Landlord Faces Lawsuit for Harassment
By CHARLES V. BAGLI NY TIMES
State Attorney General Andrew M. Cuomo announced Thursday that he intends to sue a major New York landlord that he says harassed hundreds of tenants in rent-regulated apartments in Queens and Manhattan in a systematic effort to force their departure to create vacancies for higher-paying tenants.
The landlord, Vantage Properties, routinely filed eviction notices and other legal actions against working-class and immigrant families in tenements that the company had recently acquired to generate “substantial tenant turnover,” investigators and tenant advocates said. But most of the legal notices, the attorney general said in a letter to Vantage, contained “deceptive and misleading representations.” Investigators said the majority of those notices were eventually rejected by the city’s housing courts, although the company denied that.
The attorney general notified Neil Rubler, president of Vantage Properties, that his office would file a lawsuit in five days unless the company stopped the harassment, paid damages to tenants and agreed to a monitor to oversee its future rental activity.
“Landlords who illegally harass tenants to boost their bottom line do great harm to the fabric of the city,” Mr. Cuomo said. “Their underhanded tactics displace longtime residents from their homes and exacerbate the acute affordable-housing shortage.”
Vantage issued a statement Thursday evening saying it looked forward to demonstrating to Mr. Cuomo its commitment “to serving its residents and to the future of affordable housing in New York City.”
But its financial partner, Apollo Real Estate Advisors, also issued a statement expressing regret that Vantage had not yet reached an agreement with the attorney general “incorporating best practices and other tenant protections, which we fully support.”
“We expect that Vantage will work with Attorney General Cuomo’s office to get this matter resolved quickly,” Apollo said.
Marina Materon, 63, a cleaning woman who has lived in the same four-story building in Sunnyside, Queens, for 26 years, said Vantage had been harassing her since it bought the building in January 2008. She said she had to go to court to resolve a false claim that she owed back rent, but still regularly receives notices demanding back rent.
“It’s harassment,” she said during an interview at her home, “because I’m paying my rent and every month they’re sending me this thing that says I have to pay this amount. I don’t know what I would do if I had to move.”
Ms. Materon, who pays $754.70 per month for her two-bedroom apartment, said her building is deteriorating. There are rats and cockroaches; the front door is broken and sometimes stays open at night.
A relative newcomer, Vantage spent more than $2 billion at the height of the market in 2006 and 2007, buying about 125 buildings with more than 9,500 apartments in Queens, Washington Heights and Harlem. Most often, it did so in partnership with Apollo.
Vantage, like the Pinnacle Group, the Praedium Group and other private equity firms, paid top dollar for rent-regulated buildings in working-class neighborhoods and wrapped them in inordinately large mortgages. Although rental income did not cover their mortgage payments, their business plan was to profit by forcing out tenants in rent-regulated apartments, renovating the units and sharply increasing rents.
Indeed, after Vantage and Apollo bought eight buildings in Washington Heights, rental income covered only 40 percent of the annual loan payments. Only one of the 455 apartments was not regulated. But Vantage expected quick turnover.
“The borrower anticipates to recapture approximately 20 to 30 percent of the units by year end 2008, and 10 percent per year thereafter,” according to a 2007 corporate filing.
But the average annual turnover in a rental building in New York is closer to 5 percent. The attorney general and tenant advocates said the only way that Vantage could achieve those numbers was by harassing tenants with fake eviction notices and other tactics.
“The Wall Street type of competition and profit seeking of private equity financing is causing an epidemic of tenant harassment,” said Benjamin Dulchin, executive director of the Association of Neighborhood Housing. “Vantage and their financiers are jeopardizing economic diversity and long-term stability of our neighborhoods.”
Vantage claimed that it was only trying to weed out those tenants who did not qualify for rent regulation. But investigators point out that 86.2 percent of the termination notices filed by Vantage at one complex, Savoy Park in Harlem, were resolved in favor of the tenants.
Marcos Oliveira said he never had a landlord problem before Vantage bought his building in Jackson Heights, Queens. Vantage sent him a letter saying that he and his family had to leave because the apartment was not his primary residence. He said he gathered up years of bills from Con Ed and other vendors to prove that he was a longtime resident. But Vantage, he said, refused to cash his rent checks.
“I couldn’t believe it,” Mr. Oliveira said. “How come I’ve been here so long with no problem? Everyone in the building knows me. What do I have to do to get them to leave my family alone?”
