Renting apartments in New York is a business for landlords. This is generally how they make their living. As in any business there are always people who try to make an extra buck by cutting costs or attempting to take advantage of others. Landlords are not different. Many of them follow the rules and provide fine places for people to live, but there are others who are simply trying to make extra money even if it means that they are breaking rules and ultimately taking advantage of tenants. This leads to landlord/tenant disputes.
Some of the rules that landlords break are straight forward such as not providing the required utilities or trying to evict tenants illegally. However, sometimes the rules they break are less obvious. One of these tactics are known as illusory sublets.
This is a way that landlords can evade the rent stabilization laws in New York. How it works is that the landlord leases the apartment to a primary tenant who does not actually occupy the apartment as their primary residence. Then they have this illusory prime tenant sublet the apartment to another individual at an amount which is more than is allowed by the rent stabilization laws.
If a person learns that they are a victim of a scam such as this, they do have remedies available to them. One is that they can force the landlord to recognize that the person subleasing is the actual tenant and reduce their rent to the appropriate amount. The illusory prime tenant would also be required to compensate the person subleasing the total amount of overages paid. If the tenant can prove that the landlord received the extra money, the landlord would have to compensate the victim as well.
Unfortunately this type of scam happens more than it should in New York. However, they are not always the easiest type of case to prove. It is important to understand the law and what types of clues to look for if one suspects this is occurring. Experienced attorneys have handled these types of cases and may be a useful resource.
Source: nyshcr.org, "Fact Sheet - #7 Sublets, Assignments and Illusory Tenancies" accessed on September 20, 2017