LI real estate company to pay over $670G in penalties, pay tenants for dangerous living conditions, AG says

A Great Neck-based real estate company must pay more than $670,000 in civil penalties in addition to paying hundreds of tenants for dangerous living conditions after an investigation by the attorney general’s office found more than 3,000 violations.

Attorney General Letitia James and the Tenant Harassment Prevention Task Force announced on Tuesday that Steven Kashanian and his company, BlueSky Management NY LLC, must pay $672,578 for violating New York City construction codes and creating unsafe and unsanitary conditions for tenants throughout its 72 buildings in Brooklyn, Queens, Manhattan and the Bronx.

In addition, BlueSky must give tenants $100 credit for each day there was no heat or hot water during the 2022-23, 2023-24 and 2024-25 heat seasons, correct open construction violations and hire monitors to oversee construction activity and compliance.

"No family should ever feel unsafe in their home," James said in a statement. "BlueSky consistently forced tenants to live in dangerous and unsanitary conditions, putting the safety of New Yorkers and their families at great risk. Today we are putting money back into tenants’ pockets and requiring BlueSky to make their buildings safer and cleaner for the New Yorkers who call them home."

The investigation found between 2018 and 2022, BlueSky purchased scores of distressed buildings in New York City and began illegal construction projects without proper permits, leaving tenants without access to water, heat and gas.

The task force members received numerous complaints from tenants in BlueSky's 1,150 units, including rent-stabilized apartments, about unsafe conditions, including lack of proper maintenance and repairs. The Great Neck company also failed to comply with the requirements of rent regulation and harassed residents, according to the task force.

The task force conducted an investigation into these complaints — performing site inspections, interviewing tenants and reviewing documents and agency records.

Violations include lead-based hazards, unsafe or exposed electrical wiring, leaky roofs, pest nuisances, missing or defective smoke and carbon monoxide detectors and construction without permits, the attorney general's statement said.

BlueSky's portfolio — which had not been registered for years — had more than 3,000 violations and 798 open violations as of May 20.

Kashanian and BlueSky could not be immediately reached for comment.

"The Task Force also found seven buildings with 20 open lead-based paint hazard violations that remained open for extended periods of time," James' statement said.

The company also consistently failed to file proper registrations for rent-stabilized tenants and often denied rent stabilization rights to their tenants, overcharged renters, or deregulated rent-stabilized housing accommodations.

"We have zero tolerance for those who target vulnerable tenants to exploit them for profit and attempt to unlawfully deregulate apartments," New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas said in a statement.

As part of the settlement, BlueSky must correct all construction code violations and provide affordable housing opportunities in any of the company’s buildings where tenants faced harassment, James said.

The company will also be subject to an independent construction monitor, who will review ongoing construction and BlueSky properties and make unannounced visits to inspect construction projects for three years.