Objective

To determine whether Homes and Community Renewal’s Office of Rent Administration is appropriately accounting for and collecting fines (civil penalties) for non-compliance and harassment cases. Our audit focused on complaints that were filed or had outstanding fines between January 1, 2016 and September 30, 2018.

About the Program

Homes and Community Renewal consists of New York State’s major housing and community renewal agencies, including the Division of Housing and Community Renewal (DHCR). DHCR is responsible for the supervision, maintenance, and development of affordable lowand moderate-income housing in the State. Within DHCR, the Office of Rent Administration (ORA) administers the State’s rent laws and regulations related to nearly 1 million regulated apartments in the State. Between January 1, 2016 and September 30, 2018, 22,761 complaints from rent-regulated tenants were filed by ORA.

Our audit focused on harassment and non-compliance complaints, which are handled by ORA’s Enforcement Unit. There were 684 harassment and 895 non-compliance cases filed during our audit scope. Non-compliance and harassment cases that cannot be resolved by settlement, mediation, or conference are heard before an Administrative Law Judge. If owners are found to be in violation, they could face fines of at least $1,000 for each first non-compliance offense and at least $2,000 for each first harassment offense. For non-compliance complaints, owners are given an opportunity to avoid a hearing and pay settlements of $100 or $250, provided the conditions are corrected within 60 days. Between January 1, 2016 and September 30, 2018, ORA collected $673,215 in fines and settlements.

Key Findings

• ORA lacks proper fiscal controls over fines and settlements. We have limited assurance that all monies due the State are received and accounted for because of system, process, and policy weaknesses.
• ORA does not exercise its full authority to collect outstanding fines more timely. As of April 2019, there were at least $346,000 in outstanding fines.
• Harassment fines were imposed in only 12 out of the 684 harassment cases (2 percent) filed during our scope.
• State harassment laws and regulations are different for rent-controlled units inside and outside of New York City. As a result, tenants living outside New York City face greater challenges in resolving harassment complaints.

Key Recommendations

• Develop policies and create a system that accurately tracks fines and settlements.
• Exercise full authority to collect outstanding fines.
• Consider whether the current settlement amounts are sufficient, particularly for owners who repeatedly fail to provide essential services.
• Enhance protections for rent-controlled tenants outside New York City.