New York Attorney General Letitia James and the Tenant Harassment Prevention Task Force on Dec. 9 announced a settlement with Steven Kashanian and his real estate firm, BlueSky Management NY, LLC, after investigators found widespread violations of city construction codes and unsafe, unsanitary conditions across the company’s properties.
BlueSky owns 72 buildings with roughly 1,150 apartments, including rent-stabilized units in Brooklyn, Queens, Manhattan and the Bronx. According to the investigation, tenants endured hazardous living conditions tied to illegal construction and repeated interruptions of essential services such as heat, hot water, gas and water.
“No family should ever feel unsafe in their home,” James said in a statement. “BlueSky consistently forced tenants to live in dangerous and unsanitary conditions, putting the safety of New Yorkers and their families at great risk. Today we are putting money back into tenants’ pockets and requiring BlueSky to make their buildings safer and cleaner for the New Yorkers who call them home.”
Under the settlement, Kashanian and BlueSky will pay a total of $672,578 in penalties and fines. The company must also refund tenants who were overcharged rent after Feb. 2023 and issue credits of $100 for each day tenants were without heat or hot water during the 2022–2023, 2023–2024 and 2024–2025 heat seasons. In addition, BlueSky is required to correct outstanding construction violations, resolve housing code violations and hire independent monitors to oversee construction activity and compliance.
The investigation found that after purchasing numerous distressed buildings between 2018 and 2022, BlueSky began construction projects without proper permits and failed to maintain safe conditions. Task Force members documented thousands of violations, including lead-based paint hazards, exposed electrical wiring, leaks, pest infestations, missing smoke and carbon monoxide detectors, plus unauthorized construction work. As of May 20, 2025, BlueSky properties had more than 3,000 violations, with 798 remaining open.
Investigators also determined that BlueSky routinely failed to file required rent registrations for rent-stabilized apartments. In many cases, registrations stopped immediately after BlueSky acquired a building, limiting state oversight and obscuring tenants’ rent-stabilized status. The Tenant Protection Unit found that much of the portfolio had gone unregistered for years, resulting in illegal rent overcharges and improper deregulation.
As part of the agreement, BlueSky must file all missing registrations, audit its rent-stabilized portfolio under state review, restore units that were wrongly deregulated, issue corrected rent-stabilized leases and refund all confirmed overcharges. The company must also correct all outstanding violations issued by city agencies and provide affordable housing opportunities in buildings where tenants experienced harassment.
The financial penalties include $272,578 tied to open violations, $300,000 to the city for Housing Maintenance Code violations, and $100,000 to the state for failures to register rent-stabilized units. For the next three years, BlueSky will be subject to an independent construction monitor authorized to conduct unannounced inspections.
