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Major NYC landlord group targeted in tenants' lawsuit

A recent media report notes that A&E Real Estate Holdings, reportedly the fifth-largest owner of apartment rental units in New York City, has been "touted as an important success story" by city administrators for the central role it plays in building and preserving affordable dwellings for metro residents.

That story is now being questioned, at least in one important respect, in details that have emerged in what the report terms a "legal bombshell" directed at A&E's alleged unlawful conduct in violation of city rent-regulation laws.

Rather than being awash in accolades, A&E principals are now confronting adverse press in the wake of a recent lawsuit filed in Manhattan State Supreme Court by nearly 70 current and ex-tenants. The complaint contends that A&E has purposefully misstated over time the amount of money it has spent on dwelling improvements.

Its alleged motive: to allow the company to materially jack up tenants' rents in many instances following its false assertions that a requisite amount of money was spent on updates to qualify A&E to remove apartments from their classification as rent-stabilized units.

Unsurprisingly, A&E executives deny any wrongdoing, with a company spokesperson stating that the large-scale property manager "complies fully with all laws governing rent regulated housing." A&E says that initial scrutiny of the tenants' claims reveals that well more than 90 percent of them relate to the acts of previous property owners.

The 68 tenants who are named plaintiffs in the litigation seek class action status for their complaint.