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Brooklyn Leader Says City Program That Transfers Properties To Developers May Be Defrauding Homeowners

Brooklyn Borough President Eric Adams

A city program that allows debt-ridden multifamily properties to be transferred to developers could be rife with fraudulent activities, a prominent city politician says.

Brooklyn Borough President Eric Adams wants the New York Attorney General to look into the Department of Housing Preservation and Development’s Third Party Transfer program, the New York Daily News reports.

He said he is concerned that there appears to be a “concerted effort” to put the properties into developers’ hands.

The Third Party Transfer program allows a developer to pay $1 for a property and $8,750 per unit. It is only for buildings that are in debt and poor condition, and the chosen developer must agree to improve the building and keep the apartments affordable.

But Adams said he has received a number of complaints about the program.

“Through extensive discussions with community stakeholders, we have become aware that there appears to be deeper, and possibly illegal, actions undertaken to defraud homeowners of their property,” Adams and City Council member Robert Corngey wrote to the Attorney General’s office last week, according to the Daily News.

HPD, which has transferred 74 co-ops between 1997 and summer this year, according to the newspaper, said the program is an effective way to improve ailing properties. The building owners are given years to deal with taxes and disrepair of the buildings before a transfer is enforced.

“TPT is one of the strongest tools we have to improve living conditions for existing residents while also guaranteeing their rights to remain in their homes as rent stabilized tenants,” HPD spokesman Matthew Creegan said.

Mayor Bill de Blasio has set a target of creating 300,000 affordable housing units by 2026. The city is on pace to meet that goal, according to a New York Building Congress report released earlier this month, with nearly 35,000 new affordable units produced over the last four years.