Landlords use PIs to root out illegal tenants

August 31, 2010 11:00 p.m.

(New York Times) — The trend of New York landlords hiring private detectives to root out people who are using rent-controlled or rent-stabilized apartments illegally has picked up in the past year. This trend coincides with the increasing trend of New Yorkers moving out of their apartments and subletting to other renters for more than they are paying.

As a parade of slovenly dressed 20-somethings passed through the entrance of a downtown Manhattan apartment building on a weekday afternoon, these seemingly savvy New Yorkers did not seem to notice they were the subjects of a photo shoot.

Nicole Bengiveno/The New York Times

Mr. Mullen at the Spy Store, a retail outlet for security and spying equipment.

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That is because this shoot was covertly orchestrated by their landlord, who had hired a private investigator to root out illegal tenants.

Masked by lunchtime crowds and afternoon rain, the private eye, Joseph Mullen, who has run a sleuthing firm for more than 40 years, parked his car in front of the building, flipped through papers showing that several residents of the seven-story building were “dead or living somewhere else,” and waited.

Shane Williams, a vice president of the firm, J.T. Mullen Inc., slouched strategically in his seat and photographed people as they entered and left. The affable pair looked like observers at an antifashion show as food deliverymen paraded through, an older portly renter stepped out to buy cheese biscuits and renters dressed in gym clothing shuffled outside to smoke.

“We don’t know half the people who live in this building,” Mr. Mullen said. He released a gravelly chuckle, rustled through papers and glanced through the tinted window. “The landlords say, ‘I got to get these illegal tenants out and make some money.’ ”

In a high-rent borough like Manhattan with plenty of rent-regulated apartments ripe for exploitation, real estate investigation has long been a big business. Private detectives say it has picked up in the past year as some New Yorkers have tried to find extra money by moving out of their apartments and subletting to other renters for more than they are paying, which is not allowed.

And, of course, there are landlords pressed for cash, trying to root out people who are using rent-controlled or rent-stabilized apartments illegally. This would allow the landlords to find new tenants and raise the rent by 20 percent or more under state housing law. During the speculation boom of the last decade, some large landlords were accused of using private investigators to harass legal tenants out of their apartments in order to raise rents to cover large mortgages and increase their profits.

Landlords who root out illegal sublets and absentee renters — a rent-regulated tenant must occupy the unit for at least 183 days a year — crow about how profitable these investigations can be.

Craig Charie, a lawyer and landlord who has hired private investigators for such cases since 1994, described a tenant at one Chelsea building who held onto her $433-a-month apartment while living primarily in New Jersey. An investigator tracked her commuting patterns, and Mr. Charie kicked her out, combined the apartment with another to make a duplex and raised the rent.

“It’s exceptionally useful,” Mr. Charie said. “We pieced together a lifestyle and recaptured the unit.”

As Mr. Mullen and Mr. Williams watched for residents and rain pattered on the car, they explained how these real estate cases, which make up a small fraction of their business, reach them. New Yorkers settle into rent-regulated apartments in their 20s. But as their incomes and families grow and they move out, they try to hold onto these apartments by renting them out to family and friends. When landlords bought buildings in recent years, often the only information they were given about their tenants was scribbled on rumpled papers and included names of residents who had not lived there in 30 years. Mr. Williams estimates that landlords do not know 20 percent of their tenants.

That is when they hire Mr. Mullen’s firm. He investigated a Baxter Street building where all of the residents had the same Social Security number. Mr. Williams chimed in about a building where the illegal tenant listed his apartment under the name O. B. Juan KNobi.

They allowed this reporter on a recent stakeout on the condition that the address not be published, because it was still under surveillance. They were hired to investigate 10 of the 25 apartments in the building; they usually earn $300 to $500 per apartment, or more if it involves extensive research. The most widely available public records may not always help. They said some tenants who lived elsewhere most of the year would vote in the city (itself a crime) to leave a paper trail or would receive their mail at their rent-controlled apartment and bribe the superintendent to forward it once a week.

This building had several advantages for the two men, including proximity to good coffeehouses, to keep them alert, and a superintendent who puts out the trash early enough to give them time to dig for Consolidated Edison or phone bills or other clues to who actually lives in an apartment. E-ZPass records and auto insurance bills are also useful. At some buildings, the superintendent can be talked into wedging a match into a locked apartment door to see how many days or weeks it takes to fall out.

When a smoker emerged from the building, they cheered; smokers linger and make it easy to photograph. Eventually, they will give all their photos to the landlord, who can show them to the superintendent to identify who is living where and whether a 25-year-old is living alone in a 95-year-old’s apartment.

If so, the eviction process can begin. It’s a messy business that has left Mr. Mullen with little envy for his clients.

“I wouldn’t want to be a landlord,” he said.

A version of this article appeared in print on August 31, 2010, on page A18 of the New York edition.