorney General and HCR to ensure vital government resources are protected.”
Maansi Shah from Chhaya Community Development Corporation said: “For years, Zara Realty has lined their pockets by exploiting and harassing low-income and immigrant tenants, blatantly disregarding rent laws. This lawsuit is a major victory for tenants to recover stolen rent and a critical first step in holding this predatory landlord accountable. But the fight for justice is far from over—we need stronger oversight, increased penalties, and closed loopholes to prevent landlords from weaponizing the system against vulnerable tenants.”
Carlos Ortiz at Catholic Migration Services added: “For years, our clients living in Zara-managed buildings have worked hard to ensure Zara provides all essential services for every tenant. Zara must be held responsible for ongoing violations and the hardship they have caused so many families,” he said. “We thank the Attorney General’s Office for taking this legal action… This lawsuit and the stories it highlights should remind HCR and our elected officials that we urgently need stronger laws and real accountability.”
This action continues Attorney General James’ efforts regarding tenant protection enforcement throughout New York State. Recent measures include re-regulating apartments previously deregulated illegally—such as returning more than $50,000 to overcharged tenants earlier this year—and securing multi-million-dollar settlements related to unlawful practices in housing management.
At HCR’s Tenant Protection Unit (TPU), staff conduct investigations using updated forensic audit algorithms designed in 2023 which help target non-compliance patterns among landlords; recent outcomes include settlements exceeding $400,000 with other property owners found violating regulations.
The OAG case team includes members from its Housing Protection Unit within its Division for Social Justice.