Ann Farmer contributed reporting.
By CHARLES V. BAGLI NY TIMES
State Attorney General Andrew M. Cuomo announced Thursday that he intends to sue a major New York landlord that he says harassed hundreds of tenants in rent-regulated apartments in Queens and Manhattan in a systematic effort to force their departure to create vacancies for higher-paying tenants.
The landlord, Vantage Properties, routinely filed eviction notices and other legal actions against working-class and immigrant families in tenements that the company had recently acquired to generate “substantial tenant turnover,” investigators and tenant advocates said. But most of the legal notices, the attorney general said in a letter to Vantage, contained “deceptive and misleading representations.” Investigators said the majority of those notices were eventually rejected by the city’s housing courts, although the company denied that.
The attorney general notified Neil Rubler, president of Vantage Properties, that his office would file a lawsuit in five days unless the company stopped the harassment, paid damages to tenants and agreed to a monitor to oversee its future rental activity.
“Landlords who illegally harass tenants to boost their bottom line do great harm to the fabric of the city,” Mr. Cuomo said. “Their underhanded tactics displace longtime residents from their homes and exacerbate the acute affordable-housing shortage.”
Vantage issued a statement Thursday evening saying it looked forward to demonstrating to Mr. Cuomo its commitment “to serving its residents and to the future of affordable housing in New York City.”
But its financial partner, Apollo Real Estate Advisors, also issued a statement expressing regret that Vantage had not yet reached an agreement with the attorney general “incorporating best practices and other tenant protections, which we fully support.”
“We expect that Vantage will work with Attorney General Cuomo’s office to get this matter resolved quickly,” Apollo said.
Marina Materon, 63, a cleaning woman who has lived in the same four-story building in Sunnyside, Queens, for 26 years, said Vantage had been harassing her since it bought the building in January 2008. She said she had to go to court to resolve a false claim that she owed back rent, but still regularly receives notices demanding back rent.
“It’s harassment,” she said during an interview at her home, “because I’m paying my rent and every month they’re sending me this thing that says I have to pay this amount. I don’t know what I would do if I had to move.”
Ms. Materon, who pays $754.70 per month for her two-bedroom apartment, said her building is deteriorating. There are rats and cockroaches; the front door is broken and sometimes stays open at night.
A relative newcomer, Vantage spent more than $2 billion at the height of the market in 2006 and 2007, buying about 125 buildings with more than 9,500 apartments in Queens, Washington Heights and Harlem. Most often, it did so in partnership with Apollo.
Vantage, like the Pinnacle Group, the Praedium Group and other private equity firms, paid top dollar for rent-regulated buildings in working-class neighborhoods and wrapped them in inordinately large mortgages. Although rental income did not cover their mortgage payments, their business plan was to profit by forcing out tenants in rent-regulated apartments, renovating the units and sharply increasing rents.
Indeed, after Vantage and Apollo bought eight buildings in Washington Heights, rental income covered only 40 percent of the annual loan payments. Only one of the 455 apartments was not regulated. But Vantage expected quick turnover.
“The borrower anticipates to recapture approximately 20 to 30 percent of the units by year end 2008, and 10 percent per year thereafter,” according to a 2007 corporate filing.
But the average annual turnover in a rental building in New York is closer to 5 percent. The attorney general and tenant advocates said the only way that Vantage could achieve those numbers was by harassing tenants with fake eviction notices and other tactics.
“The Wall Street type of competition and profit seeking of private equity financing is causing an epidemic of tenant harassment,” said Benjamin Dulchin, executive director of the Association of Neighborhood Housing. “Vantage and their financiers are jeopardizing economic diversity and long-term stability of our neighborhoods.”
Vantage claimed that it was only trying to weed out those tenants who did not qualify for rent regulation. But investigators point out that 86.2 percent of the termination notices filed by Vantage at one complex, Savoy Park in Harlem, were resolved in favor of the tenants.
Marcos Oliveira said he never had a landlord problem before Vantage bought his building in Jackson Heights, Queens. Vantage sent him a letter saying that he and his family had to leave because the apartment was not his primary residence. He said he gathered up years of bills from Con Ed and other vendors to prove that he was a longtime resident. But Vantage, he said, refused to cash his rent checks.
“I couldn’t believe it,” Mr. Oliveira said. “How come I’ve been here so long with no problem? Everyone in the building knows me. What do I have to do to get them to leave my family alone?”
Ann Farmer contributed reporting.