NYC Comptroller Scott Stringer. Image credit: Office of the New York City Comptroller
Comptroller’s audit finds that HPD’s collection efforts did not result in the collection of the vast majority of the money judgments referred to its Judgment Enforcement Unit. On November 17, 2016, the Office of the City Comptroller Scott Stringer released a report of an audit of the Department of Housing Preservation and Development. The audit sought to evaluate HPD’s efforts in collecting outstanding money judgments resulting from assessed penalties.
HPD is charged with promoting the construction and preservation of affordable housing for low- and moderate-income families throughout the five boroughs. The Department is also responsible for the enforcement of the City Housing Maintenance Code and the State Multiple Dwelling Law. As part of that enforcement effort, HPD’s Code Enforcement Unit inspects residential multiple-dwellings and issues notice of violations. Building owners then must correct the violation within a specified amount of time or risk possible civil penalties. Penalties can range from $1,000 per an offense to $1,000 per day until the violation is corrected. When a building owner fails to pay a money judgment the case is transferred to HPD’s Judgment Enforcement Unit (JEU) for collection action.
In the final report, the Comptroller’s Office was unable to determine the overall rate of collection because HPD could not provide sufficient information regarding outstanding judgment balances and related payments by year. The report noted that the JEU had a limited number of legal staff assigned to pursue cases in court and that the “caseload was significantly backlogged with nearly half its total caseload remaining unassigned for an average of two years.”
According to numbers provided by HPD, in fiscal year 2014, 650 cases were transferred to the JEU totaling $20.3 million in assessed fines. That same year the JEU collected $2.3 million in fines either by remittance or settlement. In fiscal year 2015, 433 cases were transferred to the JEU totaling $14.8 million in assessed fines. That year the JEU collected $3.2 million.
The Comptroller’s Office selected a sample of 40 cases that had been initiated in fiscal years 2014 and 2015, and were subsequently transferred to the JEU as of January 20, 2016. Ten of those cases had yet to be assigned and were therefore not considered for the audit. The Comptroller’s Office found that the 30 cases totaled $1,355,085 in assessed penalties. Of that total, only $39,500 was collected, or 3 percent.
The Comptroller’s Office recommended that HPD take several steps in light of the audit. First, it called for HPD to work with the Mayor’s Office to cross check HPD’s list of judgment debtors with recipients of rental assistance, tax refunds, and other City payments. Second, HPD should work with the Law Department to identify the agency’s ability to levy such City payments to debtor landlords. Third, HPD should hire or reassign some staff attorneys to the JEU to reduce the backlog of unassigned cases. Fourth, HPD should consider transferring cases to the Law Department or an outside collection agency to expend collection efforts. HPD agreed with these recommendations.
In a press release, the Comptroller noted that hundreds of New Yorkers living in affordable housing are currently facing contemptable conditions like no heat or hot water, lead paint, and more. “We are not giving these families, our fellow New Yorkers, a fair shot,” the Comptroller said. “Even though we know these tenants—many who need us most—are often living in unfathomable conditions, we aren’t holding landlords accountable. It’s unfair and it’s unacceptable.”
To read the full audit report, click here.
Audit Report on the Department of Housing Preservation and Development’s Efforts to Collect Outstanding Money Judgments. MJ16-063A, NYC Comptroller Scott Stringer (Nov. 17, 2016).
By: Jonathon Sizemore (Jonathon is the CityLaw Fellow and a New York Law School Graduate, Class of 2016).
Go, Scott, We want those greedy landlords to fix their buildings for those families or get out of the business, in which case the city can sell their buildings (with tenants’ leases active) to non-profits or others who will manage them properly as low-income affordable housing for formerly homeless families, etc. We need that money to help with rent subsidies, not support greed. Please, do not allow any of these landlords to sell for profit to developers of luxury housing, taking these units off the low-income market that we need so badly. Let me know how I can help. Thank you.