New state order could spare 1 million rent-stabilized tenants from water fees

New York state’s housing agency has ordered one of the city’s largest landlords to stop charging renters for water, in a decision that could have sweeping implications for owners and tenants in roughly 1 million rent-stabilized apartments across the five boroughs.

Woody Pascal, a deputy commissioner at the Office of Rent Administration, ruled that the owner of the sprawling LeFrak City housing complex in Corona, Queens, broke state law by charging water usage fees after a tenant filed a complaint about the added cost.

"This reiterates what should be a bedrock principle: Landlords can’t charge tenants for water,” Lucas Ferrara, a tenant attorney who reviewed the case, said.

Pascal rejected an appeal of the decision by the LeFrak Organization, which owns the 4,605-unit complex, and upheld a prior order to refund the tenant for at least two months of charges. LeFrak has been imposing water fees on new tenants since at least 2019, according to records reviewed by Gothamist.

“This opens up a big question on whether there is a massive overcharge happening and whether tenants could challenge it,” said Andrea Shapiro, program director at the Met Council on Housing, a tenants rights organization that has been working with the LeFrak City tenant association for three years.

If applied more broadly, lawyers and tenant advocates said the ruling could put landlords who are charging tenants for water across the city in legal jeopardy.

“This would apply to anyone who is in a rent-stabilized apartment,” Shapiro said.

She said it was unclear how many LeFrak tenants were being charged for water, but it’s an uncommon arrangement for rent-stabilized housing in New York City. Pascal issued the ruling in January. It has not been previously reported.

LeFrak Organization spokesperson Owen Stone said the company is suing the Division of Housing and Community Renewal in state court to appeal the ruling.

“We believe this recent decision contradicts previously published orders,” Stone said.

The company says the tenant, Roxanne Richards, signed a “water usage rider” on her lease that allows it to monitor her water usage and levy charges, according to a case summary included in the recent state order. But the state ruled that the document was void and that LeFrak had not sought permission to install submeters.

“Charges for water, a required service, cannot be passed on to the tenant.” Pascal wrote in his order.

A spokesperson for the state’s Division of Housing and Community Renewal, which oversees Pascal’s office, declined to comment on the ruling, citing the ongoing litigation. Richards did not respond to requests for comment.

Gothamist first reported on water usage fees at LeFrak in August 2024 after reviewing court filings for hundreds of tenants facing eviction from the complex.

LeFrak had the highest number of evictions in the city at the time, with tenants in at least 121 apartments losing their homes since the start of 2023, Gothamist reported. Rent ledgers submitted to the court showed that at least 35 of the evicted tenants were being charged for water, with fees exceeding $250 a month in some cases.

In response to questions from Gothamist last year, the Division of Housing and Community Renewal pointed to state law prohibiting landlords from charging tenants for water and other “essential services.”

The LeFrak Organization countered that its water charges were justified by a 2011 ruling from the Office of Rent Administration, which allowed the owner of an Astoria apartment building to bill tenants for water.

Pascal’s order indicated that the 2011 ruling may be “inconsistent” with the current law.

Ferrara, the tenant attorney, said the latest order reinforces existing regulations that prohibit water charges, which he said were “yet another way in which landlords attempt to penny pinch and circumvent the law.”